After a serious car accident in New Jersey, many injured drivers assume that the at-fault driver’s insurance policy will fully cover their losses. Unfortunately, that is not always the case. When medical bills, lost income, and long-term treatment costs exceed the other driver’s policy limits, injured victims often discover that the available coverage falls far short of what they need.
That is where underinsured motorist coverage, often referred to as UIM, becomes critically important.
What Is Underinsured Motorist Coverage?
Underinsured motorist coverage is part of your own auto insurance policy. It applies when the at-fault driver has insurance, but not enough insurance to compensate you for your damages fully.
For example, the other driver’s policy might provide up to $25,000 for bodily injury, while your total damages are $150,000. Because their insurer will only pay up to the policy limit, the most you can recover will be $25,000, leaving you on the hook for $125,000.
Underinsured motorist coverage allows you to seek additional compensation through your own insurance policy, up to the liability limits you have selected for yourself. In other words, UIM coverage protects you from other drivers who are inadequately insured.
How UIM Works in New Jersey
New Jersey drivers can choose their own policy limits when purchasing auto insurance. Underinsured motorist coverage is optional, but strongly recommended.
Here is how a typical UIM claim works:
- The at-fault driver’s insurance pays its policy limit.
- You then make a claim under your own UIM coverage.
- Your insurer evaluates the total value of your damages.
- Your insurer pays the difference between the at-fault driver’s policy limit and your UIM limit, up to your maximum coverage amount.
It’s important to understand that UIM coverage does not automatically “add on” to the other driver’s policy. It only fills the gap between the at-fault driver’s payment and your own personal liability limit.
For example, let’s say your policy provides $100,000 coverage for bodily injury liability, and the other driver carries the $35,000 (the minimum liability coverage available as of 2026). Your UIM coverage limit is $100,000 so the maximum amount available you can recover against your policy is $65,000 (the difference of $100,000 – $35,000 = $65,000).
Why Underinsured Motorist Coverage Matters
Medical expenses following a serious car accident can escalate quickly. Hospital stays, surgery, rehabilitation, lost wages, and future care needs can easily exceed minimum policy limits.
New Jersey requires drivers to carry liability insurance, but many drivers choose the legal minimum. If you are seriously injured, and the other driver is underinsured, the UIM coverage available may not even come close to covering your losses, and you may be left personally responsible for medical bills that far exceed what the at-fault driver’s insurer pays.
Continuing the example above, remember the maximum you can recover against your UIM policy was $35,000; that’s in addition to the coverage available for personal injury to you and your passengers (PIP coverage). Assuming your policy provides $100,000 of PIP coverage, if you have $200,000 of medical expenses, the most you can recover against your policy in total will be $135,000 ($100,000 PIP + $35,000 UIM)—leaving you on the hook for $65,000.
Common Disputes in UIM Claims
Many people assume that filing a claim with their own insurer will be straightforward. In reality, underinsured motorist claims can be contentious.
Your insurance company may:
- Despite the severity of your injuries.
- Challenge the necessity of medical treatment.
- Argue that all or some of your injuries result from preexisting conditions.
- Disagree about the value of your pain and suffering.
- Offer a settlement significantly below your policy limits.
Even though you are making a claim under your own policy, your insurer’s financial interests remain at stake. That means the claim will be evaluated with the same level of scrutiny and resistance you would expect from the at-fault driver’s carrier.
Reviewing Your Coverage Before a Crash Occurs
One of the most important steps drivers can take is to review their insurance policy before an accident happens. Many policyholders don’t realize just how low their underinsured motorist limits are until they are already facing serious injuries.
Choosing a higher UIM limit can provide significant financial protection. The cost difference is often modest compared to the potential benefits after a catastrophic crash.
Protecting Your Rights After a Serious Accident
If you have been seriously injured in a New Jersey car accident and the at-fault driver’s coverage is insufficient, underinsured motorist coverage may play a central role in your recovery.
The Law Offices of G. Martin Meyers represents injured drivers throughout New Jersey in complex insurance disputes. We evaluate available coverage, calculate the full extent of damages, and advocate for fair compensation.
If you have questions about an underinsured motorist claim, call (973) 625-0838 or contact us online to schedule a free consultation. Our team can review your policy and help you understand your legal options.
