Uninsured and Underinsured Motorist Coverage in Michigan: What UM/UIM Actually Pays
UM/UIM Coverage Michigan: What Uninsured Motorist Pays
Car Accident | Michigan No-Fault Insurance | The Michigan Legal Center | Law Offices of Christopher Trainor & Associates
| QUICK ANSWER: What does UM/UIM coverage pay in Michigan? |
|---|
| UM (uninsured motorist) coverage pays for your pain and suffering and excess economic damages when the at-fault driver has no liability insurance. UIM (underinsured motorist) coverage pays when the at-fault driver's insurance limits are not enough to cover what your case is actually worth. Both cover the residual tort claim that Michigan's No-Fault PIP benefits do not — specifically, compensation for pain, suffering, and the effect of your injuries on your daily life. To collect, your injuries must generally meet the serious impairment of body function threshold under MCL 500.3135. UM/UIM coverage is not required in Michigan; it must be offered by your insurer, but you can reject it. If you rejected it or are unsure whether you have it, check your declarations page today. |
Michigan has one of the highest rates of uninsured drivers in the country. Depending on the year and the data source, between 20 and 25 percent of Michigan drivers carry no liability insurance at all. In some urban corridors, that number is higher.
That means roughly one in four drivers on a Michigan road cannot pay for the harm they cause.
Michigan's No-Fault system was designed, in part, to solve this problem. Your own insurer pays your medical bills and lost wages through Personal Injury Protection (PIP) benefits regardless of who caused the crash. No-Fault's first-party structure insulates you from the most immediate consequences of the other driver's uninsured status. But it does not insulate you from all of them.
What No-Fault does not cover is your third-party claim: the pain, the suffering, the permanent limitations, the effect of your injuries on your ability to work, parent, sleep, and function. Those damages belong to the at-fault driver, not to your own insurer. When the at-fault driver has no insurance or not enough insurance to cover what the case is actually worth, that is where UM and UIM coverage comes in.
This post explains exactly what UM and UIM coverage pay in Michigan, when each applies, how to make a claim through your own insurer, and what to watch for when the company you are paying premiums to becomes the company on the other side of your claim.
What Michigan No-Fault Covers — and the Gap It Leaves
Key Takeaway: PIP covers your out-of-pocket losses. It does not compensate you for pain and suffering or the long-term impact of your injuries. That is the gap UM/UIM fills.
Under MCL 500.3101 et seq., Michigan's No-Fault law requires every auto policy to include PIP benefits. When you are hurt in a crash, PIP pays:
- Medical expenses: all reasonably necessary treatment related to your injuries, under MCL 500.3107(1)(a)
- Work loss: up to three years of wage replacement at 85 percent of your gross income, under MCL 500.3107(1)(b)
- Replacement services: up to $20 per day for household tasks you cannot perform due to your injuries, under MCL 500.3107(1)(c)
- Attendant care: compensation for someone who assists you with daily living activities
PIP pays regardless of fault. It does not matter whether you caused the crash. Your insurer covers those expenses from your own policy.
What PIP does not cover is your claim against the at-fault driver for pain and suffering, permanent impairment, and the full human cost of what the crash did to your life. To pursue that claim — the third-party tort claim — you need to show that your injuries meet the serious impairment threshold under MCL 500.3135. If they do, you have a claim against the driver who hit you.
Now picture that driver has no insurance. Or their policy has a $20,000 limit and your damages are $150,000. Your PIP claim is intact. But the third-party tort claim that should be paid by the at-fault driver has nowhere to go.
That is the gap. UM/UIM coverage is designed to bridge it.
UM Coverage: When the At-Fault Driver Has No Insurance
Key Takeaway: UM coverage steps into the shoes of an uninsured at-fault driver and pays what their liability policy would have paid, up to your UM limits.
Uninsured motorist coverage activates when the driver who caused your crash has no liability insurance in force at the time of the collision. Under MCL 500.3009(1), Michigan insurers are required to offer UM coverage with every auto policy, but Michigan drivers may reject it in writing. If you accepted it, it appears on your declarations page with a per-person and per-occurrence limit.
What triggers UM coverage in Michigan
The most common trigger is straightforward: the at-fault driver has no policy. But UM coverage can also apply in these situations:
- Hit-and-run accidents where the responsible driver fled the scene. Most Michigan UM policies require physical contact between vehicles for a hit-and-run claim. A phantom vehicle that caused you to swerve without contact may not trigger UM coverage; check your policy language carefully.
- The at-fault driver's insurer denies coverage. If the other driver had a policy but their insurer successfully disclaims coverage, the driver may be treated as uninsured for UM purposes.
- The at-fault driver's policy was lapsed or cancelled at the time of the crash.
How a UM claim works
You file the UM claim with your own insurer. Your insurer steps into the position of the at-fault driver and evaluates the claim as that driver's liability carrier would. This means your own insurer has a financial incentive to minimize what it pays — the same incentive the at-fault driver's insurer would have.
Many Michigan UM policies include a mandatory arbitration clause. If your UM claim cannot be resolved through negotiation, you may be required to submit it to an arbitrator rather than take it to court. The arbitration process, timeline, and any limits on the arbitrator's authority are governed by your policy. Read it before you file.
Your insurer is not your ally in a UM claim. They are a counterparty to a contract. Understanding that distinction before you file changes how you approach every conversation with them.
UIM Coverage: When the At-Fault Driver's Insurance Is Not Enough
Key Takeaway: UIM coverage pays the difference between the at-fault driver's liability limits and your actual damages, up to your UIM policy limits.
Underinsured motorist coverage applies when the at-fault driver has insurance, but their limits are not sufficient to cover the full value of your claim. Michigan law requires minimum liability limits, but those minimums are often far below the actual cost of a serious injury case.
UIM coverage in Michigan is structured as excess coverage. It does not pay on top of the at-fault driver's policy without offset. It pays the difference. Here is how that works:
| Scenario | How the math works |
|---|---|
| Your damages: $200,000 / At-fault driver's liability limit: $50,000 / Your UIM limit: $250,000 | At-fault driver's insurer pays $50,000. Your UIM coverage pays up to $150,000 (the difference), not to exceed your $250,000 UIM limit. |
| Your damages: $200,000 / At-fault driver's liability limit: $50,000 / Your UIM limit: $100,000 | At-fault driver's insurer pays $50,000. Your UIM coverage pays up to $50,000 (the difference up to your $100,000 UIM limit). $100,000 in damages remains uncompensated. |
| Your damages: $200,000 / At-fault driver's liability limit: $250,000 / Your UIM limit: $100,000 | No UIM claim available; the at-fault driver's limits exceed your damages. Your UIM coverage only activates when the other driver's limits are less than your damages, not less than your UIM limits. |
The third scenario illustrates a critical point: UIM coverage activates based on the relationship between the at-fault driver's limits and your actual damages, not your UIM policy limits. If the at-fault driver's coverage is adequate to pay what your case is worth, UIM does not come into play.
This is why knowing the actual value of your case — before you exhaust the at-fault driver's policy — matters. Settling with the at-fault driver for their full limits without properly triggering your UIM claim can, in some circumstances, waive your UIM rights. Talk to an attorney before you accept any payment from the at-fault driver's insurer when a UIM claim may be on the table.
The Threshold Your Injuries Must Cross Before UM/UIM Pays Anything
Key Takeaway: UM/UIM covers your third-party tort claim. That claim only exists if your injuries meet Michigan's serious impairment of body function standard. If they do not, there is no third-party claim and nothing for UM/UIM to cover.
This is the part of UM/UIM coverage that Michigan drivers rarely understand until they need it.
Michigan's No-Fault system limits your right to sue for pain and suffering. Under MCL 500.3135, you can only pursue a third-party tort claim against the at-fault driver — or through UM/UIM coverage — if your injuries constitute a serious impairment of body function, a permanent serious disfigurement, or death.
The Michigan Supreme Court defined serious impairment of body function in McCormick v. Carrier, 487 Mich 180 (2010). Under McCormick, the test requires:
An objectively manifested impairment: something documented by clinical findings, imaging, or observable medical evidence. Subjective complaints alone are not sufficient.
Of an important body function: an activity or ability that plays a significant role in the person's overall normal life.
That affects the person's general ability to lead their normal life: a practical, life-impact test focused on what the person can no longer do or does with significant difficulty.
McCormick moved the standard away from severity-based gatekeeping and toward a person-centered inquiry: how has this injury changed what this person can do? A herniated disc that forces a construction worker off the job for a year is evaluated differently than the same herniation in someone whose daily activities are unaffected.
The practical consequence for UM/UIM claims is this: if your injuries do not clear the MCL 500.3135 threshold, your third-party tort claim does not exist. And if the tort claim does not exist, UM/UIM has nothing to pay. PIP continues to cover your medical bills and wage loss, but the tort compensation that UM/UIM is designed to fund requires meeting the threshold first.
Documenting how your injuries affect your daily life is not just good medicine. It is the legal foundation of a UM/UIM claim. Every functional limitation your physician documents is part of the threshold analysis.
What UM/UIM Actually Pay in Michigan
Assuming your injuries clear the MCL 500.3135 threshold, UM/UIM coverage compensates you for the same categories of damages you would pursue in a third-party tort claim against the at-fault driver:
Pain and suffering
Physical pain, discomfort, and the emotional distress caused by your injuries and their effects on your life. This is the central component of most UM/UIM claims in Michigan and the primary reason the coverage matters. PIP does not compensate for pain and suffering. UM/UIM does.
Excess economic damages above PIP
PIP benefits have caps and time limits. Work loss benefits top out at three years and a monthly maximum. If your injuries produce economic losses that exceed what PIP covers — long-term lost earning capacity, for example — those excess damages may be recoverable through a UM/UIM claim.
Permanent impairment and disability
Permanent physical limitations, chronic pain, and reduced function that will affect you for the rest of your life. These are documented through treating physician records, specialist evaluations, functional assessments, and, in serious cases, life care plans that project the long-term cost and impact of your condition.
Disfigurement
Permanent and serious disfigurement is one of the three independent thresholds under MCL 500.3135. If your injuries produced significant disfigurement, the tort claim exists regardless of whether the impairment threshold is met.
Wrongful death
When someone dies in a crash caused by an uninsured or underinsured driver, the decedent's estate and surviving family may have a claim under Michigan's wrongful death statute (MCL 600.2922) that runs through UM/UIM coverage up to the applicable policy limits. These claims have their own procedural requirements and should be evaluated by counsel immediately.
What UM/UIM Does Not Pay
Several categories of loss are either covered by PIP or outside the scope of UM/UIM altogether:
- Medical expenses and wage loss within PIP limits: these are PIP's territory, not UM/UIM's. UM/UIM does not duplicate PIP benefits.
- Property damage: UM/UIM in Michigan covers bodily injury, not damage to your vehicle. Collision coverage handles your vehicle repairs.
- Claims that do not meet the MCL 500.3135 threshold: if the threshold is not met, the tort claim does not exist. UM/UIM cannot be triggered.
- Amounts above your UM/UIM policy limits: your coverage is capped at the limits you purchased. Damages above those limits are unrecoverable through UM/UIM.
- PIP benefit disputes with your own insurer: those are handled under MCL 500.3145 and the No-Fault Act's benefit dispute framework, not under UM/UIM. For a detailed breakdown of PIP filing deadlines, see our guide on Michigan's one-year PIP filing deadline.
How to Make a UM/UIM Claim in Michigan
Key Takeaway: The claim goes through your own insurer, but your insurer is not your advocate. Notify them properly, document everything, and involve an attorney before you give any statement or sign anything.
Step 1: Confirm you have UM/UIM coverage
Pull your auto insurance declarations page. UM and UIM limits are listed separately. If you do not have the page, call your insurer and ask them to confirm your coverages and limits in writing. If you have multiple vehicles on the policy, confirm whether the limits apply per-vehicle or per-policy.
Step 2: Notify your insurer promptly
Most UM/UIM policies require prompt notice of a claim. Delayed notice can give your insurer grounds to deny or reduce the claim. Notify them in writing as soon as you know or reasonably suspect that the at-fault driver is uninsured or underinsured. Keep a copy of everything you send.
Step 3: If UIM, do not exhaust the at-fault driver's policy without protecting your UIM rights
Before accepting the at-fault driver's liability limits, notify your own insurer in writing that you are considering accepting those limits and that you intend to pursue a UIM claim for the remaining damages. Most policies require this notice. Some policies give your insurer the right to substitute their own payment for the at-fault driver's limits to preserve their subrogation rights. Failure to give proper notice before settling with the at-fault driver can waive your UIM claim entirely.
Step 4: Document your injuries and their impact on your daily life
The threshold analysis under MCL 500.3135 requires documented evidence of how your injuries affect your normal life. This means consistent medical treatment, specialist evaluations where warranted, and clear records of what you cannot do or do with difficulty. Gaps in treatment are used to argue that your injuries were not serious.
Step 5: Do not give a recorded statement without counsel
Your insurer will ask for a recorded statement as part of the UM/UIM claim process. You may be required to cooperate under your policy terms. But the statement you give will be used to evaluate — and potentially limit — your claim. The same dynamics that apply when the at-fault driver's adjuster calls apply here, except the caller is your own insurer. Review the guidance in Why Michigan Insurance Adjusters Call You Within 24 Hours before you take that call. Contact an attorney at the Michigan Legal Center first if at all possible.
Step 6: Be prepared for arbitration
Many Michigan UM/UIM policies require disputes to go to arbitration rather than litigation. If your insurer disputes the value of your claim or denies it outright, the arbitration process under your policy governs how the dispute is resolved. Arbitration has its own rules of evidence, its own timelines, and its own strategic considerations. An attorney who has handled Michigan UM/UIM arbitrations understands how to build and present these claims.
Why Your Own Insurer May Work Against You on a UM/UIM Claim
This is the part of UM/UIM coverage that surprises people most. When you file a UM/UIM claim, you are filing against your own insurance company — the company you have been paying premiums to for years. That company has a financial interest in paying you as little as possible on the claim.
The dynamics are the same as any insurance claim. Your insurer will:
- Request a recorded statement that can be used to challenge your account of the crash or the severity of your injuries
- Potentially require you to submit to an independent medical examination (IME) under your policy terms, just as a third-party insurer would
- Dispute the threshold analysis and argue that your injuries do not meet MCL 500.3135
- Challenge the value of your pain and suffering claim
- Use delay as a negotiating tool
Michigan's Unfair Trade Practices Act (MCL 500.2026) and the Insurance Code's claim handling requirements create legal standards for how insurers must process claims. But those standards do not eliminate adversarial dynamics. They define the floor, not the ceiling.
The practical reality: once you file a UM/UIM claim, your relationship with your insurer changes. You need counsel who understands Michigan UM/UIM litigation and arbitration — not just to maximize recovery, but to ensure the process is handled in a way that does not create avoidable problems.
UM/UIM and Michigan's 2019 No-Fault Reform: What Changed
Michigan's 2019 No-Fault reform (PA 21 of 2019) significantly restructured the No-Fault system by introducing tiered PIP coverage options and modifying mandatory minimum liability limits. Several of those changes affect the UM/UIM landscape.
PIP coverage tiers: drivers can now elect reduced or limited PIP coverage. If you elected a lower PIP tier, your first-party coverage for medical expenses may be more limited, which makes UM/UIM coverage more important as a safety net against uninsured and underinsured drivers.
Minimum liability limits: the reform increased mandatory minimum liability limits. However, the minimums remain low relative to the cost of serious injury cases, and many Michigan drivers carry minimum coverage. An uninsured motorist who cannot afford proper coverage may be the same driver carrying minimum limits when they do have a policy.
UM/UIM coverage is still not mandatory: the reform did not change the elective status of UM/UIM coverage. Insurers must offer it, but drivers can reject it. Given the higher rates of uninsured drivers and the reduced PIP coverage some drivers now carry, the case for maintaining UM/UIM coverage is stronger, not weaker, after the reform.
If you renewed your policy after July 2020 without reviewing your UM/UIM elections, verify your current coverage. Reform-era policy changes may have altered the coverage you assumed you had.
What to Do If You Were Hit by an Uninsured or Underinsured Driver
For a comprehensive guide to the immediate steps after any Michigan crash, see What to Do After a Car Accident in Michigan. These steps apply specifically from the moment you learn the other driver has no insurance or inadequate coverage:
Get the police report and confirm the at-fault driver's insurance status. If the police did not run insurance at the scene, that information is often available through the Michigan Secretary of State or the investigating officer.
Pull your declarations page and confirm your UM/UIM limits. If you have multiple policies — such as a personal auto policy and a separately listed commercial or umbrella policy — identify all potential sources of UM/UIM coverage.
Notify your insurer in writing. Do not rely on a phone call to constitute notice. Send written notice via email, certified mail, or your insurer's secure claims portal. Keep the confirmation.
Continue all medical treatment and document every functional limitation. Gaps in treatment are used to challenge the severity and continuity of your injuries. Every appointment, every test, and every specialist evaluation matters to the threshold analysis.
Do not accept any settlement from the at-fault driver's insurer — even their full limits — without first notifying your own insurer and protecting your UIM rights. This step is commonly missed and can be irrevocable.
Contact Christopher Trainor and the Michigan Legal Center before giving any recorded statement to your own insurer. UM/UIM claims against your own insurer require the same care and strategic awareness as third-party claims. The consultation is free.
| You paid for UM/UIM coverage. You should collect what it owes you. |
|---|
| Christopher Trainor and the Michigan Legal Center have recovered more than $300 million for Michigan accident victims. We handle UM/UIM claims through negotiation, arbitration, and litigation. We know how Michigan insurers approach these cases from the other side of the table. |
| (248) 886-8650 | MichiganLegalCenter.com |
| Free Consultation. No Fees Unless We Win. |
Frequently Asked Questions
Do I have UM/UIM coverage in Michigan?
Check your auto insurance declarations page. UM and UIM coverage are listed as separate line items with per-person and per-occurrence limits. If you are unsure, call your insurer and ask them to confirm your coverages in writing. Under MCL 500.3009(1), Michigan insurers must offer UM coverage, but you may have rejected it when you purchased or renewed the policy. If you rejected it or cannot confirm it, you should know that before you need it.
Can I stack UM/UIM coverage across multiple vehicles in Michigan?
Michigan law generally does not permit stacking of UM/UIM benefits from multiple vehicles on a single policy unless the policy expressly provides for it. If you have multiple vehicles or multiple policies, the applicable limits and anti-stacking provisions depend on your specific policy language. An attorney can review your policies and identify all available coverage before you file.
What if I was a passenger and the driver who hit us was uninsured?
As a passenger, you may have access to UM/UIM coverage through your own auto policy, the driver's policy (if they have UM/UIM), or potentially other household policies. Michigan's No-Fault priority rules under MCL 500.3114 govern which policy pays PIP benefits first. UM/UIM coverage follows different priority rules based on your policy language and your relationship to the insured vehicle. A coverage analysis is essential before you file.
The at-fault driver had minimum coverage. How do I know if UIM applies?
UIM applies when the at-fault driver's liability limits are less than the total value of your damages. The value of your damages — including pain and suffering, permanent impairment, and future losses — is not determined by your medical bills alone. It requires a full assessment of the MCL 500.3135 threshold, your documented functional limitations, and the long-term trajectory of your injuries. If the at-fault driver has $20,000 in liability coverage and your case is worth $200,000, you have a UIM claim for the gap up to your UIM limits.
What happens to my PIP claim if I also have a UM/UIM claim?
They run on separate tracks. Your PIP claim is against your own insurer for medical expenses, wage loss, and other first-party benefits under the No-Fault Act. Your UM/UIM claim is for the third-party tort damages — including pain, suffering, and excess losses — that the at-fault driver cannot pay. Both can be active at the same time. The one-year filing deadline under MCL 500.3145 applies to your PIP claim. The three-year statute of limitations under MCL 600.5805 applies to your tort claim. Review both timelines with an attorney from the date of your accident.
My insurer is offering less than my UM/UIM limits. What are my options?
If your insurer disputes the value of your UM/UIM claim, your policy likely requires arbitration before litigation. The arbitration process involves presenting evidence of your damages and the value of your tort claim, with the arbitrator deciding what the policy owes. An attorney who has handled Michigan UM/UIM arbitrations can build the claim presentation, challenge the insurer's valuation, and represent you through the process. You are not required to accept your insurer's first offer as the final word.
What is the deadline to file a UM/UIM claim in Michigan?
Two deadlines run simultaneously. The general personal injury statute of limitations is three years from the date of the accident under MCL 600.5805. Your UM/UIM policy may also have a shorter contractual limitations period. Some policies require that arbitration be demanded within one year of the accident or within a specific period after you learn of the uninsured or underinsured status. Read your policy's UM/UIM provisions carefully and confirm both deadlines with an attorney immediately after your crash.
Legal Disclaimer: The information in this blog post is provided for general educational purposes only. It does not constitute legal advice and reading it does not create an attorney-client relationship between you and the Michigan Legal Center, Law Offices of Christopher Trainor & Associates, or any of its attorneys. For your specific situation, consult an attorney.
Every case is different. The facts, injuries, deadlines, and applicable law in your situation may lead to a different outcome than what is discussed here. Past results described on this site do not guarantee a similar result in your case. Case results described in this post reflect specific facts and circumstances and are not a guarantee of future outcomes.
Michigan law, including the Michigan No-Fault Act and applicable statutes of limitations, changes over time. While we work to keep our content accurate and current, we cannot guarantee that every article reflects the most recent legal developments at the time you read it.
Legal deadlines in Michigan are strict. Missing a filing window can permanently bar your claim. If you have questions about your timeline, call us before that window closes.
If you have been injured or believe your rights have been violated, do not rely on a blog post to guide your decisions. Contact Christopher Trainor and the Michigan Legal Center at (248) 886-8650 for a free consultation. You deserve a real conversation about your specific situation, not a general article.