You're stopped at a light, someone rear-ends you, and the other driver says the words nobody wants to hear: "I don't have insurance." Or they have only the state minimum, and your medical bills are already bigger than their policy.
That's the moment uninsured and underinsured motorist coverage (UM/UIM) was built for. Texas puts it on every auto policy unless someone turned it down in writing, so there's a good chance you already have it. This guide explains how it actually pays: the underinsured math, hit-and-runs, the $250 property damage deductible and whether coverage stacks. For the full picture of Texas auto coverage, start with our complete Texas auto insurance guide.
What does uninsured motorist coverage do in Texas?
The short answer: It pays you and your passengers what an at-fault driver owes you when that driver has no insurance, too little insurance or can't be found, up to the UM/UIM limits on your own policy.
The law behind it is Texas Insurance Code §1952.101. In plain English: it pays what you're legally entitled to recover from an uninsured or underinsured driver, at limits of at least the state's 30/60/25 minimum. So UM/UIM is fault-based, unlike PIP, which pays regardless of fault.
The Texas Department of Insurance's uninsured motorist tips (updated October 14, 2024) list what it can pay for:
- Car repairs and replacing property that was in the car
- A rental car, if you need one
- Medical bills for you and your passengers
- Pain and suffering
- Diminished value, if your car is worth less after the accident
How likely is it that the other driver can't pay?
The short answer: Nationally, about one in seven drivers was uninsured in 2023 and about one in three was uninsured or underinsured, and a driver carrying only Texas's 30/60/25 minimum can be underinsured after one serious crash.
The NAIC's uninsured motorist page (updated July 30, 2025) cites the Insurance Research Council: 15.4% of motorists, about one in seven, were uninsured in 2023. The IRC's February 17, 2025 release of Uninsured and Underinsured Motorists: 2017 to 2023 adds the bigger number: 33.4% were uninsured or underinsured.
We don't quote a Texas-only percentage, because we haven't found one we can cite from a source we trust. And the underinsured half is the part people underestimate. A driver carrying exactly the Texas minimum has $30,000 of bodily injury coverage per person. One ambulance ride, a few nights in the hospital and some missed work can pass that quickly. That driver is fully legal and still underinsured. Our guide to what 30/60/25 means explains the minimum itself.
How does underinsured coverage actually pay?
The short answer: Your underinsured coverage pays the damages you're owed beyond what the at-fault driver's insurance pays, up to your own UIM limit.
Section 1952.103 defines an underinsured vehicle as one with liability coverage whose limits fall below your own UIM limits, or are pushed below them by other claims from the same crash. Section 1952.106 then says your UIM pays what you're legally owed, up to your limit, reduced by what you recover or could recover from the other driver's insurer.
| Step | Without UIM | With $100,000 per-person UIM |
|---|---|---|
| Your injury damages | $80,000 | $80,000 |
| Other driver's liability (30/60/25) pays | $30,000 | $30,000 |
| Your UIM pays | $0 | $50,000 |
| Left for you to chase from the driver personally | $50,000 | $0 |
Two practical notes. First, under §1952.108, an insurer that pays you is entitled, up to what it paid, to the proceeds of any settlement or judgment you get from the people responsible. That's one reason to talk to your own insurer before you sign a settlement release with the other driver's company.
Second, if your UIM limits are no higher than the other driver's liability limits, there may be no underinsured claim at all. UIM helps most when your limits are higher than theirs.
Does UM/UIM cover a hit-and-run in Texas?
The short answer: Yes, if the unknown driver's vehicle actually made contact with you or your car, because Texas law requires physical contact for a hit-and-run UM claim.
TDI's hit-and-run guidance (January 13, 2025) points to two coverages that can repair your car after a hit-and-run: collision, or UM/UIM property damage. It notes UM/UIM usually carries a lower deductible and may pay for a rental.
The catch is in §1952.104. When the at-fault driver is unknown, Texas UM coverage requires that "actual physical contact" occurred between that driver's vehicle and you or your property. In plain English: a car that hits you and drives off counts. A car that swerves into your lane, forces you into a ditch and never touches you doesn't qualify for UM. That crash usually falls to your collision coverage, if you carry it.
If it happens to you:
- Call the police as soon as you're safe, and get the report number.
- Photograph the contact point, including any paint transfer.
- Note witnesses and the plate, color and make if you saw them.
- Tell your insurer promptly. Your policy sets the notice terms.
Our guide to car insurance after an accident in Texas walks through the scene and claim steps in more detail.
Should you keep UM property damage if you already have collision?
The short answer: Usually yes, because Texas sets the UM property damage deductible at $250, which is often lower than a collision deductible, and it can pay for things collision may not.
Section 1952.105 makes UM property damage coverage subject to a $250 deductible. TDI's tips page says the same, and adds that your collision deductible is likely much higher.
| Question | UM/UIM property damage | Collision |
|---|---|---|
| Deductible | $250, set by Insurance Code §1952.105 | The deductible you chose |
| When it pays | An uninsured, underinsured or hit-and-run driver (with contact) is at fault | Your car is damaged in a crash, whoever is at fault |
| Extras TDI lists | Rental if needed, property in the car, diminished value | Depends on your policy and add-ons |
| Older paid-off car without collision | Still pays when an uninsured driver hits you | Not on the policy |
That last row matters. If you've dropped collision on an older car you own outright, UM property damage is the main coverage left to fix it when an uninsured driver hits you.
How much should it be? TDI's rule of thumb is to carry at least enough UM property damage to replace your vehicle. The Texas minimum is $25,000, which may not replace a newer truck.
Can you stack UM/UIM coverage in Texas?
The short answer: Usually not within one company's policies, because insuring more cars doesn't raise the per-person limit, but a policy from a different company that also applies, such as a friend's, may add coverage.
"Stacking" means adding limits together, for example counting $30,000 of UM once for each of three cars. Section 1952.104 requires the policy form to say that the total paid to any one person from one occurrence may not exceed the limit stated in the policy, "regardless of the number of persons insured, policies or bonds applicable, vehicles involved, or claims made." In plain English: three cars on one policy don't triple your UM limit.
Coverage from another company's policy is a different matter. TDI's personal auto form review checklist (updated March 11, 2026) says anti-stacking language may only apply to policies issued to the named insured by the same company. So two of your own policies with one company may be written so their limits don't add up. The checklist also says "other insurance" clauses may not use anti-stacking language, and that "insureds are entitled to the coverage that they pay for."
So if you're hurt as a passenger in a friend's car insured with a different company, their UM/UIM and yours may both be in play, shared according to each policy's terms. Give both insurers notice.
How do you check whether you rejected it, and how do you get it back?
The short answer: Look for UM/UIM on your declarations page, and if it's missing, ask your insurer in writing to add it, because a written rejection carries into every renewal until you do.
Under §1952.101(c), UM/UIM comes off a Texas policy only if a named insured rejects it in writing. Once it's rejected, that insurer (or an affiliated one) doesn't have to include it in a renewal, reinstatement or replacement policy unless a named insured asks for it in writing. In plain English: a form signed years ago, maybe to trim a quote, can still be shaping your policy today.
- Find your declarations page in your insurer's app or renewal packet.
- Look for two lines: UM/UIM bodily injury and UM/UIM property damage, each with a limit.
- Compare them to your liability limits. Liability at 100/300/100 with UM/UIM at 30/60/25 protects strangers better than your own family.
- If a line is missing, ask in writing to add it, then check the updated declarations page.
TDI's checklist notes that UM/UIM rejection forms aren't part of the policy itself, so if you don't remember what you signed, ask your insurer for a copy.
How much UM/UIM should you carry?
The short answer: For most households, match your UM/UIM to your liability limits, carry enough UM property damage to replace your car, and keep PIP alongside it.
There's a ceiling. Under §1952.105, insurers offer UM/UIM in the amounts you want, but not above your policy's liability limits. So if you want $250,000 of UM/UIM per person, your liability needs to be at least that high too.
Match your liability
Protect your own family at least as well as you protect the other driver.
Enough to replace the car
TDI's rule of thumb.
Small steps are possible
TDI says you can usually add UM/UIM in $5,000 increments.
Keep PIP too
PIP pays your medical bills and lost income regardless of who caused the crash (Insurance Code §1952.155).
Whether you commute into Houston daily or mostly drive around Friendswood, the other driver's limits are the part you can't choose. If price is the worry, there are better places to save than UM/UIM. Our guide on how to lower car insurance in Texas covers levers that keep your protection intact, and our comparison walkthrough explains how to hold coverage constant while you shop.
Our public carrier lineup for auto coverage is Geico, Progressive, Liberty Mutual and Safeco. We re-confirm which carriers can write your specific policy before every quote, because appetite and appointments change. We are not appointed with every carrier in Texas. When we re-shop coverage, clients save on average about $500 a year, and we price UM/UIM at your liability limits so you can see what the full protection costs. Start on our auto insurance page or get a quote.
The bottom line
UM/UIM is the part of your policy that protects you from other drivers' choices: no insurance, too little insurance or no stopping at all. Pull your declarations page this week and look for those two lines. If they're missing or thin, we'll help you fix it.
Last reviewed by the Watson Insurance team on October 28, 2026. Statute references are to Texas Insurance Code chapter 1952, subchapter C; TDI guidance and the IRC national uninsured figures are re-checked each quarter. Educational only, not personalized insurance advice.
