Texas uninsured and underinsured motorist coverage: what UM/UIM pays and how it works

Texas uninsured and underinsured motorist coverage (UM/UIM) pays you when another driver causes a crash and has no insurance, or too little. Under Insurance Code Subchapter C of Chapter 1952, an insurer must include it in an auto liability policy, and it applies unless a named insured rejects it in writing.

Most drivers think auto insurance protects other people from you. UM/UIM is the part that protects you from someone else. It is also a favorite exam topic, because it combines a mandatory-offer rule, a written-rejection rule and a handful of definitions that are easy to mix up.

What is uninsured motorist coverage in Texas?

The statute defines UM/UIM as the provisions of an auto liability policy that protect insureds who are legally entitled to recover damages from owners or operators of uninsured or underinsured vehicles. The damages can be bodily injury, sickness, disease, death or property damage.

Two points matter. First, the coverage is tied to the insured's legal entitlement to recover. If the other driver is not at fault, UM/UIM does not pay. Second, the limits must be at least those set by the Transportation Code, the same 30/60/25 financial responsibility minimums covered in our guide to Texas minimum auto insurance requirements. The liability minimums are $30,000 per person, $60,000 per collision for two or more people and $25,000 for property damage.

Does Texas require uninsured motorist coverage?

Texas requires the insurer to provide it, not the driver to buy it. Section 1952.101(b) says an insurer may not issue an auto liability policy unless it provides UM/UIM in the policy or supplemental to it. That includes policies placed through the Texas Automobile Insurance Plan Association.

Subsection (c) then gives the driver an exit. The coverage does not apply if any named insured rejects it in writing. The Texas Department of Insurance describes the same mechanic for personal injury protection: it is included unless you decline in writing.

The rejection does not need to be repeated every year. If the named insured rejected UM/UIM on a policy, the insurer does not have to include it on a reinstated or renewed policy from the same insurer or an affiliate, unless the named insured later asks for it in writing.

What is the difference between uninsured and underinsured?

Section 1952.103 defines an underinsured vehicle by comparing limits. The other driver's liability limit has to be lower than yours, or have been used up by other claimants. A driver with $30,000 per person who hits someone carrying a larger UIM limit leaves a gap that UIM is designed to fill.

How does hit-and-run work under UM?

When the at-fault driver is unknown, Texas imposes a stricter test. Section 1952.104(3) requires that "actual physical contact must have occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured."

That is why a phantom vehicle that forces you off the road without touching you usually falls outside the statutory requirement. A candidate who remembers one thing about hit-and-run should remember the word contact. You can read the full wording in Section 1952.104.

What limits and deductibles apply?

Section 1952.105 sets the structure:

• Bodily injury limits are offered in the amounts the insured wants, but not above the bodily injury liability limits on the same policy.
• Property damage coverage is offered the same way, subject to a $250 deductible.
• Neither can be offered below the Transportation Code minimums.

So a driver with a modest liability limit cannot buy a UM limit far above it. The liability limit is the ceiling, and the Transportation Code minimum is the floor.

For underinsured claims, Section 1952.106 says the policy pays what the insured is legally entitled to recover, up to the policy limit, reduced by the amount recovered or recoverable from the at-fault driver's insurer. In other words, UIM tops up. It does not stack on top of the other driver's payment.

Can you use UM property damage and collision together?

Yes, with rules. Section 1952.107 lets an insured with both collision and uninsured or underinsured property damage coverage recover under the one the insured chooses. If neither is enough alone, the insured can use both, designating one as primary and paying that coverage's deductible. The primary coverage must be exhausted before the secondary pays, and total recovery cannot exceed actual damages.

If the secondary deductible is the same as or less than the primary one, the insured does not pay it. If it is greater, the insured pays only the difference. This is the kind of detail that makes a good scenario question. For how settlement amounts are measured, see ACV vs RCV.

Who pays in the end? Subrogation and burden of proof

After paying a UM/UIM claim, the insurer steps into your shoes. Section 1952.108 gives it the right, to the extent of its payment, to the proceeds of any settlement or judgment against the person legally responsible. That is subrogation applied to this coverage.

Two procedural rules are also testable. The insurer bears the burden of proof in a dispute about whether a vehicle is uninsured (Section 1952.109). And an action against the insurer over this coverage may be brought only in the county where the policyholder or beneficiary lived at the time of the accident, or where the accident occurred (Section 1952.110).

How does UM/UIM show up on the Texas P&C exam?

The exam treats it as an auto and Texas law topic. Expect questions on the mandatory offer, the written rejection, who must sign, the contact requirement for unknown drivers, the difference between uninsured and underinsured, and the limit ceiling tied to liability limits. Always check the current content outline for how auto is weighted rather than relying on a summary.

What this means for you

If you are studying, memorize the triggers rather than the section numbers: offered automatically, rejected only in writing by a named insured, contact needed for unknown drivers, limits capped at liability limits and never below the statutory minimum. If you will sell auto, the practical lesson is to document every rejection. A signed rejection is the agent's protection if a client is hit by an uninsured driver later.

Test yourself on auto and Texas law with the 10 free practice questions, or work through the full Texas P&C course.

Frequently asked questions

Is uninsured motorist coverage mandatory in Texas?

Insurers must provide it in or alongside an auto liability policy, but a driver is not forced to keep it. Under Section 1952.101(c), it does not apply if any named insured rejects it in writing. Without a written rejection, the coverage is part of the policy.

Does Texas UM coverage pay for hit-and-run accidents?

Yes, but only when physical contact occurred between the unknown driver's vehicle and you or your property. Section 1952.104(3) sets this requirement. A near miss with no contact generally does not qualify under the statutory wording, even if the other driver caused your crash.

What is the difference between UM and UIM?

UM applies when the at-fault driver has no liability insurance, or the insurer is insolvent. UIM applies when the other driver has coverage but with limits lower than your own UIM limit, or reduced by other claims from the same accident. Texas groups both under Subchapter C.

Is there a deductible on uninsured motorist property damage?

Yes. Section 1952.105(b) subjects property damage coverage to a $250 deductible. Bodily injury UM/UIM has no statutory deductible. If you also use collision coverage, Section 1952.107 explains how the two deductibles interact when both coverages pay on the same loss.

Can I have higher UM limits than liability limits?

No. Section 1952.105 says bodily injury and property damage UM/UIM limits are offered in the amounts the insured wants, but not above the limits of the liability provisions of the same policy. They also cannot fall below the Transportation Code minimums.

Do I have to reject UM/UIM again at renewal?

No. If the named insured rejected the coverage, Section 1952.101(c) does not require the insurer to provide it on a reinstated or renewal policy from the same or an affiliated insurer. The insured can bring it back by requesting it in writing.