Part C: Uninsured & Underinsured Motorists
Key Takeaways
- Part C UM/UIM is first-party coverage that responds when the at-fault driver has no insurance or not enough to pay the insured's injuries.
- Uninsured motorist covers no-insurance, hit-and-run, and insolvent-insurer situations; underinsured motorist covers insufficient limits.
- UM/UIM limits may not exceed the policy's bodily-injury liability limits.
- UIM pays the difference between the insured's damages (up to the UIM limit) and amounts recovered from the at-fault driver, not stacked on top.
Part C: Protection Against Bad Drivers
Part C (Uninsured/Underinsured Motorists, UM/UIM) is a first-party coverage that steps in when the at-fault driver has no insurance or not enough insurance to pay the insured's injuries. It places the insured in roughly the position they would have occupied had the at-fault driver carried adequate liability coverage. Because Ohio is an at-fault state, UM/UIM is the insured's safety net against the many drivers carrying only minimum limits or none at all.
Uninsured vs. Underinsured
| Type | Triggers when the at-fault driver |
|---|---|
| Uninsured Motorist (UM) | Has no liability insurance, or is a hit-and-run/unidentified driver |
| Underinsured Motorist (UIM) | Has liability limits lower than the insured's damages (and lower than the insured's UIM limit) |
Uninsured motorist coverage applies when the other driver has no insurance, is a hit-and-run, or whose insurer is insolvent. Underinsured motorist coverage applies when the other driver has some insurance but not enough to cover the insured's damages; UIM typically pays the difference between the insured's UIM limit and the amount actually recovered from the at-fault driver, not stacked on top of it.
UM/UIM Limit Rules
A key rule the exam tests: the UM/UIM limits cannot exceed the policy's bodily injury liability limits. An insured who carries 100/300 liability can buy UM/UIM up to 100/300 but no higher, because UM/UIM is designed to restore the protection a responsible at-fault driver would have provided, not to create a windfall. Some states allow UM property damage (UMPD) as well as bodily injury; the bodily-injury form is the core tested coverage.
Worked UIM Example
Suppose an insured suffers $80,000 of bodily-injury damages in an accident caused by a driver who carries only Ohio's minimum $25,000 per-person BI limit. The insured carries $100,000 UIM. The insured first collects $25,000 from the at-fault driver's insurer. Because the insured's UIM limit ($100,000) exceeds that recovery, UIM responds for the difference up to the UIM limit: $100,000 UIM limit minus the $25,000 already received equals $75,000 from UIM, bringing the insured to $100,000 total, which here fully covers the $80,000 of damages.
This reduce-by-amounts-recovered structure, rather than adding the UIM limit on top of the at-fault recovery, is the calculation the exam expects.
Why It Matters in Ohio
Ohio law historically required insurers to offer UM/UIM coverage, and although a named insured may reject it in writing, the coverage is central to protecting Ohio drivers given the prevalence of minimum-limits and uninsured motorists. A scenario describing an at-fault driver with no insurance or with limits far below the victim's losses is signaling Part C, and the exam wants you to identify whether UM (no insurance/hit-and-run) or UIM (insufficient insurance) applies and to compute the reduced UIM payment.
An insured carries 100/300 bodily-injury liability limits. What is the maximum UM/UIM bodily-injury limit the insured may purchase?
An insured with $250,000 UIM is injured ($200,000 in damages) by a driver carrying only $25,000 in liability. After collecting the $25,000, how much does UIM pay?
Computing the UIM Shortfall
Part C protects the insured against drivers who carry no insurance or too little. Uninsured motorist applies when the at-fault driver has no insurance, is a hit-and-run or unidentified, or whose insurer is insolvent. Underinsured motorist applies when the at-fault driver has some insurance but not enough, and UIM pays the difference between the insured's damages (up to the UIM limit) and the amount recovered from the at-fault driver, not stacked on top of that recovery.
A worked UIM case: the insured suffers $90,000 in bodily-injury damages caused by a driver carrying Ohio's $25,000 minimum, and the insured holds $100,000 UIM. The insured collects $25,000 from the at-fault driver, then UIM pays up to its limit to cover the shortfall, here $65,000 ($90,000 damages minus the $25,000 recovered), bringing the insured to full recovery within the $100,000 UIM limit.
| Situation | Coverage |
|---|---|
| At-fault driver uninsured | UM |
| Hit-and-run/unidentified | UM |
| At-fault driver underinsured | UIM (reduce-by-recovery) |
| UM/UIM limit cap | Cannot exceed BI liability limits |
Two rules are tested directly. First, UM/UIM limits may not exceed the policy's bodily-injury liability limits, because the coverage restores the protection a responsible at-fault driver would have provided, not a windfall. Second, Ohio insurers have historically been required to offer UM/UIM, which a named insured may reject in writing. When a scenario describes an at-fault driver with no insurance or with limits far below the victim's losses, identify UM (no insurance) versus UIM (insufficient) and compute the reduce-by-recovery payment.
Two UM/UIM rules are tested directly: the coverage cannot exceed the policy's bodily-injury liability limits, and UIM pays the shortfall between the insured's damages (up to the UIM limit) and amounts recovered from the at-fault driver, not stacked on top of that recovery. Identify UM (no insurance, hit-and-run, insolvent insurer) versus UIM (insufficient limits), then compute the reduce-by-recovery payment.
In Ohio's at-fault market, where many drivers carry only the 25/50/25 minimum or nothing, UM/UIM is the insured's safety net, and insurers must offer it though a named insured may reject it in writing.
A common UM/UIM trap offers an answer that adds the UIM limit on top of the at-fault recovery; the correct approach reduces by the amount recovered, paying the difference up to the UIM limit, so always subtract the at-fault driver's payment before applying the UIM limit, and never let the combined recovery exceed the insured's actual damages.