Underinsured Motorist Coverage in Texas: Do You Need More? [2026]

What UIM Coverage Is

Underinsured motorist (UIM) coverage is part of the uninsured/underinsured motorist (UM/UIM) coverage Texas insurers must offer. It pays you when the at-fault driver has insurance, but not enough to cover your damages. The Texas Department of Insurance (TDI) notes UM/UIM can pay for:

Car repairs and property inside your car
Rental car expenses
Medical bills for you and your passengers
Pain and suffering
Diminished value after a crash

TDI also notes a $250 deductible applies to UM/UIM property damage claims and that you can typically add UM/UIM in $5,000 increments.

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Key takeaway: UIM fills the gap between the at-fault driver's limits and your actual losses — up to your UIM limits.

UM vs UIM Explained

UM and UIM are often bundled together on Texas auto policies, but they're triggered in different situations. UM applies when the other driver has no insurance (or flees the scene). UIM applies when the driver has some insurance, but not enough.

Want a deeper dive? See our full guide on uninsured motorist coverage in Texas.

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UM vs UIM in Texas (Quick Comparison)

UM vs UIM in Texas (Quick Comparison)

UM (Uninsured Motorist)	UIM (Underinsured Motorist)
At-fault driver has no liability insurance	At-fault driver has some liability insurance, but limits are too low
Often triggered by hit-and-run crashes (TDI)	Triggered after the at-fault driver's limits are exhausted
Pays eligible damages up to your UM limits	Pays the gap up to your UIM limits (Texas Insurance Code §1952.106)

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TX UIM Laws & Requirements

Texas law doesn't require you to buy UIM, but it does require insurers to offer it. Under Texas Insurance Code §1952.101, UM/UIM coverage must be included unless the named insured rejects it in writing.

The law also ties UM/UIM minimums to Texas' financial responsibility limits. The Texas Department of Insurance lists the minimum liability requirement as 30/60/25:

$30,000 bodily injury per person
$60,000 bodily injury per accident
$25,000 property damage

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When Minimum Coverage Falls Short (Real Scenarios)

The Texas minimum (30/60/25) is designed to be a legal floor, not a full shield. Real-world costs can quickly exceed those limits.

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Example cost benchmarks (all from published sources):

Average new-vehicle transaction price: $49,740 (Cox Automotive / Kelley Blue Book, Dec. 2024)
Average cost per hospital stay: $11,700 (HCUP Statistical Brief, NCBI Bookshelf)

Example: How 30/60/25 Can Run Out Quickly

Example: How 30/60/25 Can Run Out Quickly

Cost item (based on published averages)	Estimated amount
Average new-vehicle price	$49,740
Two hospital stays at $11,700 each	$23,400
Total estimated damages	$73,140
Max property damage paid under 30/60/25	$25,000
Property damage gap	$24,740

Even without surgeries, rehab, or lost wages, a single crash can create a large gap — especially when expensive vehicles or multiple injured people are involved. That's where UIM protection helps.

How Much UIM Costs in TX

There isn't a statewide public "average" for UIM premiums in Texas, but national estimates show it's usually a small add-on. WalletHub's 2026 guide estimates UM coverage costs about $50–$75 per year on average — roughly $4–$6 per month before local adjustments. Texas quotes vary by insurer, driving record, location, and chosen limits.

TDI notes you can often increase UM/UIM in $5,000 increments, so you can scale protection without a huge premium jump.

Sample UM/UIM Limit Options & Typical Add-On Cost

Sample UM/UIM Limit Options & Typical Add-On Cost

Example limit choice	Cost notes (from published sources)
30/60/25 (minimum)	WalletHub estimates UM coverage at $50–$75/year on average (national estimate).
50/100/50	Higher limits typically cost more; exact quotes vary by insurer and driver profile.
100/300/100	Often recommended for stronger protection; ask for a quote to see the incremental cost.

If you want numbers from multiple carriers side-by-side, try a quick comparison: /compare.

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Stacking Rules

"Stacking" means combining UM/UIM limits from multiple policies or vehicles. Texas does not have a statute that explicitly allows or prohibits stacking, and case law can vary. An IRMI review of Texas UM/UIM case law notes that courts have allowed stacking in some circumstances when anti-stacking provisions would prevent full recovery, but policy language can still limit stacking.

Practical takeaway: Don't assume stacking. Read your policy's "other insurance" language and ask your insurer whether stacking is permitted in your situation.

How to Choose Your Limits

A good rule of thumb is to match your UM/UIM limits to your liability limits. But consider these factors:

Vehicle value: If your car is expensive, the $25,000 property-damage minimum may not be enough (Cox/KBB average new-vehicle prices are near $50,000).
Medical risk: One hospital stay averages $11,700; multiple injured passengers can exceed the per-accident limit quickly.
Income & assets: Higher limits help protect savings and future income if a crash causes a long recovery.

How to File a UIM Claim

UIM claims are usually step-by-step. Here's a practical checklist:

Call the police and document the crash. You'll need a report to prove the other driver's fault.
Seek medical care and keep records. Save bills, discharge papers, and proof of lost wages.
Notify your insurer early. Your policy may require prompt notice.
Settle with the at-fault driver's insurer first. Texas Insurance Code §1952.106 says UIM benefits are reduced by the amount recovered from the other driver.
Submit a UIM claim for the gap. Provide evidence of total damages and the at-fault driver's limits.

If you're unsure about coverage language or offsets, ask your carrier to walk you through the limits and how they'll be applied.

Final thought

Texas minimum coverage keeps you legal, but it often isn't enough to cover real-world costs. UIM is one of the cheapest ways to protect yourself against other drivers' low limits — and one of the most important add-ons in a state with a high uninsured-driver rate.