Those numbers hide a sobering truth: a meaningful share of all collisions involve drivers with no insurance or with policy limits too small to cover the cost of an ambulance ride, let alone months of hospital care and lost wages. Your uninsured motorist (UM) and underinsured motorist (UIM) coverage is the legal safety net that steps in when someone else’s insurance fails. At Lee Law Firm, we devote a significant part of our practice to forcing carriers, often our clients’ own carriers, to honor those safety nets in full.
Understanding UM & UIM Coverage in New Jersey
Auto insurance in New Jersey is anything but one-size-fits-all. The state offers two core policy types, basic and standard, each with different coverage options, costs, and consequences. Understanding where uninsured motorist (UM) and underinsured motorist (UIM) coverage fit into your policy is crucial if you ever find yourself in an accident with an inadequately insured driver.
Basic vs. Standard Policies
A basic policy, while cheaper, offers limited protection and does not include UM/UIM coverage unless added as an optional rider. The more widely purchased standard policy provides broader protections and
must include UM coverage in at least the same amounts as your bodily injury liability limits, according to
N.J.S.A. 39:6A-14. You also have the option to purchase UIM coverage, up to, but not exceeding, your liability limits.
For instance, if you have a standard policy with bodily injury liability limits of $100,000 per person and $300,000 per accident, your UM coverage must match those limits. You may also choose UIM coverage up to that amount. The New Jersey Department of Banking & Insurance (DOBI) recommends selecting higher-than-minimum coverage, stating in its Auto Insurance Buyer’s Guide that increasing your UM/UIM limits is one of the best strategies to protect against significant financial loss after a crash.
What Do These Terms Mean?
To help clarify how these coverages function in the real world, here is a quick breakdown:
Term | What It Means | When It Applies |
Uninsured Motorist (UM) | Your insurance company acts as if it covers the at-fault driver. | The other driver has no valid insurance, or the crash is a hit-and-run. |
Underinsured Motorist (UIM) | Your insurer pays the shortfall after the at-fault driver's policy is exhausted. | The at-fault driver’s insurance limits are too low to cover your full damages. |
These coverages are first-party benefits, meaning you claim them through your own insurance company. However, they require you to meet certain conditions, such as reporting deadlines and loss documentation, that can differ significantly from third-party liability claims.
Pro Tip: Don’t Count on “Stacking” Coverage
Unlike some other states, New Jersey prohibits the “stacking” of UM/UIM limits across multiple policies for most standard policies. This means you can’t combine the UM/UIM coverage from several vehicles in your household to increase your payout for a single accident. Because of this, it is especially important to ensure the vehicle you and your family drive most often carries the highest available limits. Otherwise, you may find yourself underinsured when it matters most.
Why UM/UIM Protection Is Critical
It’s a troubling fact, but not every driver on the road is following the law. Despite the state’s insurance mandate, many New Jersey motorists either carry no insurance or only the absolute minimum limits. According to the Insurance Information Institute, about 12.6% of drivers nationwide are uninsured at any given time. Although New Jersey ranks better than many other states, with an estimated 3.1% uninsured rate, that still translates to over 100,000 drivers operating illegally and irresponsibly on Garden State roadways.
The potential for injury or death in an accident with one of these drivers is very real. Add in the ever-increasing cost of medical care, vehicle repair, and lost income, and it becomes clear why having strong UM/UIM limits is essential, not optional.
Here are several real-world situations where this coverage becomes your financial lifeline:
1. Hit-and-Run Crashes
Some of the most frustrating accidents are those in which the other driver flees the scene. Whether out of fear, intoxication, or lack of a valid license or insurance, hit-and-run drivers often leave injured victims without a clear path to financial recovery. In these situations, uninsured motorist coverage allows you to recover damages from your own insurer, as though they insured the fleeing driver.
Unfortunately, many hit-and-run crashes involve significant injuries. If the crash involved serious trauma or wrongful death and there is no way to identify the driver, your only hope for compensation may be your UM policy. Without it, you're left with bills you didn’t cause and no legal recourse.
2. Drivers With Minimum Coverage Only
New Jersey’s minimum liability limits, $25,000 per person and $50,000 per accident, may sound substantial, but in today’s healthcare economy, they’re often woefully inadequate. A single ambulance ride and one night in the emergency room can cost tens of thousands of dollars. If your injuries require surgery, hospitalization, or long-term therapy; that $25,000 can be spent within hours of your initial care.
Now imagine that you are a passenger in a vehicle with two other people, and all three of you are injured. That $50,000 per accident limit gets divided three ways, meaning each of you may receive far less than you need. Your underinsured motorist coverage steps in to fill the financial gap, ensuring you aren’t left struggling to cover legitimate, long-term losses.
3. Out-of-State Drivers With Lower Limits
Not all states have the same minimum insurance requirements as New Jersey. In fact, some states allow drivers to carry much lower limits. For example, Florida does not even require bodily injury liability coverage for its drivers. If you’re injured by a motorist visiting from one of these states, their insurance may not cover your full losses. In these cases, your UIM coverage makes up the difference between the other driver’s policy and your total damages.
This risk is particularly high in popular tourist destinations, college towns, or near major highways where out-of-state traffic is common.
4. Delivery and Rideshare Drivers “Between Periods”
Drivers for Uber, Lyft, DoorDash, and other app-based services are often uninsured or underinsured between app periods, meaning when they are not actively transporting passengers or goods. These “dead zones” of coverage can create serious complications in a crash. Some personal insurance policies exclude coverage entirely when the vehicle is being used for commercial purposes.
UM/UIM coverage can serve as a much-needed safety net in these scenarios, especially when it’s unclear whether the commercial platform or the driver’s personal policy should apply. Having robust limits means your own policy can provide coverage, even when the at-fault party’s insurance carrier points fingers.
No one expects to be in a crash, let alone one involving a driver who can't pay for the harm they've caused. But if and when it happens, UM and UIM coverage could be the only things standing between you and a financial crisis.
These policies allow you to recover:
- Medical expenses beyond what PIP (Personal Injury Protection) covers
- Lost wages during your recovery period
- Ongoing care costs and rehabilitation
- Pain and suffering
- Permanent disability or disfigurement
- Wrongful death-related costs for surviving family members
By reviewing your policy now and consulting with an experienced attorney, you can ensure you’re protected when it matters most. And if you’ve already been in an accident with an uninsured or underinsured driver, it’s crucial to act quickly. The decisions you make today can shape your physical, emotional, and financial recovery for years to come.
What Should You Do After an Accident With an Uninsured or Underinsured Driver?
- Call 9-1-1 and wait for law enforcement. A police crash report (Form NJTR-1) is the bedrock document your insurer will demand.
- Get medical attention immediately. Adrenaline masks pain, and delaying care invites both medical risk and insurance disputes.
- Document everything:
- Photos of all vehicles, skid marks, debris fields
- Dash-cam or security-cam footage
- Witness names and phone numbers
- A quick voice memo describing weather, lighting, and roadway conditions
- Exchange information, if you can. If the other driver admits to having no coverage or shows an expired card, record that admission on your phone (politely).
- Notify your own insurer in writing within 30 days unless your policy allows more time. Missing that contractual window can void UM/UIM benefits even though New Jersey’s two-year personal-injury statute of limitations has not yet expired.
- Speak with counsel before any recorded statement. Insurers record calls for a reason: to find sound bites they can use to shrink or deny your payout.
Filing an Uninsured Motorist Claim
Filing an uninsured motorist (UM) claim is similar in some ways to a third-party liability claim, but it involves seeking compensation directly from your own insurance company rather than the at-fault driver’s insurer. This distinction makes it a contract-based claim, meaning your ability to recover depends on following the terms and conditions laid out in your insurance policy.
You may be eligible to recover compensation for:
- Medical expenses not covered by PIP
- Lost wages
- Pain and suffering
- Permanent disability or disfigurement
- Other out-of-pocket losses
To maximize your chances of success, it’s important to understand and follow the UM claims process closely.
1. Prompt Notice of the Claim
Most insurance policies require that you notify the insurer of a UM claim within 30 to 90 days of the accident.
- Submit the notice in writing, even if you file it online.
- Send it via certified mail or take screenshots of any online submission.
- Include the date, location, and nature of the accident.
Tip: Failing to meet this deadline could result in a denial of coverage, even if the accident clearly qualifies for UM benefits.
2. Proof of Loss Submission
Once notice is given, you’ll be required to submit documentation that proves your damages. This typically includes:
- A copy of the police report (NJTR-1)
- All related medical records and bills
- Vehicle damage estimates or repair receipts
- Proof of lost wages (pay stubs, tax forms, employer letters)
- Out-of-pocket expenses such as transportation or assistive devices
3. Carrier Investigation
The insurance company will begin an investigation, which may take 60 to 90 days or longer depending on the complexity of your case. You may be asked to:
- Give a recorded statement
- Submit to a vehicle inspection
- Attend an Independent Medical Examination (IME)
4. Settlement or Arbitration
If the insurer does not agree with the value of your claim, you may need to proceed to binding arbitration, which is often required by the terms of your policy.
- Your attorney will formally demand arbitration and submit supporting exhibits.
- The arbitration panel (often one or three neutral arbitrators) will review the evidence and decide on an award.
- Awards can be significant when permanent injuries, disability, or high medical costs are involved.
Key Takeaways:
- Always act quickly and notify your insurer of a UM claim as soon as possible.
- Document everything: medical care, lost income, car damage, and all communications with your insurer.
- Don’t treat your insurer as a friend; they have a financial interest in minimizing your payout.
- Legal representation is critical to protect your rights, especially when arbitration is on the table.
By understanding your obligations and legal rights under your policy, you put yourself in the best position to recover every dollar you’re owed. An experienced attorney can help you manage this process, ensuring that deadlines are met, damages are fully documented, and insurers are held accountable.
Pursuing an Underinsured Motorist Claim
UIM claims add two hurdles: you must exhaust the at-fault driver’s liability limits and obtain your own insurer’s written consent to accept those limits. Failure at either step risks forfeiting UIM. Under N.J.A.C. 11:3-7, your carrier receives a credit for the liability settlement, paying only the shortfall up to your UIM limit.
Example: You suffer $400,000 in provable losses. The defendant’s carrier tenders its $50,000 limit. Your UIM limit is $300,000. After crediting the $50,000, your carrier may owe up to $250,000.
Common valuation battles include:
- Future surgeries and prosthetic replacements for orthopedic injuries
- Lifetime diminution of earning capacity for skilled tradespeople
- Psychological harm, PTSD, chronic pain syndrome, depression
- Loss of consortium for a spouse whose household contributions have skyrocketed
An attorney assembles economists, vocational experts, and life-care planners to document each category before the arbitration panel.
Statutes of Limitation & Contractual Deadlines
- Two-year statute (N.J.S.A. 2A:14-2): The clock starts the day of the crash for bodily-injury claims.
- Arbitration-demand deadline: Three years in most policies, but some shrink it to 24 months; read carefully.
- First-party benefits notice: 30–90 days for UM/UIM; even shorter for PIP.
Courts strictly enforce these contractual bars, reasoning that you agreed to them when you bought the policy. A single missed date can transform a valid six-figure claim into a zero.
Common Insurer Tactics (and Ways to Counter Them)
Even though UM/UIM claims are filed against your own insurance company, that doesn’t mean the insurer will be cooperative. In fact, these claims are often met with the same delay tactics and skepticism that you'd expect from any adversarial third-party insurer. Many companies employ strategies to reduce or deny valid claims, but at Lee Law Firm, we recognize these tactics, and we know exactly how to counter them.
Here are some of the most common approaches insurers take to minimize your claim and how we can help you fight back:
Denying Liability
- What it looks like: The insurer claims you caused or contributed to the crash. For example: “Our insured says you were speeding and cut him off.”
- How to respond:
- Conduct independent accident reconstruction
- Retrieve electronic control module (ECM) data from vehicles
- Perform scene investigations and obtain surveillance footage or witness statements
- Use expert testimony to challenge unfounded blame
Lowball Settlement Offers
- What it looks like: The adjuster offers an unreasonably low figure, often before reviewing your full medical file or calculating future care costs.
- How to respond:
- Draft a comprehensive demand letter outlining your injuries, treatment plan, economic losses, and pain and suffering
- Support the demand with itemized documentation and verdicts or arbitration awards from similar New Jersey cases
- Emphasize long-term impacts such as future surgery, inability to return to work, or reduced quality of life
“Step-Down” Clause Enforcement
- What it looks like: The insurer applies a hidden clause that reduces your UM/UIM limits if you were driving someone else’s car at the time of the accident.
- How to respond:
- Analyze the policy language for ambiguous or unenforceable terms
- Argue that the clause violates public policy or consumer-protection laws
- File motions to strike step-down provisions where appropriate, especially if they weren’t clearly disclosed at the time of policy purchase
Excessive Independent Medical Examinations (IMEs)
- What it looks like: The insurer schedules multiple IMEs with doctors they frequently use to deny or minimize injury claims.
- How to respond:
- Videotape the IME (when allowed) to document any procedural irregularities
- Prepare detailed rebuttal letters from your treating physicians
- Expose biased reporting patterns by highlighting how often these doctors side with insurers
- File objections or motions to limit IME abuse, especially if exams are redundant or irrelevant
When Does Bad Faith Enter the Picture?
If the insurer’s conduct crosses the line, such as unexplained delays, unjustified denials, failure to respond to communications, or willful disregard of medical evidence, you may be entitled to pursue a bad faith claim under New Jersey law. In a successful bad faith action, you could recover:
- Additional monetary damages beyond your original UM/UIM claim
- Attorneys’ fees and litigation costs
- Possible punitive damages for egregious misconduct
We monitor every UM/UIM claim we handle for signs of bad faith, and we’re prepared to escalate when the situation calls for it. Insurance companies must uphold their end of the bargain, and when they don’t, we hold them accountable.
Comparative Negligence & Other Rules That Affect Recovery
New Jersey’s modified comparative negligence system bars recovery only if you are 51 percent or more at fault. A claimant found 30 percent responsible sees the award reduced by 30 percent. Out-of-state policies are deemed to meet New Jersey’s compulsory insurance law when the accident happens here, but that “deemer” statute does not magically raise the out-of-state driver’s bodily-injury limits. Understanding these technicalities can spell the difference between an adequate recovery and an empty judgment.
How Can an Attorney Help With Your UM/UIM Claim?
Strategic Advocacy
- Policy decoding: We scour declarations pages and endorsements for hidden exclusions, deductible-savings provisions, and household-policy offsets.
- Evidence preservation: Rapid subpoenas for traffic-camera footage and 911 calls before they cycle off servers.
- Expert deployment: Accident reconstructionists, biomechanical engineers, life-care planners, and forensic economists.
- Negotiation leverage: A carrier that knows your lawyer has tried, and won, UM/UIM arbitrations is far less inclined to play hardball.
What Compensation May Be Available?
- Economic damages, past and future medical expenses, rehabilitation, prosthetics, lost wages, diminished earning capacity, and household-service replacement.
- Non-economic damages: physical pain, emotional distress, disfigurement, and loss of life’s pleasures.
- Wrongful-death and survivor damages, funeral costs and the financial as well as emotional void left by a loved one.
UM/UIM claims often travel with other negligence actions. Our team helps injured victims throughout the state of New Jersey pursue compensation in a number of other personal injury cases, including:
Call Lee Law Firm Today to Protect Your Rights
Time is of the essence after any accident, especially one involving an uninsured or underinsured driver. While you focus on recovery, the clock on vital legal deadlines keeps ticking. The sooner you act, the better your chances of preserving evidence, documenting injuries, and securing the full value of your claim.
At Lee Law Firm, we understand the frustration of being injured through no fault of your own, only to discover that the other driver lacks sufficient insurance. That’s why we step in with clear, strategic legal guidance, backed by over 30 years of experience and a Certified Civil Trial Attorney designation that only 2% of New Jersey attorneys earn. We’ve helped countless clients throughout the state recover the UM/UIM benefits they were promised and deserve.
Here’s what you can expect when you work with our firm:
- A free, no-obligation consultation to evaluate your case and insurance policy
- Direct access to an experienced attorney, not just a paralegal or intake coordinator
- Aggressive pursuit of full compensation, including litigation or arbitration when necessary
We don’t just help our clients file insurance claims; we help them fight back against delays, denials, and bad-faith tactics. Whether you’re dealing with a hit-and-run driver, a minimal policy limit, or a carrier that refuses to deal fairly, we’ll be your advocate every step of the way.
