What is Uninsured/Underinsured Motorist Coverage?

Uninsured/Underinsured Motorist Coverage is auto insurance that protects your restaurant when your vehicles are involved in accidents with drivers who have no insurance or insufficient insurance to fully cover the damages they caused.

What You Need to Know

Despite laws requiring auto insurance, approximately 13% of drivers nationally are uninsured (rates exceed 20% in some states), and many more carry only minimum liability limits that are inadequate for serious accidents.

Uninsured Motorist (UM) coverage pays for injuries and damages when an at-fault driver has no insurance. Underinsured Motorist (UIM) coverage applies when the at-fault driver has some insurance but not enough to cover all the damages.

For example, if your delivery driver is severely injured by a driver who has only $25,000 in coverage when medical bills total $150,000, your UIM coverage pays the additional $125,000 (after the at-fault driver’s insurance is exhausted). This coverage protects your employees, your vehicles, and your business from financially devastating accidents caused by inadequate insurance.

Why It Matters for Restaurant Owners

If your restaurant operates any vehicles—delivery cars, catering vans, or even if employees drive personal vehicles for business purposes—UM/UIM coverage is essential protection. Your delivery drivers are on the road constantly, making them statistically likely to encounter uninsured drivers.

A serious accident can result in hundreds of thousands in medical bills, lost wages, and vehicle damage. Without UM/UIM coverage, your business might be responsible for these costs.

The coverage is relatively inexpensive (typically $200-$600 annually depending on limits) and mandatory in many states. Purchase UM/UIM limits at least equal to your liability limits—if you carry $1M in auto liability, carry $1M in UM/UIM. This ensures you’re protected regardless of whether the other driver is properly insured.

Some policies allow you to reject UM/UIM in writing to save premium—this is almost always a mistake for businesses operating vehicles regularly. The small premium savings isn’t worth the enormous risk.