Roughly one in ten New Jersey drivers is uninsured, and many more carry a Basic policy with no bodily injury coverage at all. If one of them hits you, the driver’s insurance is not going to pay for your injuries. Your own uninsured and underinsured motorist coverage is.
This guide explains how UM and UIM coverage works in New Jersey, what it pays, the hit-and-run rules, and the procedural trap that forfeits more UIM claims than any other mistake.
UM vs. UIM: the difference
Uninsured motorist (UM) coverage pays for your injuries when the at-fault driver has no liability insurance, or when the crash was a hit-and-run and the driver was never identified.
Underinsured motorist (UIM) coverage pays when the at-fault driver has liability insurance, but their limits are lower than your UIM limits and your damages exceed what their policy pays.
Both are governed by N.J.S.A. 17:28-1.1. Both step in only for your claim against the at-fault driver. Your medical bills are still paid first by your PIP; see our guide to New Jersey PIP coverage.
What New Jersey requires
- Standard policy: UM coverage is mandatory at the state minimum limits (currently $35,000/$70,000 bodily injury and $25,000 property damage following P.L. 2022 c.90, as explained in our post on New Jersey’s new minimum limits). UIM is optional and can be purchased up to your liability limits, but not above them.
- Basic policy: UM/UIM coverage is not available. If you carry a Basic policy and are hit by an uninsured driver, you have no coverage for your injuries beyond PIP.
How UIM actually pays: the step-down
UIM is not stacked on top of the at-fault driver’s coverage. It fills the gap between the at-fault driver’s limits and your UIM limits. Example:
- Your damages: $200,000
- At-fault driver’s liability limit: $35,000
- Your UIM limit: $100,000
- You recover $35,000 from the at-fault driver’s carrier, then up to $65,000 from your own UIM ($100,000 minus the $35,000 already paid). Total: $100,000.
If your UIM limit had been $35,000, matching the at-fault driver’s, you would recover nothing from UIM, because the driver is not “underinsured” relative to your coverage. This is why matching your UIM to your liability limits matters.
The verbal threshold still applies
A UM/UIM claim is treated as a claim against the at-fault driver, so if your policy carries the Limitation on Lawsuit option, you must still clear the verbal threshold to recover for pain and suffering. And your own carrier, which pays the UM/UIM claim, has every incentive to contest that threshold. Expect your own insurer to behave like an adversary.
Hit-and-run crashes
UM coverage applies to hit-and-run crashes, including phantom vehicle cases where there was no physical contact, but New Jersey imposes conditions. You generally must report the crash to police promptly and notify your carrier within the time required by your policy, and the carrier may require corroborating evidence beyond your own account. Preserving dashcam footage, identifying witnesses, and filing the police report immediately are essential.
The Longworth trap
This is where UIM claims die. Under Longworth v. Van Houten, 223 N.J. Super. 174 (App. Div. 1988), before you accept a settlement from the at-fault driver’s carrier, you must notify your own UIM carrier of the proposed settlement. Your carrier then has the option to pay you the settlement amount itself and preserve its right to pursue the at-fault driver. If you settle and sign a release without giving that notice, you can forfeit the UIM claim entirely.
The at-fault carrier will often tender policy limits quickly in a minimum-limits case, precisely because a fast release can eliminate the UIM exposure. Never sign one without counsel.
Other policies that may apply
UM/UIM can be available under more than one policy: your own, a resident relative’s, or the policy on the vehicle you were riding in. Anti-stacking rules and “other insurance” clauses limit how these combine, but identifying every potentially applicable policy is a required step in a serious injury case. Rideshare crashes involve their own coverage layers under the TNC Act; see our rideshare accident practice page.
How Ibrahim Personal Injury Law handles UM/UIM claims
We identify every available policy at intake, send Longworth notices before any settlement, and litigate the UM/UIM claim against your own carrier with the same posture we take against an at-fault driver’s insurer, including the threshold fight and any arbitration the policy requires.
Free consultation, contingency fee. Call (844) 315-4878 or contact us online.
Frequently asked questions
Is uninsured motorist coverage required in New Jersey?
Yes, on Standard policies, at the state minimum limits. It is not available on Basic policies.
Will a UM/UIM claim raise my premium?
New Jersey regulations restrict surcharges for claims where you were not at fault, but check with your carrier and agent.
Can I make a UM claim as a pedestrian?
Yes, under your own policy or a resident relative’s policy, if the driver who hit you was uninsured or fled.
Does UIM cover the difference in every case?
Only if your UIM limit exceeds the at-fault driver’s liability limit. If they are equal, UIM pays nothing.
