What Underinsured Motorist Coverage Does in South Carolina
Underinsured motorist coverage pays your medical bills and lost wages when another driver causes a crash but doesn't have enough insurance to cover your damages
In South Carolina, underinsured motorist (UIM) coverage fills the gap when the at-fault driver's liability insurance runs out. If you're hit by someone with $25,000 in coverage and your medical bills total $75,000, your UIM coverage pays the difference — up to your policy limit. This is different from uninsured motorist coverage, which covers crashes where the other driver has no insurance at all.
South Carolina does not require you to buy UIM coverage, but your insurance company must offer it. If you decline it in writing, the insurer keeps a record. Many drivers skip it to save money, then discover during a claim that the other driver's insurance was too low. Once you've declined UIM, you cannot add it back after a crash.
UIM coverage is relatively inexpensive — usually $10 to $30 per month depending on your age, driving record, and the coverage limit you choose. The cost is small compared to the protection it provides, especially if you have significant medical expenses or long-term injuries.
Key Takeaways
- Underinsured motorist coverage pays your medical bills and lost wages when the at-fault driver's insurance is insufficient, up to your policy limit.
- South Carolina does not require UIM coverage, but insurers must offer it, and you must decline it in writing if you choose not to buy it.
- You cannot add UIM coverage after a crash, so the decision to buy or decline it must be made when you purchase or renew your policy.
- Your UIM coverage limit should be at least as high as your liability limit so you have full protection in either direction.
- UIM coverage typically costs $10 to $30 per month and covers medical expenses, lost wages, and pain and suffering up to your policy limit.
How underinsured motorist coverage works in a claim
When you file a UIM claim, your insurance company first collects the at-fault driver's liability payment. If that payment does not cover your total damages, your UIM coverage kicks in for the remainder, up to your policy limit.
The process usually works like this: you report the crash to your insurer and provide medical records, repair estimates, and proof of lost wages. Your insurer investigates the other driver's insurance limits and the extent of your damages. If the other driver's liability coverage is lower than your damages, your insurer calculates what UIM owes you. Most claims settle within 30 to 90 days, though complex cases with serious injuries can take longer.
You do not have to sue the other driver to collect UIM benefits. Your own insurance company pays the claim directly. However, if you and your insurer disagree about the value of your damages, you may have the right to demand arbitration or go to court — your policy spells out which applies.
Choosing the right UIM coverage limit
Your UIM limit is the maximum your insurance will pay toward your damages. South Carolina law does not set a minimum, so insurers offer a range — commonly $25,000, $50,000, $100,000, or higher. The limit you choose should reflect the value of your car and your potential medical expenses.
A common strategy is to match your UIM limit to your liability limit. If you carry $100,000 in liability coverage, buying $100,000 in UIM coverage means you have the same protection whether you hit someone or someone hits you. This symmetry is especially important if you have significant assets to protect or if you drive frequently on highways where high-speed crashes are more likely.
If you have an older car worth $8,000 and minimal medical history, a $25,000 UIM limit may be sufficient. If you have a newer vehicle, drive long distances, or have a family in the car regularly, a higher limit — $50,000 or more — provides better protection. Your insurance agent can help you estimate what limit makes sense for your situation.
The difference between UIM and uninsured motorist coverage
Uninsured motorist (UM) coverage applies when the other driver has no insurance at all. Underinsured motorist (UIM) coverage applies when the other driver has insurance but not enough. Both are optional in South Carolina, and both must be offered by your insurer.
Many drivers buy both UM and UIM together, often with the same limit. If you decline one, you must decline both in writing. Some insurers bundle them into a single "uninsured and underinsured motorist" policy, while others sell them separately. Ask your agent which approach your policy uses.
UM coverage is slightly more common than UIM because uninsured drivers are more visible — you know immediately that someone has no insurance. Underinsured drivers are harder to spot; you may not discover the problem until after the crash when you file a claim and learn the other driver's limit is too low.
When UIM coverage does not apply
UIM coverage does not pay if you cause the crash yourself or if you hit an uninsured driver (that is what UM coverage is for). It also does not apply to damage to your car — that is covered by collision insurance. UIM covers your medical bills, lost wages, and pain and suffering, not vehicle repair.
If you are hit by a hit-and-run driver with no identifiable insurance, your UM coverage applies, not UIM. You will need to report the crash to police and file a police report to prove the other driver was uninsured.
UIM also does not cover punitive damages or attorney fees in South Carolina, though your policy may allow you to recover attorney fees if you go to arbitration or court. Read your policy language carefully or ask your agent what is and is not covered.
Stacking and how it affects your payout
Stacking is the practice of combining UIM coverage limits across multiple vehicles or policies to increase your total payout. South Carolina law allows stacking in some situations, which can significantly increase the amount your insurer pays.
For example, if you own two cars and each has $50,000 in UIM coverage, you may be able to stack them to reach $100,000 in total UIM protection for a single crash. However, stacking rules vary by insurer and depend on how your policies are written. Some insurers allow stacking across vehicles on the same policy; others do not. Some allow stacking across multiple policies; others prohibit it.
Ask your insurance agent whether your policy allows stacking and, if so, whether you want it. Stacking increases your premium slightly but can make a real difference if you are seriously injured. If you own multiple vehicles, clarify this point before you buy or renew coverage.
What happens if you decline UIM coverage
If you decide not to buy UIM coverage, your insurer will ask you to sign a form declining it. Keep a copy of that form. Once you decline, you cannot add UIM coverage back unless you go through a new application process, and some insurers may require you to explain why you want it after declining it earlier.
More importantly, if you are hit by an underinsured driver after declining UIM, you have no coverage for damages beyond what the other driver's insurance pays. You would have to sue the other driver personally to recover the difference, which is expensive, time-consuming, and often unsuccessful if the driver has few assets.
Declining UIM to save $15 or $20 per month can cost you tens of thousands of dollars if you are seriously injured. Most insurance professionals recommend buying it unless you are certain you will never need it.
Frequently Asked Questions
Does South Carolina require underinsured motorist coverage?
No. South Carolina requires liability insurance but not UIM coverage. However, your insurer must offer it to you, and you must decline it in writing if you choose not to buy it.
Can I add UIM coverage after a crash?
No. You must choose to buy or decline UIM coverage when you purchase or renew your policy. Once you decline it, you cannot add it back without going through a new application, and some insurers may deny the request or require an explanation.
What is the average cost of underinsured motorist coverage in South Carolina?
Cost varies by age, driving record, vehicle type, and coverage limit, but UIM coverage typically costs $10 to $30 per month. Ask your insurer for a quote based on your specific situation.
If I have health insurance, do I still need UIM coverage?
Yes. Health insurance covers medical bills but usually does not cover lost wages or pain and suffering from a car crash. UIM coverage fills those gaps and can also cover costs your health insurance does not pay, like deductibles and copays.
What if the other driver's insurance company disputes their liability?
Your UIM coverage still applies if the other driver's insurance is insufficient, regardless of who is found at fault. However, if liability is disputed, your claim may take longer to settle while the investigation continues.