Shift Gears on Risk: Navigating UM/UIM Coverage White Paper
Shift Gears on Risk:
Navigate UM/UIM Coverage to Keep Your Fleet Safe and Your Premiums Low
February 2026
Introduction
Navigating risks in the transportation industry
can be challenging,
and one of those roadblocks is uninsured or underinsured motorists. In 2023, the Insurance Research Council (IRC) reported that 15.4% of U.S. drivers were uninsured, meaning that more than one in seven motorists nationwide lacked auto insurance coverage.3 When underinsured motorists are included, the IRC found that 33.4% of drivers were either uninsured or underinsured in 2023, underscoring that roughly one in three drivers lacked adequate financial responsibility to cover serious crash losses.6 At the state level, Ohio’s uninsured motorist rate was estimated at approximately 18.5%, which exceeds the national average and indicates that nearly one in five drivers on Ohio roadways were operating without required insurance.5
This rise in uninsured drivers contributes to higher insurance costs, which are ultimately passed on to insured drivers through increased premiums.3 For this reason, it is important to understand and manage Uninsured/ Underinsured Motorist (UM/UIM) coverage to help protect both drivers and businesses from unexpected expenses.
Key Takeaways
• Many fleets carry UM/UIM limits that increase cost without materially improving protection.
• In certain states, employees may pursue both workers’ compensation and UM/UIM recovery.
• Adjusting UM/UIM limits or structure can reduce exposure while maintaining compliance.
Understanding UM/UIM Coverage in Trucking
UM/UIM coverage is designed to protect drivers who are injured by motorists with no insurance (uninsured) or whose insurance limits are too low to cover the damage (underinsured).
It can cover medical bills and lost wages; vehicle damage is typically addressed through collision or UMPD, where available.
However, in commercial trucking, this coverage often overlaps with other existing protections and may do more harm than good.
There are a few factors to consider:
Workers’ Compensation or Occupational Accident Insurance
Most commercial drivers are already protected if injured on the job, making UM/UIM coverage redundant in many cases.
Physical Damage and Cargo Coverage
Damage to your tractors, trailers or cargo is typically covered by physical damage or cargo policies, not UM/UIM.
Impact on Auto Liability (AL) Loss History
Claims filed under UM/UIM can negatively affect your AL loss experience, potentially leading to higher premiums or less favorable renewal terms.
Due to these overlaps, some carriers may consider waiving or reducing UM/ UIM coverage to manage their costs. However, it is also important to be aware of these potential risks and regulations before doing so:
State Rules
Some states require UM/UIM coverage, so carriers must ensure compliance to avoid issues.
Accidents Outside Work
In certain situations, drivers may be able to claim against the carrier’s UM/UIM policy for accidents that happen outside of work, such as while on vacation.
Stacking Limits
In states that allow stacking, UM/UIM coverage can be stacked across multiple policies, which could end up costing more if a claim happens.
While understanding the scope and limitations of UM/UIM coverage is essential, it is equally important to examine how this coverage influences employer liability, claims, and insurance costs in real-world scenarios.
The Broader
Impact of UM/ UIM Claims on Employers
While workers’ compensation covers many workplace injuries, employees may also have claims in other circumstances, such as a negligent third party, faulty machinery and exposure to hazardous materials.1
Employees exposed to hazardous materials in the transportation industry may face serious risks.
The scenario below demonstrates how these principles could apply:
A Scenario:
Tom, a truck driver for ABC Trucking, is injured while making a delivery at a facility owned by DEF Corp when a DEF employee operating a company vehicle negligently strikes him.
While DEF is at fault, the state allows Tom to also pursue a claim against ABC Trucking’s UM/UIM coverage because it does not limit claims to workers’ compensation alone.
In recent national traffic data summaries:
• Over 5,000 large trucks were involved in fatal crashes annually in the most current period.4
• Approximately 110,000 injury crashes have involved large trucks in recent years.4
• An estimated 412,000 property-damageonly (towaway) crashes involved large trucks in the most recent data period.4
Of these incidents, the last published official hazardous materials cargo involvement percentages (3% of fatal crashes and 2% of injury/towaway crashes) are from the 2022 Federal Motor Carrier Safety Administration (FMCSA) Large Truck and Bus Crash Facts report, and updated hazmat crash breakdowns for 2023-2024 have not yet been published.4
It is important to understand how UM/UIM coverage can factor in these situations, especially in a nonexclusive remedy state. In these states, employees may be allowed to pursue both workers’ compensation and civil action against a negligent third party. These overlapping claims can affect how insurance is applied and even how future premiums are calculated.
What Happens to ABC Trucking with
Workers’ Compensation and UM/UIM Claims:
• Tom receives workers’ compensation for medical bills and lost wages.
• Because the state allows it, Tom also files a UM/UIM claim with ABC Trucking to get paid for things workers’ compensation doesn’t cover, such as pain and suffering.
Impact of Keeping Full UM/UIM Coverage for ABC Trucking:
• Higher Premiums: If ABC Trucking keeps UM/UIM coverage or has limits above the state minimum, insurance costs can rise because of a potential large payout risk.
• Effect on Auto Liability (AL) and General Liability (GL):
o AL: UM/UIM claims can make ABC Trucking’s accident history look worse, potentially raising AL insurance costs or limiting coverage options.
o GL: In some cases, claims can spill into GL coverage; for example, if Tom claims the company didn’t check the delivery site’s safety. High UM/UIM limits can encourage these crossover claims, which may affect GL premiums, too.
Why Limiting or Waiving UM/UIM Can Help:
• Lower potential high-cost claims, which could help keep insurance premiums more manageable.
• Simplify claims process by keeping coverage paths clear and focused.
When UM/UIM Cannot Be Waived:
Some states do not permit a full waiver of UM/ UIM coverage. In those jurisdictions, if limits are not affirmatively selected or reduced, UM/UIM coverage often defaults to the carrier’s Auto Liability bodily injury limits. To manage exposure and premium impact while remaining compliant, carriers may be able to elect UM/UIM limits equal to the state’s minimum bodily injury liability limits instead of matching higher Auto Liability limits. Coverage options and limit elections should always be reviewed in light of applicable state law.
Although coverage choices can have a significant impact on costs and risks, recent legal developments further complicate the overlap between UM/UIM claims and workers’ compensation.
Know the Risks: How Legal Trends Affect UM/UIM Claims
In recent years, workers’ compensation and plaintiff attorneys have requested UM/UIM policy limits and details in their claims and letters. The goal is to identify every possible source of recovery. This trend shows how handling claims has become more complex when both a worker’s own coverage and a third party’s insurance are involved.
A key case illustrating this is Klabon v. Travelers Insurance in 2024. The Colorado Supreme Court held that Klabon’s request for UIM benefits was not barred by Colorado’s workers’ compensation exclusivity clause. 2 The ruling clarified that when a third party— not the employer or co-employee— causes the injury, the employee can still pursue the employer’s UM/UIM, even if the employee already received workers’ compensation.
For motor carriers, this decision signals increased potential exposure. Carriers may face claims that seek recovery from both workers’ compensation and UM/UIM coverage, which increases the complexity of evaluating claims and potential payout. The case also highlights the importance of having well-structured policies and effective claim management strategies in place.
Planning for the Road Ahead
Proactive management of UM/UIM coverage can help reduce exposure to liability, control insurance costs, and protect employees in the event of accidents involving uninsured or underinsured drivers. A structured approach can also help carriers maximize the benefits of UM/UIM coverage.
Carriers can take the following steps:
• Clarify who’s covered: Limit who can claim UM/UIM benefits by clearly stating the covered individuals in your policies.
• Specify coverage triggers: Spell out the situations where UM/UIM applies.
• Prevent multiple claims: Insert antistacking clauses where necessary and appropriate.
• Review policy language: Ensure wording is clear to reduce the risk of improper access to UM/UIM funds.
Special Consideration: Structuring UM/UIM for Company Vehicles Used for Personal Travel
Coverage Objective
From a claims perspective, the starting point should always be the objective of the coverage. When a company-provided vehicle is used for personal travel, that use is typically outside the course and scope of employment, meaning workers’ compensation generally does not apply. If an accident occurs and the at-fault driver is uninsured, underinsured or liability is disputed, the injured employee may look to several potential sources of recovery.
In personal-use scenarios, health insurance is typically the first payer, with Medical Payments or Personal Injury Protection applying depending on the state. If the vehicle is company-provided, UM/UIM coverage under an auto policy may also come into play as a secondary source of recovery for bodily injury. From a claims standpoint, this means UM/UIM can be triggered even when the loss has no connection to day-to-day fleet operations.
Fleet vs. Business Auto Structuring
Payment Hierarchy in Personal Use
For motor carriers, how these vehicles are insured matters. As a best practice, vehicles used primarily for personal travel are often separated from the fleet Commercial Auto Liability program and insured under a distinct Business Auto Policy, while commercially used vehicles remain on the fleet policy. This structure allows motor carriers to limit or exclude UM/UIM for operational exposures, while maintaining more targeted UM/UIM protection for personal-use risks.
The goal in these situations is not to restrict recovery for the injured individual. Whether the person is an executive, a salesperson, or another key employee, carriers generally want that individual treated, compensated, and able to return to work. UM/UIM can serve a role in achieving that outcome when an uninsured or underinsured driver is at fault.
Balancing Recovery & Return to Work
Managing Limits & Long-Term Exposure
At the same time, high UM/UIM limits can create unintended consequences. UM/UIM claims are often evaluated alongside Auto Liability loss experience, and elevated limits can increase claim severity, expand discovery and affect renewal pricing. UM/UIM should serve as a safety net, not a primary injury solution.
When the objective is to provide that safety net, carriers may consider maintaining modest UM/UIM limits on a Business Auto Policy, sufficient to support recovery without unnecessarily increasing exposure. This approach helps balance care for valuable personnel with longterm cost control and protects the broader auto program from losses unrelated to core operations
Conclusion
In today’s transportation landscape, where uninsured and underinsured drivers remain a persistent challenge, careful management of UM/UIM coverage is essential.
By clarifying who is covered, limiting potential stacking and designing policies that reflect both operational and personal use, carriers can find the right balance between risk protection and cost efficiency.
The result is a safer, better-prepared company, one that is ready to navigate accidents, claims and legal disputes effectively.
Let’s Talk About This
Our brokers specialize in helping trucking companies reduce risk exposure, control insurance costs and build comprehensive coverage programs that protect your fleet, drivers and bottom line. From compliance challenges to rising premiums and effective loss control, Higginbotham can help you design a risk management program tailored to the unique demands of the trucking industry. Learn more at Higginbotham.com.
1. Cornell Law School Legal Information Institute. Workers’compensation. Retrieved March 11, 2026, from https://www.law.cornell.edu/wex/workers_compensation
2. Dilworth, S. (2024, October 1). InjuredworkercanseekUIMbenefitsfromemployer’s auto insurer . Business Insurance. https://www.businessinsurance.com/injured-workercan-seek-uim-benefits-from-employers-auto-insurer/
3. Facts + Statistics: Uninsured motorists. Insurance Information Institute. Retrieved December 22, 2025, from https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists
4. Federal Motor Carrier Safety Administration. (n.d.) LargeTruckandBusCrashFacts2022. FMCSA. https://www.fmcsa.dot.gov/safety/data-and-statistics/large-truck-and-bus-crash-facts-2022-1
5. Strady, B. (2025, November 14). The Unseen Risk: Uninsured Drivers on Ohio Roads. Rittegers Rittgers Nakajima. https://www.rittgers.com/blog/2025/11/the-unseen-risk-uninsured-drivers-on-ohio-roads/
6. Williams, T. (2025, February 20). IRCreportrevealsthatoneinthreedriverswereeitheruninsuredorunderinsuredin 2023. The Triple-I Blog. https://insuranceindustryblog.iii.org/irc-report-reveals-that-one-in-three-drivers-were-eitheruninsured-or-underinsured-in-2023/
