Even if you're covered, uninsured and underinsured drivers still pose serious financial risks to insured drivers. Recent data from the Insurance Research Council (IRC) shows that in the event of an accident, there is a one in eight chance the driver is uninsured.

In some states, that number is one out of five.

Every state apart from New Hampshire, and the District of Columbia require drivers to have auto liability insurance to drive legally, but according to the IRC, the number of uninsured motorists is up for the first time in seven years, posing a serious threat to insured drivers.

In the event of an accident with an uninsured or underinsured driver, they may not have enough — or any — insurance coverage to pay for your medical bills if you are injured, or repair any damage to your vehicle.

Data shows that an estimated $2.6 billion was paid in uninsured motorist claims in 2012 according to the IRC. This high cost is one reason insurance premiums are on the rise across the country, The Hanover Insurance Group notes.

3 types of uninsured motorist coverage

Luckily, there are tactical ways to protect yourself from uninsured or underinsured motorists.

The Insurance Information Institute identifies three specific options for uninsured motorist coverage that may vary by state and insurer. In general, here are the three types of protection options available:

Uninsured Motorist (UM) insurance – Also known as Uninsured Motorist Bodily Injury (UMBI) insurance, this coverage will pay your and your passengers' medical bills if you're involved in an accident with an uninsured motorist who is at fault. In addition, UM insurance will reimburse you and your passengers for lost wages. UM coverage also kicks in if, as a pedestrian, you are hit by an uninsured driver, or if you're the victim of a hit-and-run accident.

Uninsured Motorist Property Damage (UMPD) coverage – Uninsured motorist insurance covers bodily injuries but not damage to your car or property. For this, you need UMPD coverage, which, in addition to paying for damages to your vehicle caused by an uninsured driver, generally also covers damage to other personal property such as your house or your fence. Ask your insurance professional or state insurance department whether UMPD coverage is available in your state.

Underinsured Motorist (UIM) protection – In some instances, an at-fault driver may have liability insurance, but his or her policy's limits do not cover the full extent of damage to your vehicle. In such cases, UIM insurance will cover the shortfall.

It all comes down to the price of piece of mind, which according to The Hanover Group, costs on average $67, or a little more than $5 a month for uninsured motorist coverage.

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3 ways to protect yourself from uninsured and underinsured motorists

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