Uninsured & Underinsured Motorists in California
In California, all drivers or owners of a vehicle must show financial responsibility in case of injury to other people or damage to property caused by their vehicle. Most people establish financial responsibility by buying auto liability insurance. By law, a driver or owner of a vehicle must maintain the following minimum bodily injury and property damage liability limits:
• $15,000 for the death or injury of any one person;
• $30,000 for the death or injury of more than one person in any one accident; and
• $5,000 for damage to the property of other people.
Although driving without insurance is illegal, many drivers in California remain uninsured. According to the Insurance Research Council, 16.6% of California motorists were uninsured in 2019. And even if a driver has insurance, most motorists carry only the minimum policy limits, which is often not enough to fully cover the needs of injured victims.
How do you protect yourself in the event you are injured in a serious accident with another motorist who carries only minimum liability coverage or no auto insurance whatsoever? A relatively inexpensive way is to purchase Uninsured/Underinsured Motorist coverage.
What Is Uninsured/Underinsured Motorist Coverage?
Uninsured Motorist Coverage (“UM”) and Underinsured Motorist Coverage (“UIM”) provides coverage if you are in an accident with a driver who does not have any liability insurance or is underinsured. Your auto insurance company must offer you this coverage, but this additional coverage is optional.
UM pays for injuries to you and any person in your car when there is an accident with an uninsured driver who is at fault. The minimum limits under UM must be at least $15,000 per person/$30,000 per accident for bodily injury or death. An insured can purchase more coverage above these limits. The purpose of UM is not to make all drivers whole from accidents with uninsured drivers, but to make sure they are protected to the extent that they would have been protected had the at-fault driver carried liability insurance.
UIM provides coverage for insureds where the other driver has liability insurance but with limits lower than the insured’s own UIM limits. This allows insureds to recover from their own insurer the difference between whatever is available from the negligent driver’s liability insurance and the insured’s own UIM limits. In effect, the purpose of UIM is to provide the insured with the same insurance protections he would have enjoyed had the at-fault driver carried liability limits equal to the insured’s underinsured motorist limits.
Depending on the UM/UIM policy, an insured can recover compensation for a range of losses, including (1) medical expenses; (2) lost income; (3) vehicle repair costs; and (4) pain and suffering.
How Does Uninsured/Underinsured Motorist Coverage Work?
Here are some examples of when UM/UIM coverage may or may not apply.
Driver A runs a red light and strikes Driver B’s car at an intersection. Driver B suffers bodily injuries and property damage. Driver B’s medical bills are at least $30,000. Driver B is also forced to take time off from work to obtain medical treatment, which causes her to lose at least $5,000 in wages.
Scenario 1 (Driver A has no insurance & Driver B has no UM/UIM)
Because Driver A does not have insurance and Driver B does not have UM/UIM, Driver B must get medical treatment through her own health insurance or pay out-of-pocket. Driver B can also sue Driver A for her total damages, but Driver A may not have sufficient assets to satisfy a judgment.
Scenario 2 (Driver A has no insurance & Driver B has UM/UIM coverage of 30/60)
Although Driver A does not have insurance, Driver B has UM. Driver B may be able to have her medical costs, property damage, lost income as well as compensation for pain and suffering covered by her UM/UIM policy. But any bodily injury coverage is likely limited to $30,000.
Scenario 3 (Driver A has a 15/30/5 Liability Coverage & Driver B has UM/UIM coverage of 30/60)
Fortunately, Driver A has liability insurance, but it is a minimum policy. But Driver B’s damages exceed Driver A’s policy limits. Because Driver B has UM/UIM coverage, she may be able to recover the full policy limits under Driver A’s policy and obtain additional compensation under her UM/UIM coverage, less the amount she recovers from Driver A’s policy. Thus, in this instance, Driver B can recover $15,000 from Driver A’s policy, and an additional $15,000 from Driver B’s own UM/UIM policy.
Why Should You Have Uninsured/Underinsured Motorist Coverage?
Even though California law does not require drivers to carry UM/UIM coverage, we believe such coverage is essential. Without this coverage, you may be responsible for paying expensive medical bills and other costs even though the accident was not your fault. As the saying goes, opting out of this additional coverage to reduce your auto insurance premium may be penny-wise and pound-foolish.
If you have been injured in an accident involving an uninsured or underinsured motorist, give us a call at (213) 468-8840. We’re here to fight for your recovery.
