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Under-Insured And Uninsured Motorist Coverage In California

California law provides its motorists the advantage of under-insured/uninsured motorist coverage, but few know about this insurance cover. Here is all the information about what is underinsured motorist coverage and uninsured motorist coverage. We will also see what they cover and when coverage kicks in, and how an accident attorney can help you.

As stated by a 2021 study conducted by the Insurance Research Council (IRC), one in eight drivers is uninsured. Approximately 16.6% of California motorists are uninsured. That is quite discouraging, given that California is a nationwide leader in auto accident statistics. California accidents leave thousands of people with life-altering injuries and the devastating loss of loved ones every year.

Sadly, the loss is worse when the offender does not have insurance, and the victim or their family cannot claim their entitled compensation. That’s where under-insured/uninsured motorist coverage can help.

Under-insured and uninsured motorist coverage

According to California law, all drivers must maintain minimum liability insurance of 15/30/5. That means an insured person who is also the at-fault driver in a motor vehicle accident will pay the injured party:

·        Up to $15,000 for bodily injury or death of one person.

·        A total of $30,000 for bodily injury or death for each accident to 2 or more people involved in the accident. The injured people will share the $30,000.

·        $5,000 for collision with the other vehicle and for damage to any property (objects or

structures) that your car hits.

Unfortunately, not every California motorist can afford to pay the premiums for this liability

insurance. As a result, the government and other health insurers must pay for the medical expenses and all other damages associated with car accidents. California law has made it mandatory for all insurers to offer California drivers the option to purchase coverage for any accident caused by an uninsured or under-insured driver. That eases the burden on the state and health insurers.

What is under-insured motorist coverage?

As mentioned above, the minimum liability insurance that motor vehicle drivers must carry is 15/30/5. However, companies can offer liability insurance plans as high as $100,000 per injured person and $300,000 for total bodily injury per accident.

Still, most drivers prefer to go with the cheapest insurance plans. So, if an insured person causes an accident, you (the injured party) can only claim what the plan covers. Often, that does not cover all the medical expenses and damages.

Under-insured motorist coverage considers the at-fault driver as uninsured for damages that

exceed their policy limits, up to the policy limit of your under-insured motorist coverage.

Under-insured motorist (UIM) coverage is optional insurance coverage you can add to your motor vehicle insurance policy. The coverage pays when a driver at fault in an accident does not carry enough insurance on their insurance plan to cover the total amount of your financial losses.

What is uninsured motorist coverage?

Uninsured motorist (UM) coverage pays you when the driver at fault is not insured and cannot pay for the damages and medical bills. That way, you are not left to pay hefty medical bills and other costs.

By law, all California auto insurers must offer uninsured and under-insured coverage to collect damages against uninsured/under-insured motorists. However, it is not mandatory for motor vehicle drivers to purchase these coverages. If you choose not to buy this coverage, you must sign a waiver that says you were offered UM and UIM coverage but turned it down.

What is the minimum UM and UIM amount in California?

The UM and UIM minimum coverages in California is as follows:

·        $30,000 for every injured person.

·        $60,000 for two or more injured people per accident (for each accident).

According to California law, no insurance company can offer less coverage or less protection than what is provided by California’s uninsured motorist and under insured motorist statutes.

An exception to the rule

According to California law, you can invest in a lower UM or UIM if you give a written agreement. However, even with a written agreement, the UM or UIM limit cannot be lesser than:

·        $15,000 for every injured person.

·        $30,000 for two or more persons per accident (for each accident).

What do UM and UIM insurance cover?

Here are some specific damages that you can recover with UM or UIM coverage.

·        Medical expenses

·        Property damage, including vehicle repair bills and damage to other property

·        The cost of a rental vehicle

·        Lost income

·        Mental and emotional distress

·        Lost quality of life

How does under-insured and uninsured motorist coverage work – some examples to understand

uninsured person in car accident

In each of the examples below, we will assume that: Kelly is a negligent driver who rams into a car driven by Jim. Jim sustains a severe neck injury and multiple fractures. His car is damaged as well. Because of the accident, Jim is unable to go to work for two months. The costs resulting from the accident are as follows:

·        Medical bills: $50,000.

·        Missed work for eight weeks: $15,000.

·        The cost to repair the vehicle: $10,000.

Jim has had to shell out a total of $75,000, and this does not include the pain and suffering damages that he is eligible to receive. 

Example 1: Kelly and Jim are not insured.

Jim can sue Kelly, but Kelly might not be in a position to pay Jim.

If Jim has private health insurance, his insurance company will cover the $50,000 he spent on medical bills. However, he will be responsible for his co-pays and deductibles. He might also be entitled to some employment benefits and California disability insurance. However, without auto insurance, he will not get any money for vehicle repair.

Example 2: Kelly has invested in the minimum 15/30/5 liability insurance coverage

With the 15/30/5 coverage, the maximum that Kelly’s insurance will pay for any one person in an accident is $15,000. So, Jim will only get that $15,000. 

(This would also be the case if Kelly’s liability limit were any other amount less than $75,000 per person).

Example 3: Kelly has 100/300/25 liability coverage

By far, this is the best scenario because Kelly’s plan pays $100,000 per person. She has enough insurance to cover the $75,000 that Jim had to pay for his medical bills, loss of work, and vehicle repair. There is also enough to pay for Jim’s pain and suffering.

Example 4: Kelly does not have car insurance, but Jim has UM coverage

Kelly is an uninsured driver, but Jim has uninsured motorist coverage. That means Jim can collect up to the limit of his policy from his insurer. For example, if he has the minimum 15/30/5 coverage, he can collect $15,000 for injures and $5,000 for property damage.

If Jim has higher limits, then he can collect more from his insurer.  

Example 5: Kelly has liability insurance to cover only $15,000, and Jim has Under-Insurance motorist Coverage for $30,000.

In this case, Jim will get the maximum amount possible from Kelly’s insurance. He can claim the balance against his insurance provider, up to his policy’s coverage limit. So, in this case, Jim can claim $15,000 from Kelly’s liability insurance and another $15,000 from his UIM coverage for a total of $30,000.

Also, note that Jim cannot request more than the actual cost he had as a direct result of the accident

($75,000).

When does uninsured and under-insured motorist coverage protect you?

When discussing what underinsured motorist coverage is, you naturally want to know who is protected by UM or UIM coverage. Protection is extended to you (the insured person) in several instances and is not limited to whether you were the occupant of your insured vehicle. That means UM and UIM coverage protects you even when you are:

·        Injured when riding a bicycle or motorcycle.

·        Sitting on a bench when hit.

·        Injured while walking in a crosswalk (while you were a pedestrian).

UM and UIM coverage protection applies to all family members living in your

household if:

·        They were injured while they were passengers in some else’s car.

·        They were Injured when riding a bicycle or motorcycle.

·        They were sitting on a bench when hit.

·        They were injured while they are a pedestrian.

UM and UIM coverage limitations for friends and non-household relatives.

do you have car insurance in CA?

UM and UIM coverage protects non-household relatives and anyone else traveling in an insured motor vehicle when the accident with an uninsured at-fault driver. However, they can claim only if they were getting in or out of the insured vehicle when the accident occurred.

Example one: You have UM coverage. Your child and you are riding your bikes together when an

uninsured driver hits you both. Both your child and you are covered under the UM coverage of your motor vehicle insurance.

Example two: You have UM coverage. You have a friend who does not have UM coverage. Your friend and you are riding together when an uninsured driver hits your vehicle.  Only you can claim with your UM coverage. 

Example three: You have UM coverage. Your friend has their own UM coverage. Your friend and you are riding together when an uninsured driver hits your vehicle. You can claim with your UM coverage, while your friend claims under his UM coverage.

How to trigger uninsured motorist coverage

Please take the following steps to trigger the under-insured motorist coverage of your motor vehicle insurance plan.

1.      Get a police report that documents the accident and mentions that the accident was the fault of the under-insured motorist. The report must also note that the at-fault driver did not provide proof of insurance to the responding officer.

2.      Open a claim with your motor vehicle insurance company.

3.      Your motor vehicle insurance company conducts a verification process to certify that

the at-fault driver is uninsured.

4.      Your motor vehicle insurance company offers a claim settlement (including medical bills, any lost wages, property damage, pain and suffering, any kind of monetary loss related to the accident).

How to trigger under-insured motorist coverage

Simply investing in and understanding what is underinsured motorist coverage is not enough. You must take the following steps to kick in your under-insured motorist coverage part of your motor vehicle insurance.

1.      File a personal injury claim with the at-fault motorist’s insurance company promptly. The insurance company accepts liability (accepts that their motorist was at fault).

2.      The at-fault driver’s insurance company pays you their motorist’s po licy limits. Please

note that the company is not required to pay you more than their driver’s policy limit.

3.      The at-fault driver’s insurance does not cover your bills. So you file a UIM coverage claim with your insurance company.

4.      Your auto insurance company verifies the payment of the at-fault driver’s auto insurance policy limits. 

5.      Your auto insurance company ascertains your claim’s value and will offer a settlement for the amount over and above the at-fault driver’s policy limit.

Why you should hire a personal injury attorney to fight your UIM/UM coverage

Collecting UIM claims are a tricky and challenging undertaking and rarely occurs without a legal battle. Most insurance companies refuse to offer a fair settlement without a fight. If the at-fault driver’s insurance company refuses to settle, you will be forced to sue the driver, take him to trial, and collect the policy limit. If legal action is required, you must obtain proper legal representation.

Your case will have to go to trial, where a jury will determine your claim’s validity and fair value. In short, you cannot do this alone. You will need a personal injury attorney who understands the ins and outs of UIM/UM coverage. They must be patient and persistent with your case and be able to convince a jury that the amount you claim for personal injury is fair. 

So Now You Know The Differences Between UIM and UM

So there you have it – everything related to your question: what is underinsured motorist coverage and uninsured motorist coverage? UIM and UM are both optional coverage’s. however, they are critical protection against the thousands of underinsured and uninsured drivers who still ply their vehicles in the State of California.

UM and UIM are both valuable add-on coverages to your existing motor vehicle insurance to protect you from financial loss. A higher coverage does not involve a drastic increase in premium. So be wise when choosing a level of coverage: It can provide you with meaningful benefits.

Finally, keep in mind that it takes time and effort to negotiate with insurance companies (in UIM and UM coverage) to get a fair settlement. So don’t hesitate to hire a reliable personal injury attorney to ensure you get the best possible claim amount.

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