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Uninsured and Underinsured Motorist Coverage: The Basics

Posted by Justin R. Wilmers | May 24, 2022 | 0 Comments

Despite the many wonders the great state of California offers its residents, the Golden State continues to have a relatively high percentage of uninsured motorists. In fact, according to the Insurance Information Institute, in 2019 California ranked tenth in the country for the highest percentage of uninsured motorists with approximately 16.6% of its motorists being uninsured. Fortunately, you still may be able to recover money when a uninsured or underinsured motorist injures you in a car accident. 

California law requires all motorists to maintain minimum automobile coverage limits of $15k/$30k/$5k, though motorists can obtain more coverage such as $50k/$100k by paying higher premiums. Recall, if you fail to maintain the minimum automobile coverage, you may be limited in any recovery even if the other driver is completely at fault for causing the accident. (See here). Otherwise, the minimum coverage required by California law will pay a maximum of $15,000 for bodily injury/death of one person, $30,000 for bodily injury/death per accident (if more than one person is in the vehicle) and $5,000 for property damage per accident. Thus, if you are injured in a car accident that is the other driver's fault, the above limits are the maximum recovery you can obtain from the at-fault driver's insurance. But what if your damages (i.e. medical bills, lost wages, pain and suffering, etc.) are more than the at-fault driver's coverage? 

Uninsured/Underinsured Motorist Coverage (UM/UIM) in California

California law requires insurance companies to offer optional UM/UIM coverage to all California motorists. Unlike a third-party insurance claim where the injured driver makes a claim against the at-fault driver's insurance, UM/UIM is insurance held by the injured driver and recovery is sought by making a first-party claim against their own insurance carrier. The following two scenarios illustrate the differences between UM and UIM. 

Situation 1: Uninsured Motorist Coverage

Let's say Todd is hit by another driver, Jo and Jo is completely at fault for the accident. As a result of the car accident, Todd has $25,000 in medical expenses. Jo, as an irresponsible Californian does not maintain any automobile insurance as required by California law and has little to no personal assets. Todd, as a wise Californian purchased optional uninsured motorist coverage (UM) through his own insurance with limits of $50k/$100k. In this situation, Todd can make a claim with his own insurance company by virtue of his UM coverage and can recover his medical expenses in the amount of $25,000 and also recover a portion of his pain and suffering up to the limits of his UM policy per person - $50,000. Todd is happy now because he purchased his UM coverage and has been made whole by his own insurance.

Situation 2: Underinsured Motorist Coverage

Now, let's say after his first accident, Jo wised up and bought the minimum amount of coverage as required by California law - $15k/$30k/$5k. Kaylee, another wise Californian, purchased underinsured motorist coverage (UIM) with limits of $50k/$100k. Jo, as the irresponsible driver he is, causes another accident, this time with Kaylee. Kaylee is seriously injured and has $50,000 in medical expenses as a result of the accident. In this situation, Kaylee will be able to recover $15,000 from Jo's insurance and make a first-party claim with her UIM insurance for the remaining $35,000 in medical expenses and have $15,000 left of her UIM coverage for any pain and suffering. Kaylee is happy that she purchased UIM coverage. Jo is no longer driving in California as he likely had his driver's license revoked due to his bad driving record. 

Thus, UM/UIM allows California motorists to account for the irresponsible uninsured and underinsured Jo's of the world by purchasing additional coverage should you be injured in a car accident through no fault of your own. However, while the examples above are a simplified illustration, recovering the maximum amount you are entitled to can be difficult. If you are injured in a car accident by a driver that is either uninsured or underinsured, Miller Wilmers, APC remains ready to assist you in recovering every penny you are entitled to. 

About the Author

Justin R. Wilmers

Justin R. Wilmers is the co-founder of Miller Wilmers, APC and former collegiate ice hockey national champion.


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