Do I Need Uninsured Motorist Insurance Coverage?
About one in eight drivers don’t carry car insurance, according to a 2021 report from the Insurance Research Council. And what happens if you’re injured in a car crash caused by a driver who doesn’t carry liability car insurance? You can be stuck with some hefty out-of-pocket expenses like medical bills and health insurance deductibles. If your injuries cause you to miss work, you can also lose valuable wages.
Fortunately, there are car insurance coverage types that alleviate this problem: Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage is optional insurance coverage that can be added to an auto insurance policy in California. UM coverage pays when another driver is at fault but either no insurance at all. UIM coverage pays for your losses when an at-fault driver has insurance but does not carry enough insurance to cover your medical bills and other expenses.
Uninsured motorist coverage can pay for:
Medical bills
Lost wages if you can’t work because of the car accident
Pain and suffering compensation
Funeral expenses
California law requires auto insurers to offer UM/UIM coverage, but it is not mandatory for California drivers to purchase it, and you may decline it altogether. However, because the minimum insurance limits in California are so low, it is a good idea to purchase uninsured/underinsured motorist coverage to ensure you are protected when you are the victim of an accident with an uninsured or underinsured driver.
What is Underinsured Motorist Coverage?
Even when California drivers do purchase auto insurance, they often select coverage at the bare minimum amount required by law. The minimum insurance coverage required by California law is:
$15,000 for bodily injury or death per person
$30,000 for total bodily injury or death per accident (for all the people in a vehicle combined)
$5,000 for property damage to other vehicles
This means that even when a driver is at fault, their insurance will pay no more than the amounts listed above to the victim of the accident. Any amount of damage and injury above the insurance amount must be paid directly by the driver. However, many drivers, especially those with limited insurance coverage, cannot afford to pay damages out-of-pocket, leaving you financially responsible for harm someone else caused you. These insurance minimums are abysmally low, and even a minor collision or fender bender can result in property damage and bodily injury that exceeds these limited coverage amounts. These low coverage amounts are totally inadequate when there are multiple occupants in your vehicle with serious injuries. Because of this, you should consider purchasing UM/UIM coverage
How Does Underinsured Motorist Coverage Work?
UIM pays you the difference between the at-fault driver’s insurance coverage and the amount of injuries and damages you have suffered, up to the policy amount you have purchased.
For example, let’s say you are driving on the 5 Freeway when you are rear ended by another driver. The other driver only purchased the minimum $15,000/$30,000 insurance required by California. However, because he rear ended you at top speed, you have seriously injured your back and you need spine surgery and physical therapy, which will cost approximately $140,000. Of course, the person that rear ended you cannot afford to pay you an additional $125,000 to cover your surgery.
If you don’t purchase UIM insurance, you would, unfortunately, be responsible for coming up with the additional $125,000 for your surgery. But let’s say that you did purchase UIM insurance, and you purchased a $150,000 policy because you want to ensure you and your family are protected. Once the at-fault driver’s insurance pays you $15,000, your own UIM insurance would make up the difference by paying you the remaining $125,000.
Why Can’t I Just Use My Health Insurance?
Private health plans and Medicare or Medi-Cal will pay your medical expenses after an accident. However, many health plans have staggeringly high deductibles and co-pays, and often don’t cover the therapeutic treatment you need to recover from a serious accident. So, even if you have health insurance, you still may end up with thousands of dollars in medical expenses from co-pays and out-of-network treatment.
Additionally, your health insurance will not pay to repair your damaged vehicle, nor will it compensate you for the amount of wages you lost because you had to take time off from work. UIM coverage does.
How Do I Bring a Claim?
Once you’ve had an accident, it is critical to notify your insurance company regardless of whose fault it is.
California law also requires you to file a Form SR-1 Accident Report anytime you are involved in an accident in which anyone is injured or the vehicle damages are in excess of $1,000.
Once you notify your insurance company, the insurer will evaluate the police report, witness statements, photographs and any other documentation you have provided to determine who was at fault for the accident. Your insurance will then pursue the claim against the at-fault driver’s insurance and compensate you accordingly.
If you disagree with your insurance company’s evaluation and payment amount, you can file a lawsuit to challenge it.
Have You or a Loved One Been Injured by an Uninsured or Underinsured Driver?
If you or someone you know has been injured in a collision by an uninsured or underinsured driver, contact us for a free consultation and to discuss your legal options against the other driver and the insurance companies. You may be awarded more compensation than the insurance company is currently providing you.
