Uninsured Motorist Coverage in California: What is it and why is it important?

Of all the insurance coverages on your California auto insurance policy uninsured/underinsured motorist coverage is the most critical. Since vehicles can be sold without an insurance policy in place to protect those who may be injured, by such a conveyance, or insured for minimal limits and/or inadequate limits, it is vital that there be some way to assure that victims of such an event have some recourse.  These instances are when the “uninsured/underinsured motorist coverage” on your auto insurance policy comes into play. 

“Uninsured/underinsured motorist bodily injury liability coverage” must be included in all auto insurance policies, unless the “named insured” rejects the coverage in writing. Minimum limits in California are $15,000 for any one person and $30,000 for any one “crash”. 

It is highly inadvisable to waive your “uninsured/underinsured motorist bodily injury liability coverage”, since this coverage protects you, your family and guests riding in your vehicle.  If you review the cost of the coverages on your auto insurance policy, you will notice that the cost is lower, than the same amount in coverage limits, for auto liability bodily injury coverage.

“Uninsured/underinsured motorist coverage” is unusual, in that it is a “first party” coverage (i.e. applying to the parties for whom the policy is written) and simultaneously is “fault based” (i.e. only applies if an uninsured/underinsured vehicle driver is at fault).  The policy limits for the “uninsured/underinsured motorist bodily injury coverage”, usually mirror the auto liability bodily injury coverage on the policy.

Coverage applies to the “named insured”, family members, and/or persons given permission to drive the vehicle/vehicles on the policy, as well as any guest occupants of these vehicle/vehicles. If an insured, or member of the family, is struck as a pedestrian, this coverage also applies.  There is even coverage, if a pedestrian or an insured vehicle, is struck by a “hit and run” vehicle.

“Underinsured motorist bodily injury coverage” only applies if the auto liability bodily injury limits on the responsible party’s vehicle are lower than the UIMBI limits on your policy.

There are two parts to “uninsured/underinsured motorist coverage”.  Part one is a “bodily injury” component and part two covers “car damage”.  Part two is not mandatory coverage.  Furthermore you would only purchase uninsured motorist property damage for a vehicle which is not insured for collision coverage.  All other vehicles would only be eligible for the UMPD collision damage waiver.

Under part number one; if there is an injury due to an uninsured vehicle, the lack of insurance must first be verified, for a claim to be paid.  If the injury is due to a “hit and run” vehicle a police report must be filed, to document the occurrence.  A vehicle which is insured, via a bond placed with the Department of Motor Vehicles of the owner’s state, instead of an insurance policy, is not “uninsured”.  In California depositing $35,000 in cash with the DMV is also a method of “insuring” a vehicle.

If a vehicle or driver is ”underinsured” it must be verified that the automobile liability coverage on the responsible party’s vehicle is not enough to cover the full amount of the claim.  At that point the insurance coverage of your policy comes into play. Insurance follows the vehicle, however if the owner of the responsible vehicle is not insured and the responsible driver is, the driver’s insurance policy must respond to a auto bodily injury claim, before a “uninsured motorist claim” is made.  Your policy will not pay for amounts also paid by another insurance policy.

In addition, if a workers compensation or disability benefits claim applies your policy will not respond. Under part number two;  coverage applies only to auto physical damage caused by a crash.  If your vehicle is insured for collision coverage, this coverage only waives the deductible.  However, if you have not insured the vehicle for collision coverage, the “uninsured/underinsured motorist car damage coverage” is limited to the fair market cash value of the vehicle, up to a limit of $3,500.

Due to the highly contentious nature of “uninsured/underinsured motorist coverage”, there often is an arbitration provision built into the coverage provisions of this section of the policy. This means that if a dispute arises the policyholder can not sue his/her insurance carrier in court but, can demand arbitration of the claim with his insurance carrier.  An arbitration is a legal proceeding heard by a neutral third party who is usually a retired judge or attorney that can decide what the claim is worth and award damages to the injured party.

There are many scenarios which can occur in an “uninsured or underinsured motorist claim”, that are so complex that extrapolations would be difficult to provide in advance.  If involved in an “uninsured or underinsured motorist claim”, reading through the provisions of this section of the policy with your particular circumstances in mind, will give you the best answers on the applicability of coverage.  Reviewing this with an experience California personal injury attorney familiar with uninsured motorists claims and the arbitration process is the best way to determine what your rights are for recovery on your uninsured motorist coverage.