What is Underinsured or Uninsured Motorist Coverage?
The very first thing we need to understand is what underinsured motorist coverage essentially is.
Underinsured or uninsured motorist coverage is an insurance protection policy that helps you in covering any medical bills, cost of vehicle repairs, or even buying a new vehicle. It is only applied in the circumstance that an uninsured or underinsured motorist crashes onto you on the road.
But what are uninsured or underinsured motorists?
Well, an uninsured driver is someone who hits the road without any car insurance policy. He may also have insurance coverage that doesn’t meet the minimum, state-mandated liability requirements, making it nearly useless. A motorist is also considered uninsured if their insurance firm denies their claim for whatever reason or cannot financially pay for the claims you make.
Hit and run drivers also come under uninsured motorist coverage related to bodily damage, and you can’t make claims for their insurance company to consider. However, these cases don’t generally qualify for property damage, so you will be in charge of covering any vehicle repair costs.
On the other hand, underinsured motorists coverage is an insurance protection policy that helps you cover the costs of expensive medical bills or repairing any damage caused to your vehicle by a driver who admits to his fault. However, he generally has an insurance coverage limit that is way too low to cover the expenses you expect to incur.
Underinsured motorists usually opt for the cheapest possible auto insurance policy as required by law, an amount that isn’t all too much in San Francisco, California. Californian drivers are only required to carry liability coverage of $15,000 per person and $30,000 per bodily injuries incident.
So, in such a case, if an underinsured motorist hits you and causes a serious medical injury, it is highly likely that the insurance benefit available for you won’t be sufficient enough to cover your hospital bills.
Suppose you’re involved in a serious accident with an underinsured motorist, and he lacks the liability insurance to cover all your expenses. In that case, your underinsured motorist coverage policy will kick in to make your life easier.
How Does an Underinsured Motorist Claim Work in California?
Uninsured motorist (UM) or underinsured motorist (UIM) coverage is an optional part of California’s insurance policies that can easily be added to your primary auto insurance plan.
In San Francisco, the law requires all auto insurance firms to offer UM and UIM coverage. However, everyone doesn’t need to opt for this coverage, and you may even be declined if you apply for it. But remember, purchasing UM and UIM coverage is generally a good idea to ensure protection for yourself and your asset (in this case, the automobile) from reckless young drivers that zoom through the roads of California.
California requires all motorists to maintain at a minimum coverage of 15/30/5 in insurance of vehicle liability. This means that insurers at fault are required to pay:
- $15,000 to cover any bodily injuries or death per person.
- $30,000 as the total bodily injuries amount or death per accident (of all the people in the vehicle combined).
- $5,000 to cover the property damages done to the other vehicle (also called collision coverage).
Despite this insurance law, California still has more uninsured drivers than any other state. As per the last records taken, it has over 4.1 million drivers without any form of insurance coverage. Next on the list is Florida, with 3.2 million drivers.
This is an overwhelmingly large number of drivers, so it is in your best interest to know how exactly an underinsured motorist claim works in California.
To simplify the policies, uninsured or underinsured motorist coverage in California can be thought to come in three different versions – offering liability protection and property damages. Each of the versions come with their various protections, but they tend to be quite similar.
Uninsured Motorist (UM) Coverage for Uninsured Motorist Bodily Injuries
Uninsured motorist bodily injuries (UMBI) coverage is used to pay for injuries of protected people under your insurance policy. This includes family members in other cars and any passengers in your insured vehicle during the accident with an uninsured driver.
Along with covering all the hospital bills, UMBI can also make up for lost income due to the injuries and cover pain and suffering claims.
Uninsured Motorist Coverage for Damages to Property
Also called UMPD, this coverage is used to pay for any damage done to your car by an uninsured motorist. However, keep in mind that you won’t be able to claim this for a hit and run case. Therefore, if you can choose between opting for UMPD or collision coverage, the latter is probably a better option.
UMPD will pay for your collision deductibles only, so if you already have collision coverage, there is no need to purchase UMPD as well.
Also, bear in mind that it mostly only qualifies coverage for bodily damages when UM is used. This coverage may also come with a specific deductible amount that you first need to pay yourself before your insurance coverage can step up. Although the deductible varies as per your auto insurance firm, it ranges from $200 to $300 on average.
Underinsured Motorists (UIM) Coverage
The last version, UIM, pays up in the same way that UMBI does. The driver at fault only has minimum liability insurance and can’t cover all the expenses you incur due to the accident. Hence, UIM auto insurance will come to your protection and make up for whatever additional expenses are required of your medical bills, auto repairs, or even the vehicle’s replacement.
Do Umbrella Policy Cover Uninsured Motorists in California?
In California, insurance firms usually offer their customers an uninsured or underinsured policy limit equal to the driver’s liability policy limits.
For example, suppose a motorist has insurance limits of 50/100 for any accidents that they cause. In that case, they can opt for a 50/100 insurance policy for an accident caused by other uninsured or underinsured drivers.
California law doesn’t allow drivers to collect a higher amount for bodily injuries caused by an underinsured motorist than the insurance policy’s maximum limit.
However, suppose a driver wishes to have more insurance than the maximum limit of UM or UIM coverage in California. In that case, he can do things a little differently. By purchasing an umbrella policy, which is an inexpensive plan, he can easily cover any excess losses regardless of the insurance policy its maximum limit.
How Do You Bring a Claim for Uninsured or Underinsured Motorist Coverage?
Under most insurance policies, you, as the driver, will be required to notify the underinsured motorist insurer immediately after the accident. This is regardless of who was at fault.
As per the California law, you will need to file a form of SR-1 California accident report at the California Department of Motor Vehicles. It should be done within ten days of the accident, significantly if anybody was injured or the total vehicle damages incurred were more than $1,000. If you fail to do so, the DMV is well within its rights to suspend your (and the other motorist’s) driver’s license.
Once the report has been submitted, the insurance firm will analyze the police reports, any statements made by witnesses, evidence, photographs, and conduct a thorough examination of the insured vehicle. All of this is done to confirm the party at-fault for the accident.
The insurance firm will then make a final determination to file a countersuit against the insured party. This challenges the firm’s decision, and further depositions are carried out.
Remember, even if the insured party was half to blame for the accident, it is still worth filing a countersuit. California’s comparative fault law allows people that are partly to blame for an accident to recover a certain amount of damages.
Frequently Asked Questions
How Long Does it Take to Settle an Uninsured Motorist Claim?
While the total number of days taken to settle an uninsured motorist claim varies, it can take up to 30 days or sometimes 6 to 7 weeks. This is only the case when you report the accident immediately to the insurers, and they don’t have any cause of delays in accepting your claims. Moreover, whether you take the settlement amount or not can also affect the total time.
But all in all, most insurance firms try their best to settle any uninsured motorist claims within a month at maximum.
Can I Sue an Uninsured Motorist?
Uninsured motorists can be sued in terms of personal injuries caused. But the real question is, should you file a personal injury lawsuit against uninsured drivers?
It primarily depends on the uninsured driver’s ability to pay for the expenses you incurred due to the accident. Your personal injury lawyer should be consulted beforehand so they can offer advisory on whether the defendant has sufficient assets to cover your injuries and repair damages caused – either wholly or even partially.
These lawsuits require a lot of time, effort, and additional money. Moreover, they can be quite stressful for all the parties involved. Therefore, it is still best to have uninsured motorist coverage as your primary resource for compensation for any damages.
What Happens If You Reject Uninsured Motorist Coverage?
Suppose you don’t opt for uninsured or underinsured motorist coverage policies and end up in an accident with these parties. In that case, you’ll likely end up in a bad financial situation.
Injured parties who reject this part of auto insurance plans are usually left with little to no compensation for their severe roadside injuries and vehicle damages. So you will not only be hit physically, your finances will be damaged quite a bit too. It can take years to recover and regain financial stability after such an occurrence.
The Final Takeaway
Before deciding to opt for any insurance policy, be sure to consult an insurance broker and get an expert’s advisory on all the different options available to you. However, generally speaking, purchasing an uninsured or underinsured coverage policy is a great idea. This could vary, though, in the case of you having excellent health insurance coverage.
Suppose you are unemployed over the long term or have comprehensive disability insurance policies at work. In that case, you can consider skipping uninsured or underinsured policies in your final auto insurance plans.
This blog entry is written for general information and educational purposes only, and is not a specific legal opinion or advice. You understand that there is no attorney-client relationship between you and the blog editor/publisher. This blog should not be used as a substitute for the competent legal advice of a licensed professional lawyer in your state.