Why You Should Carry More Uninsured/Underinsured Motorist Coverage in California


Uninsured/Underinsured Motorist CoverageAbout 15 percent of drivers in California are not insured, according to data from Wallet Hub. The odds of getting into an accident with an uninsured driver is about one in seven. Although uninsured/underinsured motorist (UM/UIM) coverage is optional, it is worth including it in your policy.

Below, we discuss why you should consider adding UM/UIM to your insurance policy and when you may be able to file a claim for this type of coverage.

If you were injured by an uninsured driver, call our auto collision attorneys in Sacramento today. We offer a free consultation to determine your legal options. We also do not charge you any upfront fees for our services.

Is UM/UIM Coverage Mandatory?

UM/UIM coverage is not required under California law. It is an optional add-on to a new or existing auto insurance policy.

However, insurance companies are legally required to offer at least $15,000 in bodily injury liability per person and up to $30,000 per accident. You cannot select more UM/UIM coverage than the limit on your bodily injury liability. For example, if you have $100,000 of bodily injury liability, you cannot select $200,000 of UIM.

The only way a driver may reject the coverage is in writing. The policyholder may e-sign a document rejecting the coverage or sign a physical document.

When you first sign up for coverage, make sure you review all the paperwork the insurance company has you sign. Some agencies may automatically check a box saying you are rejecting coverage and then ask you to provide your signature. This could become an issue if you find yourself in a situation when you need the coverage, but your insurance agent did not clearly state you rejected the coverage.

Is Uninsured Motorist Coverage Expensive?

Selecting UM/UIM coverage increases a premium by $50 to $75 annually. Considering how much coverage the policy should offer if you need to file a claim, drivers may think its value outweighs the cost.

What Does UM/UIM Cover?

As its name states, UM/UIM covers accident victims in cases when the at-fault driver has no insurance or not enough insurance to cover the cost of damages he or she caused.

This means accident victims may use their UM/UIM coverage to have the following losses compensated:

  • Medical bills
  • Lost wages
  • Loss of earning capacity
  • Property repairs/replacement

UM/UIM also covers non-economic damages. Although you are filing a claim with your own insurance, it acts as the liability insurance of the at-fault driver. Therefore, it should cover all the damages the other driver’s insurance would be liable for, including pain and suffering.

Do I Need This Coverage If I Have Health Insurance?

Some drivers may question whether they need UM/UIM coverage if they already carry health insurance. Although health insurance should help pay for your medical bills, there are other factors to consider.

You need to determine what your health insurance covers. Some insurance providers do not cover injuries caused by motor vehicle accidents.

Even if your health insurance does cover this type of injury, you still have a deductible to meet and copays. These costs can range from $1,000 to $10,000 or more depending on your policy. UIM coverage could help cover these added expenses.

When Can Having UM/UIM Be Helpful?

There are several accident scenarios when having UM/UIM coverage may be useful.

Hit-and-Run Accidents

When the at-fault driver flees the scene of an accident, there may not be any available insurance for some time. In fact, only about 10 percent of all hit-and-run drivers are caught and held accountable.

Even when these drivers are caught, it is likely they do not carry insurance. This may be why they fled the scene of the accident in the first place.

No-Contact Accidents

A no-contact accident occurs when one driver causes an accident without ever damaging his or her vehicle. An example of this is if a driver runs you off the road, causing you to crash into a solid object, and then keeps going.

Even though you are not at fault for the collision, there is no other driver whose insurance you can file a claim with because the other driver likely has no idea the crash happened.

Accidents With Unlicensed or Undocumented Drivers

UM/UIM coverage may also be useful if you are injured in an accident with an unlicensed driver, as he or she most likely does not have insurance coverage.

Although undocumented immigrants can obtain a driver’s license in California, so they can purchase insurance, data shows that many cancel or downgrade their coverage shortly after paying their first premium.

Does California Allow UM/UIM Stacking?

Many states allow insurance policyholders to “stack” their uninsured/underinsured motorist coverage. This means you can take the coverage limits of multiple people in a single policy and add them together to increase your limit.

For example, if you have a $100,000 UM/UIM limit and your spouse has a $100,000 limit on the same policy, you can “stack” the two together to increase your limit to $200,000. There is usually an additional fee for stacking insurance.

Some states also allow policyholders to stack insurance limits across multiple policies. However, California law prohibits any type of stacking of UM/UIM coverage.

How Do I File an Uninsured/Underinsured Motorist Claim?

UM/UIM claims are filed by the insurance policyholder. In other words, they are first-party claims.

You may not be able to file a UM/UIM claim until the insurance policy of the at-fault driver runs out. If he or she does not have any insurance, you may be able to file a claim right away.

It is important to note that because California prohibits insurance stacking, you cannot recover compensation from your own policy unless your uninsured/underinsured motorist coverage limit is greater than the insurance limit of the at-fault driver.

For example, if the at-fault driver only carries $15,000 of liability insurance, you must have more than $15,000 in UIM coverage to be able to file a claim. If your UIM limit is also $15,000, you may not be able to recover compensation.

What if My Insurance Refuses to Pay?

If your insurance company refuses to pay out a UM or UIM claim, you may be able to file a bad faith insurance claim if the decision for denying coverage is not valid.

Call an Experienced Attorney Today

Carrying additional UM/UIM insurance could be helpful in certain situations. Even if you have health insurance, it could be difficult to have extra medical costs covered without compensation from a liability insurance policy.

If you have questions after a crash, call us today. Our attorneys have decades of experience helping accident victims recover the compensation they need.

Call 916-777-7777 to schedule a free consultation.