Seventeen percent of California motorists are uninsured. One source says that Los Angeles is the most uninsured city in the country. And with car accident injuries costing victims tens and even hundreds of thousands of dollars, even drivers who have the minimum insurance amounts may not have enough coverage.
For drivers who want to protect themselves, there is uninsured and underinsured motorist coverage. Uninsured motorist coverage applies when the driver at fault doesn’t have any insurance while underinsured motorist coverage applies when the driver has insurance, but it’s not enough.
What is Underinsured Motorist (UIM) Coverage?
Underinsured motorist coverage (UIM) coverage is insurance that pays the insured person directly if the party at fault doesn’t have enough liability insurance. If damages exceed liability limits, underinsured motorist coverage may pay the difference. It is insurance that someone can purchase to protect themselves from the possibility of another driver being unable to pay full damages if they are responsible for an accident.
Uninsured vs. underinsured
An uninsured claim is when the other driver has no insurance. In an underinsured claim, the other driver has some insurance, but it’s not enough to fully cover damages.
How Does an Underinsured Motorist Claim Work Following a Car Accident?
- A car accident happens.
- Parties exchange insurance information as required by law. Insurance information may also be gathered from an SR-1 form.
- The police may respond. They investigate and create a report.
- Each party reports the accident to their insurance.
- The parties who are not at fault determine their damages.
- A review of policy limits reveals that total damages exceed the at-fault driver’s policy limits.
- The insurance company for the at-fault driver pays the limits of the policy.
- Injured parties, including the driver and passengers in the policyholder’s vehicle, collect the remaining amounts from the underinsured motorist policy.
In an underinsured motorist claim, the injured parties recover from two sources. First, they receive compensation from the insurance policy of the driver at fault. They then receive compensation from their insurance policy or the insurance for the driver of the vehicle they were in.
Examples
Example #1
Driver A is at fault for the accident. They have $15,000 per person in liability coverage. Driver B has damages that total $30,000 and has underinsurance coverage for $30,000. Driver B may recover $15,000 from Driver A’s insurance. They may recover the remaining $15,000 from their own insurance to make a full recovery.
Example #2
Driver A is at fault for the accident. They have $15,000 per person in liability coverage. Driver B has damages that total $50,000 and has underinsurance coverage for $30,000. Driver B recovers $15,000 from Driver A’s insurance and $15,000 from Driver B’s insurance, for a total of $30,000. They may not recover beyond the policy limit of their underinsured coverage.
Example #3
Driver A is at fault for the accident. They have $30,000 total in liability coverage. Driver B and Passenger B are injured in the accident.
Driver B has $50,000 in damages. Passenger B has $50,000 in damages. Driver B has an underinsured policy of $100,000. Driver A’s insurance pays $30,000. Driver B and Passenger B may collect the remaining $70,000 from Driver B’s insurance. Both injured parties make a full recovery in this scenario.
When Do You Need To File an Underinsured Motorist Claim?
You need to file an underinsured motorist claim when the at-fault party doesn’t have sufficient insurance to cover damages. You must evaluate the damages that you can claim under the law.
If damages exceed liability coverage, you may then need to file an underinsured motorist claim.
You may sue the driver at fault for personal liability, but they often don’t have enough assets to make this worthwhile. You may sue your own insurance company if they fail to honor your underinsured motorist policy.
How To Determine if the Other Driver is Underinsured
Determining the other driver’s insurance limits can be challenging in California. Before filing a lawsuit, you can ask their insurance company to provide that information. If the insured agrees to disclosure, the insurance company must release the policy limit information.
You may need to file a lawsuit to have the right to know the adverse party’s insurance limits.
Once a formal lawsuit has been filed, the insurance company must release the insurance policy limits in discovery. See Cal. Ins. Code. § 791.13.
California UIM Coverage
In California:
- The insurance company must offer underinsured motorist coverage.
- You don’t have to accept UIM coverage. A policyholder may choose to have liability coverage only.
- If you decline it, you must waive it in writing. There is specific language that must be used to decline coverage.
- Cal. Code § 11580.2(m) requires the insurance company to offer UIM coverage limits equal to selected bodily insurance limits, up to certain amounts.
- California does not allow the stacking of multiple policies for an underinsured claim.
Maximizing Compensation in an Underinsured Motorist Claim
Like other car accident claims, maximizing underinsured motorist compensation requires thoroughly documenting injuries. It’s important to seek prompt medical attention if there is any possibility of injury. In addition, the injured party should look at all types of damages, including lost wages and pain and suffering.
Underlying every car accident claim in California is proof of fault. The injured party must build evidence to prove fault and the right to compensation. Even if an injured party already knows they will have to access their underinsured motorist coverage, they must prove the other party’s legal fault.
A litigant should be aware of the possibility that the at-fault driver is underinsured. Maximizing compensation may mean filing a formal claim.
Contact an Experienced San Bernardino Car Accident Lawyer
Have you been in a car accident? Are you wondering how underinsured motorist claims work after a car accident? Contact an experienced San Bernardino car accident lawyer at LA Century Law. With a 99% success rate and millions recovered for our clients, we’re ready to represent you. Call or message us now.