Understanding Uninsured and Underinsured Motorist Coverage in California

Why UM/UIM Coverage Is Essential for California Drivers

Despite California’s mandatory auto insurance laws, an estimated one in seven drivers on California roads has no insurance at all. And many who do carry insurance have only the state minimum — $15,000 per person and $30,000 per accident for bodily injury — which is woefully inadequate to cover the costs of a serious accident. This is where uninsured motorist (UM) and underinsured motorist (UIM) coverage comes in.

What Is UM/UIM Coverage?

Uninsured motorist (UM) coverage pays for your injuries and damages when the at-fault driver has no insurance or flees the scene (hit and run). Underinsured motorist (UIM) coverage kicks in when the at-fault driver’s insurance limits are not enough to cover your full damages.

Under California Insurance Code Section 11580.2, every auto insurance policy sold in California must include UM coverage equal to your liability limits, unless you specifically reject it or choose lower limits in writing. UIM coverage is also offered but can be waived.

How UIM Coverage Works: An Example

Suppose you are seriously injured in a car accident caused by another driver. Your medical bills, lost wages, and pain and suffering total $250,000. The at-fault driver only has $30,000 in liability coverage — the California minimum. If you carry $100,000 in UIM coverage, your UIM policy can pay the difference between the at-fault driver’s $30,000 policy and your $100,000 UIM limit — giving you an additional $70,000 toward your damages.

Filing a UM/UIM Claim: It Is Not as Simple as It Sounds

Many people assume that filing a claim with their own insurance company will be straightforward. Unfortunately, your own insurer has the same financial incentive to minimize your payout as any other insurance company. They may dispute the extent of your injuries, question the reasonableness of your medical treatment, or argue that your damages are not as high as you claim.

Under California Insurance Code Section 11580.2(f), if you and your insurer cannot agree on a settlement, either party can demand binding arbitration. This is a formal process similar to a trial, where an arbitrator hears evidence and makes a binding decision. Having an experienced attorney represent you in arbitration is critical to ensuring a fair outcome.

Bad Faith Insurance Practices

If your insurance company unreasonably delays, denies, or underpays your UM/UIM claim, they may be acting in bad faith. Under California Insurance Code Section 790.03(h), insurers have a duty to investigate claims promptly and fairly, make reasonable settlement offers, and not misrepresent policy provisions. If they violate these duties, you may be entitled to additional damages beyond your policy limits.

Protect Yourself — Review Your Coverage Today

We recommend every California driver carry UM/UIM limits that match their liability limits. If you have been injured by an uninsured or underinsured driver, contact Smilove & Rosenblum at (800) 300-3226 for a free consultation.

Related Resources

• Practice Area: Car Accident Attorney
• Practice Area: Motorcycle Accident UM/UIM Claims
• Hit-and-Run Accidents in California
• Dealing with Insurance Adjusters After a Car Accident