Uninsured Motorist Coverage – What is it and Why You Must Have It

Uninsured Motorist Coverage – What is it and Why You Must Have It

As an Attorney who has specialized in Personal Injury Law for the past 27 years in Los Angeles I’ve interviewed thousands of people who have been injured in motor means accidents. It never ceases to amaze me just how many of these people either do not carry any uninsured/underinsured motorist coverage, or simply don’t carry enough.

Let’s first start with the distinction between uninsured and underinsured motorist coverage. Uninsured motorist coverage is insurance that you buy as part of your automobile liability policy that covers the occupants of your means in the event that the negligent party who caused the accident did not carry any coverage. In functional terms, your uninsured motorist carrier steps into the shoes of the uninsured person who caused the accident, and becomes his/her coverage for the purposes of the claim.

A shared concern that I hear from clients when discussing their pursuit of an uninsured motorist claim is “I don’t want to make a claim against my insurance company. They will raise my premiums!” This is absolutely 100% false. The “UM” Claim is only viable if the uninsured party is found to be “at fault”, which method that any payment to the insured by their UM Carrier is an admission that the insured was NOT at fault, and consequently not at risk for having their premiums raised. A sigh of relief almost always follows this explanation.

Underinsured Motorist Coverage is that coverage which “kicks in” after the negligent party’s insurance carrier has tendered it’s policy limits which are inadequate to compensate the insured for his/her injuries. The UM Limits though must go beyond those of the defendants policy limits in order for coverage to apply. Here is an example of how this works:

Bob is insured with Auto Insurance Company #1 and has UM limits of $100,000.00. He is rear ended in a terrible accident with Joe who is insured with Auto Insurance Company #2. Joe’s liability limits are only $15,000.00. Bob’s medical bills alone are $20,000.00. He also has thousands of dollars in lost earnings. In this case it is likely that Auto Insurance Company #2 will offer to pay Joe’s policy limits of $15,000.00 to settle the case on Joe’s behalf. If Bob accepts that offer he can then make a claim for Underinsured Motorist Benefits with Auto Insurance Company #1 for up to $85,000.00 ($100,000.00 minus $15,000.00 received from Auto Insurance Company #1).

Based on the above-referenced example you can see how important it is to have sufficient UM Coverage. One day in the hospital can start at $10,000.00. I always tell my clients to buy as much UM Coverage as they can provide because this coverage is basic. I am amazed by how many insurance policies I see where there is either no UM Coverage or coverage that is significantly less than the liability coverage. I always say the same thing to these people: “Do you realize that you are insuring people you don’t know and don’t care about for considerably more (sometimes as much as $100,000.00 more) than you and your loved ones who are traveling in your car. I always get the same response: “I’m going to call my agent as soon as I leave your office and increase my coverage”.

UM Coverage also protects you and your family members when you or they are not already in your car, because it applies whenever these individuals are involved in any “Motor means Accident”. This includes situations where you may be a passenger in someone else’s car and there is not enough insurance to cover your injuries. It will insure you, or any family member, if you or they were hit by a car as a pedestrian, or riding a bike, or sitting in an outdoor cafe and a drunk driver crashes into your table. It acts like a safety net for you and your family in ways you probably never imagined. If your injury was the consequence of a motor means accident, then your UM Coverage will be obtainable if needed.

California Law requires that your Insurance Company offer you UM Coverage with limits equal to the limits of liability for bodily injury in the inner policy. See California Insurance Code 11580.2 (a). It is not mandatory that you buy it, but if you don’t, the Insurance Company is required to have you sign a declaration declining such coverage. If they fail to do that, and you are involved in an accident with an uninsured driver, your Insurance Company will be required to provide you with up to $30, 000.00 per person and $60,000.00 per accident, depending on the liability coverage set forth in your policy. See go into. Ins. Co. vs Mulleague (1987) 196 Cal App. 3d 528, 241 Cal. Rptr. 846.

Another reason UM Coverage is so basic is the fact that accidents involving uninsured drivers are usually more serious. It is more likely that an uninsured driver will be driving without a license, driving while drunk, driving at a high rate of speed, etc… If you are involved in one of those collisions, and do not have adequate UM Coverage, you may be out of pocket huge sums of money in medical expenses and lost earnings.

It is my hope that everyone reading this article review their insurance policy closest and increase their UM Coverage by as much as they can provide. You will be surprised at how little the cost of the increase will be and it will supply you with a peace of mind that you and your family deserve.

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