Nearly one in eight drivers don’t carry car insurance, according to a 2021 report from the Insurance Research Council. And what happens if you are injured in a car accident caused by another driver who doesn’t carry liability car insurance? You can be stuck with paying substantial out-of-pocket expenses like medical bills, loss of income and other damages. You have an option of suing the other driver personally, but what if they are judgment proof and have no assets? What then?
Fortunately, uninsured motorist (UM) coverage and underinsured motorist (UIM) coverage pay for medical bills, lost wages if you can’t work because of the car accident, pain and suffering compensation, funeral expenses and other expenses. This coverage would be triggered if you or your passengers were involved in a car accident, caused by a driver who either does not carry liability car insurance; a driver who does not have enough liability insurance to cover for your damages; or a driver whose insurance company denies coverage or goes out of business.
WHY YOU SHOULD HAVE UNINSURED / UNDERINSURED AUTO COVERAGE
Uninsured motorist coverage and its mate, underinsured motorist, spare you from paying out of your own money for injuries or property damage from auto accidents you did not cause. In some states this coverage is required, and in some states you are given an option to decline the coverage when purchasing auto insurance. In California, you have the option of declining UM / UIM coverage, if you choose to do so when purchasing auto insurance.
You’ve seen the commercial: “Only pay for what you need”. Now the question is – do you need UM / UIM coverage? We say absolutely yes.
Some clients may think “I have great health insurance. I don’t need uninsured motorist coverage”. But you need to be aware that your health insurance will not pay for everything. Is there a limit to how much your health insurance will pay for an ongoing medical treatment? What about co-pays? Is there a deductible on your health insurance? Most importantly, will your health insurance pay for your pain and suffering compensation or loss wages? Most probably not. Having UM/ UIM coverage protects you and your interests when you have an auto accident in Los Angeles, California.
HOW MUCH UNINSURED MOTORIST (UM/UIM) COVERAGE DO I NEED?
In cases where the other driver does not have auto insurance coverage and is uninsured, and you have UM coverage with limits of $15,000 per person / $30,000 per accident, then your insurance company would cover up to $15,000 given the evidence present and injuries sustained from the car crash.
On the other hand, if the responsible party has minimum limits on their auto liability coverage at $15,000 / $30,000 per accident, and your damages exceed their liability limits, then after exhausting other party’s liability limits, you have an option of claiming your own UIM (underinsured motorist) coverage. However, there is no “stacking” (combining) of California underinsured motorist benefits.
Example: If the other party (negligent driver) has $15,000/$30,000 coverage, and you have UIM of $100,000/$300,000; you must deduct the $15,000 received from the third party (negligent driver) and can only obtain a maximum net of $85,000.00 from your underinsured motorist policy.
Example: If the other party (negligent driver) has $15,000/$30,000 liability coverage, and you have UIM (underinsured coverage) of $15,000/$30,000; your UIM coverage will not be triggered in this instance, since your UIM limits equal to the other party’s liability limits.
Your insurance company has a duty to explain the policy to you. Cal. Code of Regulations Sec. 2695.4(a). For that reason, when purchasing an auto policy, you should be fully aware of what you’re buying and how much coverage you should have – especially when you have assets under your name which can be exposed when you are involved in an accident where you are at fault, with not enough liability coverage. So, if you only carry $100,000 / $300,000 liability limits on your auto policy, and you have millions in assets, it would certainly be smart to raise your liability limits in order to protect your assets in case of an accident where you are the responsible party.
WHO IS COVERED UNDER UM/UIM POLICY IN A CAR ACCIDENT?
In order for your UM / UIM policy to apply, you must be hit by an automobile. It is not a requirement for you to be inside the vehicle when injured. You can be a pedestrian walking, bicycling, skateboarding or even sitting on a park bench.
Further, you generally must also be: (1) The named insured UM/UIM policy holder. (2) Family member of the named insureds, if they live in the same house. (Examples: in-laws, adopted children, step relationships, but not foster children).
The following persons are also covered under the UM/UIM policy only when using the covered vehicle: (1) Anyone driving the covered vehicle with express or implied permission of the owner. (2) Any and all passengers of the covered vehicle.
Note: You can even be outside of the vehicle and pumping gas or checking under the hood. Cockin vs. State Farm (1970) 6 Cal.App.3d 965.
UNINSURED / UNDERINSURED COVERAGE CLAIMS
Some of the variations of UM / UIM coverages:
- Uninsured motorist bodily injury (UM or UMBI) – would cover when an at-fault driver causes an auto accident.
- Uninsured motorist property damage (UMPD) – would cover damages to your car if it’s hit by someone without insurance. Some states allow you to use UMPD to cover hit-and-run accidents.
- Underinsured motorist bodily injury (UIM or UIMBI) – pays when another driver causes a car accident but they do not carry enough auto liability insurance to cover all your medical bills, lost wages, etc.
- Underinsured motorist property damage (UIMPD) – covers damage to your car if it’s hit by someone who does not carry enough auto liability insurance.
UNINSURED MOTORIST CLAIMS AND HIT AND RUN AUTO ACCIDENTS
You must report the hit-and-run accident to the police or law enforcement within 24 hours. See Insurance Code §11580.2(b)(2). You also must report the hit-and-run incident to your insurance company as soon as possible. This would allow the police and your insurance company to begin their own investigations to locate the hit-and-run driver without delay. If you had a dash-board camera in your vehicle at the time of the hit-and-run accident, be sure to have your attorney review the evidence prior to submitting it to your insurance company.
This area of the law can be very complex. Numerous issues may arise during the process of your claim. Keep in mind that auto insurance policies may differ from each other in many aspects. For that reason, get in touch with our firm and one of our attorneys will request a copy of your policy and examine it and determine which coverages would apply in your specific case and review any applicable policy exclusions.
WHY CHOOSE ARATTA LAW FIRM?
At our firm, every injured client will be in direct contact with an attorney. Many large corporate law firms end up transferring you to a case manager – you never speak to an attorney directly and your case becomes part of the mill.
At our firm, we do things different. We pay close attention to every individual case, from the inception and throughout the process of the claim / lawsuit. Our diligence and attention to detail result in consistent higher settlements, which adds up to a higher compensation for you, the client.
ATTORNEY’S ABILITY TO NEGOTIATE
Even though you may have a solid personal injury claim, the skill and the attentiveness of your attorney can also considerably impact how much compensation you will receive for your injuries. If your injury claim is negotiated by a case manager, assigned to your file at a firm, and not an attorney, your claim may end up settling for a lesser amount. This is because adjusters know who they’re dealing with and how aggressive the firm is when settling injury cases. Insurance adjuster also know who they can bully into accepting lower settlements.
An attorney’s ability to negotiate a settlement is, in many ways, the most important skill an attorney possesses. Lawyers who are effective negotiators know the importance of timing, preparation and strategy. That being said, our firm recognizes the importance of precision, timing and subsequent results, which is the foundation of Aratta Law Firm. At our firm, nothing happens by luck but by great preparation and good strategy.