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Uninsured and Underinsured Motorist Protection (UM)

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Uninsured and Underinsured Motorist Protection (UM)


Unforeseen accidents can lead to substantial financial burdens, but having the right insurance coverage can help protect you and your passengers. Uninsured and underinsured motorist coverage is designed to assist in scenarios involving at-fault drivers without liability insurance, phantom drivers, hit-and-run incidents, or drivers with inadequate insurance to cover your expenses.

Uninsured Motorist Coverage

Uninsured motorist coverage is an optional insurance offered by your auto insurance provider. In situations involving hit-and-run accidents or collisions with uninsured drivers, this coverage can provide compensation.

The coverage amount is flexible, allowing you to determine the level of protection you want. In California, purchasing this coverage is not mandatory, and the available insurance for such claims is typically specified in your existing insurance contract. For example, if you opt for uninsured benefits worth $15,000 and sustain an injury due to an uninsured driver, your insurance company will only cover up to $15,000 for damages.

We recommend considering a minimum coverage of $100,000 per individual and $300,000 per incident. In many cases, higher coverage may be advisable.

There are no time limits on how long your uninsured benefits remain available. However, you must initiate a lawsuit or arbitration proceedings with your insurance provider within two years after the accident, or you may forfeit your claim. Remember that your coverage is limited to the uninsured policy benefits you selected. For instance, if you experience a life-threatening injury requiring emergency care and critical hospitalization, your $100,000 policy limit may be exhausted quickly.

On the other hand, if you sustain an injury necessitating a prolonged rehabilitation program and treatment, you could receive benefits over an extended period, but still limited to the $100,000 policy maximum, provided you initiated arbitration within the stipulated two-year period.

Filing claims under uninsured benefits requires submission to your insurance company, following Insurance Code Section 11580, among others. As with claims against at-fault parties, there are specific time constraints for formal claims.

Underinsured Motorist Coverage

Underinsured motorist coverage complements uninsured motorist coverage. When the responsible party lacks sufficient insurance coverage to compensate you for injuries, your policy may offer additional coverage. For example, if the at-fault party’s liability limits are $25,000, the maximum claim from their insurance is also $25,000 per person.

In cases where serious injuries result in significant medical expenses, the value of your claim may exceed $25,000. With $100,000/$300,000 underinsured coverage, you can pursue an additional $75,000 from your own underinsured motorist insurance after collecting $25,000 from the at-fault party.

Filing claims for uninsured/underinsured benefits should be done within two years and in compliance with Insurance Code Section 11580.

Alternative Sources for Medical Expenses

Before settling a personal injury claim, other sources may cover your medical expenses, including state and federal programs:

  1. Medi-Cal: If you qualify for Medicaid benefits, Medi-Cal can cover your treatment following its guidelines. In the event of a successful settlement or verdict against the negligent party, you may be required to reimburse Medi-Cal, with some credit for attorney fees and costs. Your attorney must be well-informed about the regulations and case decisions determining the amount owed to Medi-Cal.

  2. Medicare: Medicare recipients can have their medical expenses covered per Medicare rules and regulations. Like Medi-Cal, if you obtain a settlement or verdict against the negligent party, you must reimburse Medicare minus credits for attorney fees and costs. Again, your attorney must be up-to-date with the latest developments to ensure accurate reimbursement amounts.

Please note that uninsured/underinsured coverage cannot exceed your liability coverage. In other words, your liability coverage serves as the foundation for uninsured/underinsured insurance. If you hold a state-mandated minimum liability policy of $15,000, you cannot secure more than $15,000 in uninsured/underinsured coverage.

Editor’s Note: updated 11.6.23 Image by Tumisu from Pixabay [cs 656]