California Uninsured Motorist Claims: Writing Effective UM/UIM Demand Letters
About UM/UIM claims in California: When the other driver has no insurance (uninsured motorist or “UM”) or not enough insurance (underinsured motorist or “UIM”), California law requires most auto policies to include coverage that protects you. Insurance Code § 11580.2 mandates UM/UIM coverage equal to your liability limits unless you specifically reject it in writing.
Unlike a standard third-party claim against the at-fault driver’s insurer, a UM/UIM claim is against your own insurance company. This creates unique dynamics: consent-to-settle clauses, arbitration rights, bad-faith exposure, and different negotiation strategies.
I’m a California-licensed attorney who handles UM/UIM demand letters and arbitrations personally. This guide covers how California UM/UIM claims work, how to write effective demand letters, when arbitration or litigation is appropriate, and how Prop 213 and other California rules affect your claim. For broader car accident demand guidance, see the main California car accident demand letters guide.
California’s UM/UIM framework protects you when:
- Uninsured motorist (UM): The at-fault driver has no liability insurance.
- Underinsured motorist (UIM): The at-fault driver has some insurance, but their limits are less than your damages (and less than your UIM limits).
- Hit-and-run (phantom vehicle): The driver flees and you cannot identify them. Physical contact with your vehicle is required for UM coverage to apply.
| UM (Uninsured) | UIM (Underinsured) |
|---|---|
| At-fault driver has zero liability coverage | At-fault driver has some coverage, but not enough |
| Includes hit-and-run if physical contact occurred | Requires proof other driver’s limits are insufficient |
| No “exhaustion” requirement | Must accept the other driver’s policy limits first (exhaustion) |
| Your UM limits are available immediately | Your UIM recovery = (your UIM limit – other driver’s limit paid) |
Your “dec page” lists all coverages and limits. Look for:
- Uninsured Motorist Bodily Injury (UMBI): Covers injury when other driver is uninsured.
- Underinsured Motorist Bodily Injury (UIMBI): Covers shortfall when other driver’s limits are too low.
- Uninsured Motorist Property Damage (UMPD): Optional; covers vehicle damage if other driver is uninsured (subject to $3,500 deductible under § 11580.2).
If you insure multiple vehicles on the same policy, California allows stacking of UM/UIM limits if your policy language permits. Most modern policies include anti-stacking clauses. Check the UM/UIM section of your policy for language like:
- Stacking allowed: “The limits for each insured vehicle may be combined.”
- No stacking: “The most we will pay is the limit shown for the vehicle you were occupying.”
Insurance Code § 11580.2(h) requires you to obtain your UM/UIM carrier’s written consent before settling with an underinsured at-fault driver. Your policy will have a clause like:
“No settlement with any person or organization alleged to be legally liable for the bodily injury shall be made without our written consent.”
Violation = forfeiture of UIM claim. Always notify your carrier before accepting any settlement from the at-fault driver’s insurer.
Most California UM/UIM policies include mandatory arbitration clauses. Typical language:
“If we and the insured do not agree on the amount of damages, either party may demand arbitration. Arbitration shall be binding and shall be conducted in accordance with the rules of the American Arbitration Association.”
Arbitration is generally faster and cheaper than litigation, but you lose the right to a jury trial. Either you or the insurer can demand arbitration; the other party cannot refuse.
Scenario: You are rear-ended at a stoplight. Other driver has no insurance. You have $100K UM coverage. Injuries: herniated disc, $40K medical bills (Howell-adjusted to $18K actually paid), $5K wage loss, pain-and-suffering claim $30K.
Claim process:
- Notify your carrier immediately → file UM claim
- Provide police report (cites uninsured driver), DMV verification
- Complete treatment, gather all records
- Demand $53K ($18K medical + $5K wage + $30K pain-and-suffering)
- Carrier offers $25K → negotiate to $40K or demand arbitration
Scenario: Head-on collision, other driver 100% at fault. Other driver has $15K policy limit. Your damages: $80K. Your UIM limit: $100K.
Claim process:
- Notify your UIM carrier before settling with at-fault driver
- Obtain written consent to settle for $15K (other driver’s limit)
- Accept $15K from at-fault driver’s policy
- Submit UIM claim to your carrier for remaining $65K ($80K total – $15K received)
- Your UIM carrier pays up to $85K max ($100K UIM limit – $15K already paid)
[Address]
[City, CA ZIP]
[Email] | [Phone]
[Date]
[Insurance Company Name]
Uninsured Motorist Claims Department
[Address]
RE: Uninsured Motorist Bodily Injury Claim
Policy No.: [XXX]
Claim No.: [XXX]
Date of Loss: [Date]
Claimant: [Your Name]
Dear Claims Manager:
I am writing to formally present my uninsured motorist bodily injury claim arising from a motor vehicle accident that occurred on [Date] in [City], California. Pursuant to California Insurance Code § 11580.2, my policy includes uninsured motorist coverage with limits of $[XXX] per person / $[XXX] per accident.
Accident Summary:
On [Date], I was lawfully operating my vehicle [describe] when the at-fault driver, [Name], [describe collision—e.g., ran a red light and T-boned my vehicle]. The [City] Police Department responded and issued report no. [XXX], citing the other driver for violation of Vehicle Code § [XXX]. The other driver was uninsured at the time of the collision, as verified by [DMV inquiry / ISO database search / “no coverage” letter from alleged insurer—attach].
Liability:
The other driver is 100% at fault. [Summarize evidence: police report findings, witness statements, traffic camera, vehicle damage consistent with your account, etc.] Under California Civil Code § 1714, the at-fault driver is liable for all damages proximately caused by their negligence.
Injuries and Treatment:
As a direct result of the collision, I sustained [list injuries]. I sought immediate treatment at [Hospital ER], where [describe initial treatment]. Subsequent care included [list all providers, imaging, physical therapy, specialists]. I have now reached maximum medical improvement as of [Date], with [permanent impairment / ongoing symptoms / full recovery—describe].
Economic Damages (Howell-Adjusted):
Medical expenses (amount paid per Howell v. Hamilton Meats): $[XXX]
Lost wages: $[XXX]
Property damage / other out-of-pocket: $[XXX]
Total economic damages: $[XXX]
Non-Economic Damages:
Pain, suffering, and emotional distress: $[XXX]
Total Damages: $[XXX]
Demand:
I hereby demand payment of $[XXX] (or policy limits of $[XXX], whichever is less) to settle this uninsured motorist claim. This demand is supported by the enclosed documentation [list exhibits]. Please respond within 30 days. If we cannot reach a fair settlement, I am prepared to invoke the arbitration provision under the policy.
I trust you will handle this claim in good faith pursuant to your duties under Comunale v. Traders & General Insurance Co. and related California law.
Sincerely,
[Your Signature]
[Your Name]
- Police report or traffic collision report
- Proof of other driver’s uninsured/underinsured status (DMV records, ISO search, “no coverage” letter)
- All medical records (ER, imaging, treatment notes, discharge summaries)
- Medical billing with EOBs showing amounts actually paid (Howell adjustment)
- Wage-loss documentation (employer letter, pay stubs, tax returns)
- Property damage estimates or repair invoices
- Photos of vehicles, injuries, scene
- Witness statements (if any)
- Your policy declarations page showing UM/UIM limits
- For UIM: proof of exhaustion (settlement release from at-fault driver’s carrier) and written consent from your carrier
Most California UM/UIM policies include mandatory arbitration clauses governed by Code of Civil Procedure § 1281 et seq. Either you or the insurer can demand arbitration if you disagree on the amount of damages (assuming liability and coverage are not in dispute).
Your own insurer owes you an implied covenant of good faith and fair dealing (Comunale v. Traders & General Insurance Co., 50 Cal.2d 654 (1958)). If the insurer unreasonably denies or delays your UM/UIM claim, you can sue for breach of the covenant (bad faith), which allows recovery of:
- Contract damages: The policy benefits wrongfully withheld.
- Tort damages: Emotional distress, economic harm caused by the denial (e.g., credit damage, medical debt collection).
- Punitive damages: If the insurer’s conduct was oppressive, fraudulent, or malicious (Civ. Code § 3294).
- Attorney fees: Under Brandt v. Superior Court, prevailing plaintiff can recover fees in bad-faith insurance cases.
1. Benefits due under the policy were withheld.
2. The insurer’s reasons for withholding benefits were unreasonable.
3. The insurer knew or recklessly disregarded that its reasons were unreasonable.
Common bad-faith scenarios in UM/UIM claims:
• Denying coverage when liability and damages are clear.
• Unreasonable delay in investigating or responding to claim.
• Lowball offer with no supporting analysis (e.g., offering $5K on $50K claim within policy limits).
• Failure to conduct adequate investigation (ignoring medical records, not interviewing witnesses).
• Forcing you to arbitration when the claim is clearly worth policy limits.
I am a California-licensed attorney who personally handles uninsured and underinsured motorist claims. UM/UIM claims involve unique procedural requirements (consent-to-settle, exhaustion, arbitration rights) and California-specific legal rules (Howell, Prop 213, bad-faith exposure) that demand careful attention.
I also assist insurance carriers and third-party administrators in evaluating and defending UM/UIM claims to avoid bad-faith exposure.
- Insurance Code § 11580.2 compliance: Consent-to-settle, exhaustion, offset formulas, and rejection requirements are unique to California.
- Howell rule: Medical damages limited to amounts actually paid (not billed). Carriers aggressively apply this; claimants must provide EOBs and document write-offs.
- Prop 213 traps: Uninsured claimants lose all pain-and-suffering recovery. Many claimants don’t realize this until the carrier raises it.
- Bad-faith exposure: Comunale and Egan create significant liability for insurers who unreasonably deny UM/UIM claims. Knowing when and how to invoke bad-faith is critical leverage.
- Arbitration tactics: UM/UIM arbitrations are faster and cheaper than trials, but require specific preparation (limited discovery, informal rules, focus on damages over liability).
You can handle a straightforward UM/UIM claim yourself if liability is clear, damages are well-documented, and you understand Howell adjustments and Prop 213. However, UM/UIM claims involve technical requirements (consent-to-settle, exhaustion, arbitration clauses) that are easy to violate. An attorney is advisable if:
- Your damages approach or exceed your UM/UIM policy limits
- The carrier is making lowball offers or delaying unreasonably (bad-faith risk)
- You need to arbitrate or litigate
- There is a consent-to-settle issue (UIM) or comparative negligence defense
If your carrier denies coverage, first confirm the denial is in writing and understand the stated reason (e.g., “no coverage under policy,” “comparative negligence bars recovery,” “Prop 213 applies”). Common responses:
- Coverage dispute: If the carrier claims UM/UIM doesn’t apply, review your policy and Insurance Code § 11580.2. If you didn’t reject UM/UIM in writing, you have it.
- Liability dispute: If the carrier claims you were at fault or comparatively negligent, provide rebuttal evidence (police report, witnesses, expert analysis).
- Damages dispute: If the carrier disputes injury causation or amount, demand arbitration under the policy. You cannot be denied arbitration if the policy includes it.
- Bad faith: If the denial is unreasonable (clear liability, clear damages within limits), consult an attorney about a bad-faith claim under Comunale.
Uncontested claim: 30-90 days from demand letter to settlement if the carrier agrees liability and damages are clear.
Negotiation: 3-6 months if there is back-and-forth on valuation but no arbitration.
Arbitration: 6-12 months from demand to arbitration hearing and award. AAA/JAMS arbitrations are faster than litigation but require scheduling an arbitrator and conducting discovery.
Bad-faith litigation: 1-3 years if you must sue the carrier in superior court for unreasonable denial. Most bad-faith cases settle before trial once the insurer faces discovery and punitive damages exposure.
California allows stacking of UM/UIM limits across vehicles on the same policy if the policy language permits it. Most modern policies include anti-stacking clauses like: “The most we will pay is the single highest limit for any one vehicle you own.”
Check your policy’s UM/UIM section. If it is silent on stacking, California courts have historically allowed it. If it explicitly prohibits stacking, you are limited to the single highest limit.
Example (stacking allowed): You insure two cars, each with $100K UM. You are injured as a pedestrian by an uninsured driver. You can claim $200K total ($100K + $100K).
Example (stacking prohibited): Same scenario, but policy says “no stacking.” You can only claim $100K (the limit for one vehicle).
Insurance Code § 11580.2(h) requires you to obtain your UM/UIM carrier’s written consent before settling with an underinsured at-fault driver. If you settle without consent, the carrier can deny your entire UIM claim—even if the settlement was reasonable.
How it works:
- Notify your UM/UIM carrier as soon as you know the other driver is underinsured.
- Provide your carrier with the other driver’s policy limits and your settlement demand.
- Your carrier will either (a) consent in writing, (b) deny consent (rare—usually means they dispute coverage), or (c) request more information.
- Once you have written consent, you can settle with the at-fault driver and then pursue the gap from your UIM carrier.
Trap: If you accept a check from the at-fault driver’s insurer before getting consent, you may forfeit your UIM claim entirely. Always notify your carrier first.
Yes. Proposition 213 (Civil Code § 3333.4) bars uninsured drivers from recovering non-economic damages (pain-and-suffering, emotional distress) in any vehicle accident claim, including UM/UIM claims against their own insurer.
What it means: If you did not have liability insurance at the time of the accident, you can only recover economic damages (medical expenses, wage loss, property damage) from your UM/UIM carrier. You cannot recover pain-and-suffering even if the other driver was 100% at fault.
Exception: Prop 213 does not apply if the at-fault driver was convicted of DUI or was fleeing from a felony at the time of the accident.