Understanding UM and UIM Coverage
Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage protects you when the at-fault driver either has no insurance or doesn't have enough insurance to cover your damages. This is a claim against your own policy, not the other driver's.
Uninsured Motorist (UM)
- At-fault driver has no liability insurance at all
- Driver cannot be identified (hit-and-run)
- Driver's insurer denies coverage or is insolvent
- Stolen vehicle situations
Underinsured Motorist (UIM)
- At-fault driver has insurance, but limits are too low
- Your damages exceed their policy limits
- Kicks in after exhausting their coverage
- Fills the "gap" up to your UIM limits
According to the Insurance Research Council, about 1 in 8 drivers in the US is uninsured. In some states, the rate exceeds 20%. Even more drivers carry only minimum required limits, which may be as low as $15,000-25,000 - far below what a serious injury costs.
California requires insurers to offer UM/UIM coverage, but you can reject it in writing. If you have UM/UIM coverage, California law provides significant protections through Insurance Code Section 11580.2.
California's minimum liability limits are only $15,000 per person / $30,000 per accident for bodily injury. Many California drivers carry these minimums, making UIM coverage especially important.
When Does UM/UIM Coverage Apply?
Uninsured Motorist Situations
- No insurance: The at-fault driver has no active liability policy
- Hit-and-run: The driver fled and cannot be identified (usually requires physical contact with your vehicle)
- Policy lapsed: Driver's insurance was cancelled before the accident
- Excluded driver: The driver was specifically excluded from the owner's policy
- Insurer insolvency: The at-fault driver's insurance company went bankrupt
Underinsured Motorist Situations
- Insufficient limits: Your damages exceed the at-fault driver's policy limits
- Multiple claimants: Several people were injured and the liable policy is exhausted
- Serious injuries: Medical bills, lost wages, and pain/suffering exceed available coverage
In most states, you must first collect the at-fault driver's full policy limits before your UIM kicks in. You cannot simply choose to skip their insurance and go straight to your UIM coverage.
California uses the "offset" method for UIM claims. Your UIM coverage pays the difference between your damages and what you collected from the at-fault driver. If you have $100,000 in damages and collected $30,000 from the other driver, your UIM would pay up to $70,000 (subject to your UIM limits).
How to File a UM/UIM Claim
Filing a UM/UIM claim is different from a regular insurance claim because you're making a claim against your own insurance for someone else's negligence.
- Report the accident to your insurer. Notify your insurance company about the accident and that the other driver was uninsured or underinsured. Do this promptly - most policies have notification requirements.
- Document everything. Gather the police report, witness information, photos, medical records, wage loss documentation, and any evidence of the other driver's insurance status.
- For UIM claims: Pursue the at-fault driver's coverage first. You typically must exhaust their policy before accessing your UIM. Get their insurer's written agreement to pay their full limits.
- Notify your insurer before settling with the other driver. Your insurer has subrogation rights. They may want to approve any settlement that could affect their ability to pursue the at-fault driver.
- Submit your UM/UIM claim. Provide your insurer with documentation of your total damages and what you've already collected (for UIM claims).
- Negotiate or arbitrate. If your insurer disputes your claim value, you'll need to negotiate. Many UM/UIM policies include mandatory arbitration clauses.
Even though you're making a claim against your own policy, your insurer's interests are opposed to yours - they want to pay less. Prepare and document your claim as carefully as you would against any other insurance company.
Stacking UM/UIM Coverage
"Stacking" means combining UM/UIM limits from multiple policies or vehicles to increase your available coverage. Whether you can stack depends on your state and policy language.
Types of Stacking
- Intra-policy stacking: If you insure multiple vehicles on one policy, can you multiply your UM/UIM limits by the number of vehicles?
- Inter-policy stacking: Can you combine coverage from different policies (e.g., your auto policy plus your spouse's policy)?
State Variations
States take different approaches:
- Stacking allowed: Some states permit stacking unless you specifically waived it
- Stacking prohibited: Some states don't allow stacking at all
- Anti-stacking waivers: Some states allow stacking but let insurers offer discounts for waiving it
California generally does not allow intra-policy stacking of UM/UIM coverage. Under Insurance Code Section 11580.2(p)(3), your recovery is limited to the highest single applicable limit, not the sum of limits on multiple vehicles.
However, inter-policy stacking may be available in some situations. If you're injured while a passenger in someone else's vehicle, you may be able to access both their UM/UIM coverage and your own.
Common UM/UIM Disputes
Coverage Disputes
- "The other driver was insured": Insurer claims the at-fault driver had coverage when you believe they didn't
- Hit-and-run requirements: Many policies require "physical contact" - phantom vehicle claims may be denied
- Late notice: Insurer claims you didn't report the claim promptly enough
- Policy exclusions: Insurer points to exclusions for certain vehicles, drivers, or situations
Valuation Disputes
- Medical necessity: Insurer disputes whether your treatment was necessary or related to the accident
- Pain and suffering: Disagreement over non-economic damages
- Pre-existing conditions: Insurer attributes injuries to pre-existing issues rather than the accident
- Future damages: Disputes over ongoing care or lost earning capacity
Arbitration
Most UM/UIM policies require arbitration rather than litigation if you can't agree on the claim value. Arbitration can be binding (final) or non-binding (you can reject it and go to court).
California Insurance Code Section 11580.2(f) provides that UM coverage disputes are resolved by arbitration. Each party selects an arbitrator, and those two select a third. The arbitrators then decide both coverage and damages issues.
California arbitration awards in UM/UIM cases can be appealed to court only on very limited grounds (procedural errors, not disagreement with the outcome).
Maximizing Your UM/UIM Claim
Document Your Damages Thoroughly
- Keep all medical records, bills, and receipts
- Document lost wages with employer letters and pay stubs
- Keep a pain journal noting daily symptoms and limitations
- Photograph visible injuries throughout your recovery
- Get written opinions from treating doctors about causation and prognosis
Don't Settle Too Quickly
UM/UIM claims, like any injury claim, should account for all past and future damages. If you're still treating or your condition hasn't stabilized, settling early may leave money on the table.
Understand Your Policy Limits
Know your UM and UIM limits and whether they're "combined single limit" or split (per person/per accident). Review your policy for any limitations on:
- Medical payments coverage that might offset UM/UIM
- Coordination with health insurance
- Subrogation rights
If you have Medical Payments (MedPay) coverage, use it for medical bills first. MedPay typically doesn't require fault determination and doesn't reduce your UM/UIM limits in most states.
When to Seek Legal Help
UM/UIM claims can become adversarial, even though you're dealing with your own insurer. Consider consulting an attorney if:
- You have serious injuries with significant damages
- Your insurer is disputing coverage or denying your claim
- There's a significant gap between your demand and their offer
- The claim is heading to arbitration
- You're unsure about settling with the at-fault driver's insurer
- Multiple parties or policies are involved
- You suspect bad faith in how your insurer is handling the claim
California recognizes bad faith claims against insurers who unreasonably handle UM/UIM claims. If your insurer unreasonably delays, denies, or undervalues your claim, you may have remedies beyond the policy limits, including potential punitive damages under Brandt v. Superior Court.
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