If you are injured in a California car accident caused by another driver, you may expect the at-fault driver's insurance to cover your losses. But what happens when that driver has insurance—and their policy limits are not enough to cover your injuries and other damages?

That's where Underinsured Motorist (UIM) coverage may become important.

UIM coverage is designed to provide bodily injury protection when an at-fault driver has liability insurance, but the available limits are not enough to cover the damages resulting from the accident. California's Department of Insurance describes UIM coverage as protection for injuries when the other driver does not have enough insurance to pay for the damages.

For California drivers, understanding your UIM coverage before an accident happens can make a significant difference if you are later involved in a serious collision.

What Is Underinsured Motorist (UIM) Coverage?

Underinsured Motorist (UIM) coverage is a type of auto insurance coverage that may help pay for covered bodily injury losses when another driver is at fault and does not have enough liability insurance to cover the damages.

For example, suppose another driver causes a collision and you suffer serious injuries. The other driver's insurance policy may have a relatively low bodily injury limit, while your medical expenses, lost income, and other accident-related losses are substantially higher.

If your own policy includes applicable UIM coverage, you may be able to pursue benefits under that coverage, subject to the terms of your policy and California law.

California's Department of Insurance explains that uninsured/underinsured motorist coverage is intended for situations where the other driver is at fault and either has no insurance or does not have enough insurance.

What Is the Difference Between Uninsured and Underinsured Motorist Coverage?

The terms are similar, but they address different situations:

• Uninsured Motorist (UM) coverage generally applies when the at-fault driver does not have liability insurance.
• Underinsured Motorist (UIM) coverage may apply when the at-fault driver has liability insurance, but the available limits are insufficient to cover the damages.
• Uninsured Motorist Property Damage (UMPD) may provide limited coverage for vehicle damage caused by an identified uninsured driver, subject to the policy and applicable requirements. California's Department of Insurance identifies the UMPD limit as $3,500.

This article focuses primarily on UIM bodily injury coverage.

Why Is UIM Coverage Important in California?

California requires drivers to maintain minimum liability insurance limits for private passenger vehicles. As of January 1, 2025, the minimum limits are:

• $30,000 for bodily injury or death to one person
• $60,000 for bodily injury or death to two or more people
• $15,000 for property damage

These are the minimum financial-responsibility limits for private passenger vehicles under California law.

The problem is that even the current minimum bodily injury limits may be inadequate after a serious collision.

Medical treatment, lost income, rehabilitation, and the effects of a significant injury can result in damages that exceed the at-fault driver's available liability coverage.

A Simple Example

• Imagine that another driver causes a collision and you suffer injuries resulting in $75,000 in total damages.
• The other driver's liability policy has a $30,000 bodily injury limit.
• The other driver's insurance may therefore be limited by the applicable policy limits. If you also have applicable UIM coverage under your own auto policy, that coverage may become relevant to the portion of your covered damages that remains uncompensated, subject to your policy limits, the facts of the claim, and applicable California law.
• The exact amount available under a UIM claim depends on the circumstances of the accident, the applicable insurance policies, the value of the bodily injury claim, and other factors.

How Does UIM Coverage Work After a California Car Accident?

A UIM claim generally involves several important questions:

1. Was the Other Driver Responsible for the Accident?

UIM coverage is generally associated with accidents where the other driver is legally responsible for the collision.

Evidence such as the police report, photographs, witness statements, vehicle damage, medical records, and other documentation may be important when establishing what happened.

2. How Much Insurance Does the At-Fault Driver Have?

You need to determine the at-fault driver's available bodily injury liability limits.

A driver's policy may provide more than the California minimum, so the minimum limits should not be assumed without confirming the applicable policy.

3. What Are Your Damages?

The value of a bodily injury claim can involve more than medical bills.

Depending on the circumstances, damages may include:

• Medical treatment and related expenses
• Future medical care
• Lost wages
• Loss of earning capacity
• Physical pain and suffering
• Emotional distress
• Other legally recoverable losses

The value of a claim depends on the facts and evidence of each individual case.

4. Do You Have UIM Coverage?

Your own auto insurance policy must be reviewed to determine whether you have applicable UIM coverage and what limits and conditions apply.

California requires insurers to offer uninsured motorist coverage, and an insured who declines the coverage must generally sign a waiver. The specific terms of a UIM claim, however, depend on the policy and applicable law.

5. How Do the Liability and UIM Limits Interact?

UIM coverage does not simply mean that you automatically receive the full amount of your policy limit.

The available recovery depends on the applicable policy provisions, the value of the claim, the other driver's coverage, and other legal and factual considerations.

This is one reason it is important to review the actual insurance policies involved before assuming how much coverage is available.

Does California Require UIM Coverage?

No. California does not require drivers to purchase UIM coverage as part of the state's mandatory minimum liability insurance.

However, insurers are required to offer uninsured motorist coverage in connection with qualifying auto liability policies, and an insured who declines the coverage must sign a waiver.

Because UIM coverage can become important when an at-fault driver's liability limits are insufficient, drivers should review their insurance declarations page and policy to understand whether they have this coverage and what limits apply.

How Much UIM Coverage Should You Have?

There is no single UIM limit that is appropriate for every driver.

The amount of coverage you may want to carry depends on factors such as:

• Your financial circumstances
• Your assets and income
• How frequently you drive
• Where you drive
• The amount of bodily injury liability coverage you already carry
• The potential financial consequences of a serious accident

California Department of Insurance materials show that uninsured/underinsured motorist bodily injury coverage is commonly offered at limits that correspond to bodily injury liability limits, subject to California's insurance rules.

Rather than choosing a limit based solely on a general recommendation, consider discussing your specific coverage needs with a licensed insurance professional.

Can UIM Coverage Help If Your Injuries Are Serious?

Potentially, yes.

Serious injuries can create substantial medical expenses and other losses. Examples can include:

• Traumatic brain injuries
• Spinal cord injuries
• Fractures
• Significant orthopedic injuries
• Nerve damage
• Long-term rehabilitation needs
• Permanent disabilities

When the at-fault driver's liability coverage is insufficient to compensate for covered losses, applicable UIM coverage may provide an additional source of recovery.

However, having UIM coverage does not guarantee payment of a particular amount. The claim must still be evaluated under the applicable policy and California law.

Can I Make a UIM Claim Against My Own Insurance Company?

Potentially, yes.

Unlike a typical third-party claim against the driver who caused the accident, a UIM claim involves seeking benefits under your own auto insurance policy.

That does not mean the insurance company automatically agrees with the value of your claim.

The insurer may evaluate issues such as:

• Liability for the accident
• The extent of your injuries
• Medical treatment
• Causation
• Lost income
• The available liability limits
• Your UIM policy limits
• Other applicable policy provisions

Because UIM claims involve the interpretation of an insurance contract as well as the underlying accident and injuries, it can be helpful to have the policy and claim reviewed by an experienced California personal injury attorney.

What Should I Do After an Accident With an Underinsured Driver?

If you believe the at-fault driver may not have enough insurance to cover your damages, consider taking the following steps:

1. Seek appropriate medical attention.

Follow your healthcare provider's recommendations and keep records of your treatment.

2. Preserve evidence.

Keep photographs, videos, medical records, bills, wage-loss documentation, police reports, witness information, and other evidence related to the accident.

3. Obtain the insurance information.

Find out which insurance company covers the at-fault driver and what liability limits may apply.

4. Review your own auto insurance policy.

Do not assume that you do or do not have UIM coverage. Check your declarations page and policy documents.

5. Notify your insurance company when appropriate.

Follow the notice requirements in your policy and keep records of your communications.

6. Consider speaking with an attorney.

If your injuries are significant or the available insurance coverage is complicated, an attorney can review the accident, insurance policies, medical records, and potential damages to help you understand your legal options.

Frequently Asked Questions About UIM Coverage in California

Is UIM coverage required in California?

No. California requires minimum liability insurance, but UIM coverage is not mandatory. However, insurers generally must offer uninsured motorist coverage in qualifying policies, and an insured who rejects the coverage must sign a waiver.

What is the difference between UM and UIM?

UM coverage generally applies when the at-fault driver has no liability insurance. UIM coverage generally applies when the at-fault driver has insurance, but the available liability limits are insufficient to cover the damages.

Does UIM cover medical bills?

UIM bodily injury coverage may provide benefits for covered bodily injury losses, but the exact coverage and amount depend on the policy and applicable law.

Can passengers benefit from UIM coverage?

California Department of Insurance materials explain that uninsured/underinsured motorist bodily injury coverage can provide benefits for the insured and people in the insured vehicle, subject to the policy and applicable law.

What happens if the other driver's insurance is not enough?

If the at-fault driver's liability coverage is insufficient to cover the damages, applicable UIM coverage may provide an additional source of recovery, subject to the policy's terms and limits.

How do I know if I have UIM coverage?

Review your automobile insurance declarations page and policy documents. You can also contact your insurance company or agent and ask specifically about your uninsured/underinsured motorist bodily injury limits.

Can I have UIM coverage even if I have health insurance?

Potentially, yes. Health insurance and UIM coverage serve different purposes. Health insurance may help pay covered medical expenses, while UIM coverage may provide benefits for covered bodily injury losses under the applicable auto policy. The interaction between different sources of payment can depend on the circumstances.

What if the insurance company denies or undervalues my UIM claim?

If you believe your UIM claim has been improperly denied or undervalued, consider having the policy and claim reviewed by an experienced California insurance or personal injury attorney. The facts, policy language, and applicable law will determine what options may be available.

Why UIM Coverage Matters for Bay Area Drivers

Collisions happen every day throughout the Bay Area, including Oakland, San Francisco, Alameda County, and surrounding communities.

When an accident causes significant injuries, the other driver's insurance limits may not be enough to address all of the resulting losses.

Understanding your own insurance coverage before a collision occurs can help you know what protection may be available if you are injured by an underinsured driver.

How Mercado & Sacramento, PC Can Help

If you have been injured in a California car accident and believe the other driver's insurance may not be enough to cover your losses, Mercado & Sacramento, PC can review the circumstances of your accident and the insurance coverage involved.

Our team can help evaluate issues such as:

• Liability for the collision
• The available insurance coverage
• Your UIM policy and applicable limits
• Medical treatment and injuries
• Lost wages and other losses
• Potential insurance claims and settlement issues

Every accident and insurance policy is different. A review of your specific circumstances is necessary to determine what options may be available.

Call Mercado & Sacramento, PC at (510) 340-4LAW for a free consultation.

No fee unless we win.