How Does Underinsured Motorist (UIM) Coverage

Work in California?

Updated: February 20, 2020

Did you know that many California drivers carry only the minimum auto insurance coverage? If you get into an accident with an underinsured driver, their insurance might not be enough to cover your medical bills, lost wages, and other damages. That’s where Underinsured Motorist (UIM) coverage comes in.

What Is Underinsured Motorist (UIM) Coverage?

UIM coverage is a type of auto insurance that protects you when you’re involved in an accident that isn’t your fault, but the at-fault driver doesn’t have enough insurance to cover your damages.

Without UIM coverage, you might have to pay out of pocket for medical expenses, rehabilitation, and lost wages—even if the other driver was responsible for the crash.

Why UIM Coverage Is Essential in California

California law requires drivers to have a minimum liability insurance policy of:

✔️ $15,000 per person for bodily injury

✔️ $30,000 per accident for multiple injured parties

However, the cost of medical treatment, physical therapy, lost income, and pain and suffering can quickly exceed these limits, leaving you with little to no compensation.

🚨 Here’s a common scenario:

Imagine you’re involved in a car accident, and your medical expenses, lost wages, and pain and suffering total $75,000. The at-fault driver only carries the minimum $15,000 coverage.

If you don’t have UIM coverage, you’ll only receive $15,000, even though your damages far exceed that amount.
If you do have UIM coverage with a $100,000 policy limit, you could claim the remaining $60,000 from your own insurance—fully covering your losses.

How Does UIM Coverage Work?

To use your Underinsured Motorist benefits in California, the following conditions must be met:

✔️ Your UIM policy limit must be higher than the at-fault driver’s liability coverage.

✔️ Your claim must exceed the at-fault driver’s liability coverage.

✔️ The at-fault driver’s insurance must be fully paid out, meaning their entire policy limit must be exhausted before you can file a UIM claim.

Many people assume they’re automatically covered after a crash, but standard auto insurance policies do not include UIM coverage unless you opt in.

How Much UIM Coverage Should You Have?

California law does not require drivers to carry Underinsured Motorist coverage, but having it can make a huge difference in your financial recovery after an accident.

Most experts recommend getting at least $100,000 per person/$300,000 per accident in UIM coverage, but if you frequently drive in high-traffic areas like Oakland, San Francisco, or the Bay Area, consider increasing your limits to $250,000 or more.

💡 Remember: Medical bills from severe injuries—like spinal cord damage or traumatic brain injuries—can easily exceed $100,000, making higher UIM limits a smart investment.

Does UIM Coverage Affect Your Insurance Rates?

Adding UIM coverage to your auto insurance may slightly increase your premium, but it’s a small price to pay compared to the financial burden of an underinsured driver hitting you. Many drivers find that their UIM policy costs less than $10 per month, depending on their coverage limits and driving history.

In short, paying a little extra for UIM coverage now can save you tens of thousands of dollars later.

Don’t Let an Underinsured Driver Leave You Unprotected

If you’re involved in a car accident in California, having Underinsured Motorist (UIM) coverage can mean the difference between full compensation and financial hardship.

At Mercado & Sacramento, PC, our experienced auto accident attorneys help clients maximize their insurance claims and fight for the compensation they deserve.

📞 Call us at (510) 340-4LAW for a free consultation today!

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