HOW DOES UNDERINSURED MOTORIST COVERAGE WORK IN CALIFORNIA AND SHOULD YOU GET IT?
Underinsured motorist (UIM) coverage is insurance that protects you when you’re involved in a motor vehicle accident by no fault of your own and the at fault driver’s insurance isn’t enough to cover your damages.
Often times, the at fault driver’s insurance policy isn’t enough to cover the damages from your injuries. For example, if you don’t have UIM coverage and the value of your personal injury claim is $50,000 for the pain and suffering you endured, lost earnings, medical expenses, and other related damages, but the at fault driver only has liability limits of $25,000, then all you’d be able to recover from insurance is $25,000.
If you had UIM coverage in the scenario presented above, you’d likely be able to be compensated more than $25,000, despite the at fault driver having a very limited liability coverage in light of the value of your injuries.
In California, however, there are prerequisites that are required to be met before your UIM coverage is triggered:
- Your UIM coverage must have higher limits than the at fault driver’s liability policy (i.e. your UIM coverage is $50,000 and the at fault driver’s bodily injury policy per person is $25,000);
- The value of your claim must be worth more than the at fault driver’s liability policy; and
- The at fault driver’s policy must be “exhausted,” meaning that you’re getting the full amount of the at fault driver’s policy limit.
Some drivers are hesitant to exercise the option of paying extra for UIM coverage, however, it may benefit you in the event that you’re involved in a serious motor vehicle accident and the at fault driver has a low liability policy limit. Here are some not so fun facts – In California, the minimum required coverage for auto insurance is $15,000 per person and $30,000 per accident. Reports have also shown that the average claim for bodily injuries in motor vehicle accidents exceed $15,000. This means that you could be involved in a catastrophic accident and be left with only $15,000 to cover hundreds of thousands worth of damages.
Here, at Mercado & Sacramento, PC, we know how to negotiate the best settlement with insurance companies. We’re committed to providing our clients the best representation, so they can have the best possible outcome.
If you’ve been involved in an accident, contact us now at (510) 340-4LAW.