I ride my bicycle around the city to get around. Some of my friends have told me to get UIM insurance. Can you tell me what it is and whether this extra insurance is worth it?
— Tanner C., San Francisco
While California requires that all drivers have insurance, the harsh reality is that many on the road do not have it. And the liability coverage that you have does not cover injuries that you suffer.
Suppose you are in an accident with a driver without insurance or with inadequate insurance to cover your damages. In this case, uninsured and underinsured motorist insurance would come into play.
Uninsured-motorist coverage applies if an at-fault driver does not have valid liability insurance (California Insurance Code, section 11580.2(b)). You can submit a claim to your insurance carrier for damages you would have asserted against the at-fault party.
It might also apply if you are injured in a hit-and-run, since California presumes hit-and-run drivers are uninsured. The hit-and-run accident must meet specific conditions, including actual physical contact with the car and filing a police report within 24 hours.
UM coverage covers losses and expenses up to the amount of your UM policy limit. When it applies, UM compensates for medical expenses, pain and suffering from your injuries, and past and future lost earnings. It typically does not apply to property damage (collision coverage generally does). You may purchase uninsured-motorist property damage coverage separately. If you have collision coverage, you may not need UMPD since collision coverage typically covers vehicle damage regardless of who caused the accident.
Underinsured-motorist coverage is insurance coverage that applies in cases in which the at-fault driver has insurance, but the coverage amount is insufficient to cover your losses — so, this is coverage from your own policy that applies in addition to the at-fault driver’s insurance. You must first use or exhaust the other driver’s insurance before your own UIM coverage can be applied.
In California, UIM insurance covers the difference when the other driver has insurance in an amount that is less than your own UM/UIM limits and the value of your losses exceeds that amount. It will pay up to your own policy’s limits (Insurance Code section 11580.2(p)(2) and (p)(4)). So, it applies if you are injured, the other driver’s insurance is inadequate to cover your expenses and your policy limits are higher than the other driver’s policy limits.
It is critical to read and understand what your specific policy covers and what requirements must be satisfied to claim UM and UIM coverage. Generally, UM and UIM coverage extends to protect the named insureds of the policy, and the spouse and relatives of the named insured who reside in the same household, even if you are riding a bike or a pedestrian.
Your coverage not only applies to you as the driver but also to your passengers, anyone else who drives your car with your permission, and even to heirs and any other individuals who are in, entering, exiting, or in contact with the insured vehicle. However, it is important to note that coverage generally includes a position of contact with the vehicle, including standing at or close to the car door, but might or might not be covered depending on the specific circumstances and facts of what happened (Insurance Code section 11580.2(b)).
Getting UM/UIM coverage is arguably the most important and valuable thing you can do to protect yourself and your family members in the unfortunate event of an accident. It protects drivers, pedestrians and bicyclists. Without getting UM/UIM coverage on your policy, you might be responsible for medical expenses and other losses out of your own pocket if an uninsured or underinsured driver injures you in an accident.
This article is not a full summary of the Uninsured Motorist Act and the applicable statutes and rules that apply. Also, every insurance company and policy is different, so — as mentioned above — it is critically important that you read and understand any policy or coverage that you purchase. As with all insurance, many nuances, limitations and exclusions cannot be fully explained here, as it would be impossible to cover everything about UM and UIM coverage in this article. Remember, an insurance policy is a legal document, and it is important that you understand it.
We strongly urge you to contact us at Dolan Law Firm to ensure you are fully compensated for your injuries and damages if you are in an accident. We are here to help!