It’s true that driving alongside uninsured motorists poses a significant risk on the road. Uninsured motorist car insurance coverage becomes crucial in such situations, as it provides financial protection for you and your passengers if you’re injured in an auto accident caused by an uninsured driver.
Uninsured motorist coverage typically helps pay for medical expenses, lost wages, and other damages resulting from the accident, up to the limits specified in your policy. This coverage essentially steps in to compensate for the damages that the uninsured driver would have been responsible for if they had adequate insurance. Given that approximately one in eight motorists is uninsured, understanding how uninsured motorist coverage works and ensuring that you have adequate coverage in your auto insurance policy is essential for protecting yourself and your passengers on the road. It provides a crucial safety net in situations where you may otherwise struggle to recover damages from an uninsured driver.
In California, insurance companies are required by law to offer uninsured motorist coverage to their policyholders. If a policyholder chooses to decline this coverage, the insurance company must obtain a signed written waiver from the policyholder acknowledging the decision to decline the coverage.
However, even if a policyholder initially declines uninsured motorist coverage and does not provide a signed waiver, California law stipulates that they will still be afforded the coverage by default. This means that in the event of an accident involving an uninsured motorist, the policyholder may be eligible to receive uninsured motorist benefits from their insurance company, even if they initially declined the coverage.
This provision in California law ensures that individuals are not left without protection in situations involving uninsured motorists, providing a safety net for policyholders who may find themselves in such unfortunate circumstances.
Uninsured motorist (UM) coverage is an integral part of an automobile insurance policy that offers protection in the event of an accident involving an uninsured driver. If you possess UM coverage, it will compensate for any injuries sustained by you and your passengers, and in certain cases, it may also cover damages to your vehicle. While certain states mandate the inclusion of uninsured motorist coverage in auto insurance policies, others provide the option to add UM as an endorsement to your policy.
How Uninsured Motorist Coverage Works
State laws across the United States mandate that drivers must have some level of automobile liability insurance coverage, with requirements differing from one state to another. New Hampshire stands as the sole state that does not enforce a minimum amount of auto insurance coverage, while Virginia allows drivers to opt out for a fee.
Despite these regulations, statistics from the Insurance Research Council show that approximately one in every eight drivers in the U.S. does not possess insurance. The organization’s latest report, published in 2021, revealed that Mississippi had the highest percentage of uninsured drivers at 29.4%, followed by Michigan, Tennessee, New Mexico, and Washington. Conversely, New Jersey had the lowest rate of uninsured motorists at 3.1%.
Due to the potential risks associated with colliding with an uninsured driver, over half of the states in the U.S. in addition to Washington, D.C. mandate that auto insurance policies include uninsured motorist coverage.
In certain circumstances, several states require uninsured motorist coverage, such as when selecting a liability limit higher than the state minimum. If you find yourself in an accident where the other driver is at fault but lacks insurance, your uninsured motorist coverage can assist in covering vehicle repairs or medical expenses. This coverage also applies to hit-and-run incidents, ensuring that repairs are taken care of. However, without uninsured motorist coverage, you may not receive any compensation, even if the other party is at fault or it was a hit-and-run situation.
In California, vehicle owners are required to show proof of financial responsibility for any vehicle they own. This is to ensure that there is coverage in case of injury to others or damage to property. The most common way to meet this requirement is by having auto liability insurance. Failure to purchase this insurance can result in fines, license suspensions, or even having the vehicle impounded. Apart from the standard liability coverage, it is also possible to pay extra premiums for underinsured and uninsured motorist insurance. These policies provide coverage for accidents involving drivers who either have no liability insurance or have inadequate coverage.
Uninsured and Underinsured Coverage Options
Uninsured/underinsured motorist coverage (UMC/UIM) is a component of your California auto insurance policy unless you explicitly opt out in writing. This coverage steps in when another driver:
– Is responsible for the accident but lacks insurance
– Has insufficient insurance to cover your medical expenses and other losses
– Flees the scene in a hit-and-run scenario and cannot be located.
California law mandates a minimum liability insurance of “15/30/5,” which covers:
– $15,000 for bodily injury or death per person
– $30,000 for total bodily injury or death per accident (for all individuals in the other vehicle combined)
– $5,000 for property damage to the other vehicle (collision coverage).
However, these minimums may not suffice to cover damages in many accidents, especially considering that approximately one in six motorists in California has no insurance.
UMC/UIM coverage enables you to pursue damages for medical expenses, lost wages, car repairs, pain and suffering, and other losses resulting from injuries caused by an uninsured or underinsured driver.
Uninsured motorist coverage (UMC) includes compensatory damages (up to the policy limit) if you are:
– Hit by an uninsured driver
– Involved in a hit-and-run accident where the driver flees the scene without being identified.
UMC consists of uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD), ensuring you receive compensation even if the at-fault party cannot pay.
Underinsured motorist coverage (UIM) comes into play when your damages exceed the at-fault driver’s policy coverage. UIM covers the difference between your total damages and the at-fault driver’s policy limit, up to your policy limit.
It’s important to note that your UIM payment may be reduced if you have other insurance sources covering your losses, such as workers’ compensation insurance, the at-fault driver’s employer’s insurance, the vehicle manufacturer’s insurance (in product liability cases), or optional coverage like Med-Pay (Medical Payments Coverage).
Both UMC and UIM coverage are mandatory parts of your car insurance policy in California unless you waive them in writing. This coverage is crucial as the minimum required automobile insurance in California may not be sufficient to cover damages in significant accidents.
Do I need uninsured motorist coverage?
Insurance companies are obligated to provide uninsured/underinsured coverage options to potential policyholders. However, individuals who opt not to purchase this coverage must sign a waiver indicating their decision.
How Much Does Uninsured Motorist Coverage Cost?
Uninsured motorist coverage typically carries an average annual cost of $136, as per Forbes Advisor’s analysis.
This coverage includes:
– Uninsured motorist bodily injury (UMBI) at an average cost of $136 per year.
– Underinsured motorist bodily injury (UIMBI) at an average cost of $90 per year.
– Uninsured motorist property damage (UMPD) at an average cost of $36 per year.
– Underinsured motorist property damage (UIMPD) at an average cost of $46 per year.
(Source: Quadrant Information Services. Rates are based on uninsured motorist coverage of $100,000 per person/$300,000 per accident.)
It’s important to note that uninsured motorist coverage cannot be purchased independently. It must be accompanied by at least a basic auto insurance liability policy.
How to Buy Uninsured Motorist Coverage
UM coverage is mandatory in certain states, while in others, you have the option to decline it in writing or it may not even be available. It is important to familiarize yourself with the auto insurance requirements specific to your state.
The limits for UM coverage should align with your liability limits. For instance, if your liability limits are set at 100/300 ($100,000 for injury to one person in an accident and $300,000 per accident), then you should purchase 100/300 in UM coverage.
In select states, you have the opportunity to purchase UMPD coverage and underinsured motorist property damage (UIMPD) coverage. These types of coverage protect your own vehicle in the event of a collision with an uninsured or underinsured motorist.
To acquire UM coverage, follow these steps:
1. Confirm whether UM coverage is required by your state for your car insurance policy.
2. If not mandatory, determine if you wish to include it as optional coverage.
3. If opting for UM coverage, ensure that the limits match your bodily injury liability limits.
4. Decide on other coverages and limits you desire for your car insurance policy.
5. Compare prices from various insurance companies to find the best deal.
6. It is advisable to obtain car insurance quotes from multiple companies for all desired coverage types. You can begin by consulting Forbes Advisor’s ratings of the top car insurance companies.
How much can I get from an uninsured motorist claim?
If you’re involved in a car accident where an uninsured motorist is at fault and you have uninsured motorist coverage, you can seek compensation for your injuries up to the policy limits. While California law mandates minimum coverage of $15,000 per person for injuries and $3,500 for property losses, many motorists in the state carry insurance with higher limits. The amount you can receive from an uninsured motorist claim will be determined by the limits of your policy.
If you’re unsure about or don’t fully understand your policy limits, it’s advisable to consult with an experienced California car accident attorney. They can provide clarity on your specific coverage and offer guidance on the ideal uninsured motorist coverage you should carry.
What to do in case of a car accident with an uninsured driver
Californians who have obtained uninsured or underinsured motorist coverage must take certain steps after a collision to safeguard their right to file a claim. In general, it will be necessary to initiate legal action against the responsible driver within two years of the incident, request arbitration of the claim with the insurance company, or reach a mutually acceptable settlement. It is crucial to understand that compensation is only possible if the at-fault driver is indeed uninsured or if the underinsured motorist policy held has a higher coverage limit than the liability policy of the responsible driver.
According to California law, the insurance companies of accident victims receive a credit for the amounts paid by the responsible driver’s own policy. Therefore, before a victim can receive additional funds from their underinsured motorist policy, they must demonstrate that the limits of the other driver’s policy have already been exhausted. Once this is established, the victim’s insurance carrier will cover the difference between that amount and the victim’s own policy limit. Compensation may include medical expenses, lost wages, and property damage.
Certain uninsured and underinsured motorist policies may allow claims to be made when the policyholder is a pedestrian, driving a rental car, or riding a bicycle. Coverage may also extend to the policyholder’s passengers and individuals driving their vehicle with permission. In cases where the at-fault individual cannot be identified, hit-and-run incidents are typically handled as uninsured motorist coverage claims. In all such situations, the guidance of a skilled and knowledgeable car accident attorney in Los Angeles can be instrumental in securing financial recovery and alleviating ongoing financial uncertainty for the victims.
What is the average uninsured motorist settlement in California?
The approximate amount of compensation for a car accident claim in California is around $24,000. This range also applies to settlements for claims involving uninsured motorists. Nevertheless, it is important to note that this average figure does not take into account the unique circumstances of each individual accident. With over 147,000 accidents occurring annually, a significant number of these incidents result in claims and settlements that surpass the average amount. The specific value of your claim will depend on various factors such as medical expenses, lost income, property damage, and other aspects related to your injuries and losses.
Can I sue an uninsured driver for car accident damages?
In instances where an uninsured driver’s negligence leads to a severe accident, the resulting extensive injuries, rising medical expenses, loss of income, and other forms of damage can push entire families to the brink of collapse. If a prompt resolution to an insurance claim proves difficult to attain, victims may need to consider the possibility of initiating a lawsuit.
Insurance companies have gained a reputation for their reluctance to provide fair compensation for claims, despite policyholders faithfully paying premiums on time for years. Exploiting victims’ lack of resources or unwillingness to engage in a fierce legal battle, these companies often choose to deny valid claims. Unfortunately, it is also common for insurers to employ tactics aimed at frustrating policyholders, such as intentionally delaying claim settlements. In such situations, a dedicated Los Angeles attorney specializing in uninsured motorist accidents can prove to be an invaluable ally in the pursuit of justice. Pursuing a bad-faith claim against an insurance company of this nature may result in damages that exceed the usual policy limits.
What if I have health insurance?
It is highly advisable to maintain UMC/UIM insurance, even if you possess a comprehensive health insurance plan.
UMC/UIM insurance serves as a first-party coverage that enables you to seek compensation from your own insurance company for all the damages incurred after an accident that was not your fault (up to the limit specified in your policy). This coverage extends to various services that regular health insurance plans do not typically cover, such as chiropractic care and acupuncture.
Furthermore, UMC/UIM coverage can also be utilized for:
– Repairing the property damage to your vehicle,
– Compensating for the time lost at work, and
– Addressing the pain and suffering experienced.
An additional advantage of UMC/UIM insurance is that it provides coverage for both you and any family members residing in your household. This coverage applies whenever any of you are:
– Operating or occupying a car or motorcycle,
– Riding a bicycle,
– Walking as a pedestrian, or
– Engaging in activities such as horseback riding or stilt walking.
Please note that UMC/UIM insurance can only cover your friends and non-household family members if the collision occurs while they were:
– Driving your car with your permission,
– Riding as a passenger in your car,
– Exiting your car, or
– Entering your car.
How much UMC/UIM do I need?
The standard UMC/UIM coverage offered by California insurers is typically as follows:
– $30,000 for bodily injury coverage or death per person
– $60,000 for total bodily injury or death per accident (covering all individuals in the other vehicle)
– $3,500 for property damage
However, if you provide written agreement, you have the option to purchase the minimum UMC/UIM policy allowed by state law, which includes:
– $15,000 for bodily injury coverage or death per person
– $30,000 for total bodily injury or death per accident (covering all individuals in the other vehicle)
– $3,500 for property damage
Please note that in California, UMC/UIM coverage only applies if the other driver’s insurance coverage is lower than your UMC/UIM coverage. For instance, if the at-fault driver has a $30,000 liability policy and you have a $30,000 UMC/UIM policy, you would not be eligible to utilize your UMC/UIM policy. However, if your UMC/UIM policy is valued at $60,000, you could claim up to $30,000 from that policy ($60,000 minus $30,000).
If it is within your means, it is highly recommended to purchase as much UMC/UIM coverage as possible. A policy ranging from $300,000 to $500,000 is advised.
The claims process
Numerous UMC/UIM claims are resolved without the need for litigation. Upon filing a claim with your insurance company, they are mandated by the California Fair Claims Settlement Practices Regulations to promptly and thoroughly investigate the claim and make a genuine effort to reach a fair settlement.
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If your insurer unreasonably prolongs the claims process or fails to assess and settle the claim justly, you may have a basis for pursuing a bad faith lawsuit against them.
In cases where there is a disagreement between you and your insurer regarding the claim’s value, your policy might stipulate that the case be resolved through binding arbitration rather than a jury trial. During arbitration, an impartial arbitrator (often a retired judge or seasoned attorney) reviews evidence from both parties and issues a decision.
Whether you are navigating through arbitration or a trial against your insurer – both of which involve intricate legal procedures – it is recommended that you seek legal representation by hiring an attorney.
Conclusion
Uninsured motorist insurance provides coverage for medical expenses incurred by you and your passengers, as well as any damage to your vehicle resulting from an accident involving an uninsured driver. This type of insurance is mandatory in certain states, while in others, it is offered as an optional coverage. Additionally, uninsured motorist coverage safeguards you in the unfortunate event of a hit-and-run accident.