Uninsured & Underinsured Motorists
When a Bay Area resident doesn’t have enough insurance, or doesn’t have any valid auto insurance to cover a personal injury claim, the injured person’s own auto policy can provide coverage. This is true even when the injured person was not driving a car at the time of the incident. People hit while biking, walking, and even sitting inside their own homes have been covered under uninsured motorist coverage. The key to coverage is that the harm is caused by an “uninsured motorist,” or an “underinsured motorist.”
California Law Requires Drivers to be Insured
California law requires that every car insurance policy offer uninsured motorist coverage. Most often this coverage has limits that match the liability limits of the auto policy. Although the uninsured motorist limits are sometimes less than the liability limits, they will never exceed the liability limits. This same coverage can pay a claim when there is no insurance for the party at fault, or fill the gap when that party has insufficient coverage, when it is called “underinsured motorist coverage.”
California Insurance Limits Remain Unchanged Since 1967
Since 1967, California law (Insurance Code §11580.1b) has set the minimum automobile bodily injury liability limits at 15/30–$15,000 per person, and $30,000 per occurrence. Only Florida and Ohio have lower limits, and California’s limits are lower than those in Texas, New York, Alabama, Mississippi, etc. Due to this very small amount of required coverage, and the large number of uninsured drivers, uninsured motorist and underinsured motorist coverage often comes into play in car accident cases in the Bay Area and throughout California.
In an uninsured motorist claim for bodily injury, you are entitled to recover just about everything that you could get in a claim under the other party’s insurance. Your own insurance carrier, however, owes you a duty of “good faith and fair dealing,” so you are in a better position to be treated fairly in settlement. If a fair settlement cannot be reached, UM and UIM cases go through the same “discovery” phase that a lawsuit would, but if even this does not lead to a settlement, they are resolved in a binding arbitration, rather than a jury trial.
Unfortunately, California law applies UM policy limits against the total recovery, so that, for example, if there is a partial recovery from the party at fault, the amount available from the UM carrier will be reduced by the amount of the partial recovery. There have been attempts to pass legislation to make UM insurance carriers liable for the full amount of coverage that was purchased–as they are in other states–but so far these efforts have been defeated by the insurance industry.
Settling a Case Against an Uninsured Motorist
In an uninsured motorist case, the insurance company will typically attempt to recover from the party at fault after paying a settlement or arbitration award. Selecting a fair arbitrator is key to these cases. Usually the arbitrator selection can be done cooperatively between the attorneys, but a court petition to appoint an arbitrator is available when a carrier is unreasonable. The hearing of a uninsured motorist arbitration case is faster and simpler than a jury trial, although all the same evidentiary rules apply. Both parties must split the cost of the arbitrator, and the ruling typically comes in the mail a few days or weeks later.