I often state that it is our recommendation that anyone owning an auto have primary liability (protection if you negligently hurt others) policy limits of $300,000 per person and $500,000 per accident. In addition, and an excess policy above that which provides at least $1 million in additional liability coverage and also if you are injured by an uninsured or underinsured motorist protection.
As to the latter, if you are injured by the negligence of a third person with no insurance or insufficient coverage to compensate you or others in the car, then your policy kicks in and provides additional coverage. For example, if you have the total of $1.5 million I have recommended, and you are injured by a negligent driver, you have that additional sum which is available to pay for your injuries. If the negligent driver has $100,000 in coverage you have $1.4 million. Your UM/UIM protection pays if a) the other driver is negligent (i.e. you have added to his or her liability protection on your policy), and b) causes injury, (i.e. medical expenses, pain and suffering).
I also stress that in order to qualify for this coverage you must purchase liability insurance in the same amounts as the UM/UIM insurance that you want. Make sure you cover this with your agent when discussing your auto policy.
Let’s discuss how the matter proceeds if the UM/UIM claim is denied or challenged. In the case of UM/UIM claims, California law mandates that these claims be arbitrated, and that the decision of the arbitrator is final and cannot be appealed except in rare cases. See Insurance Code section 11580.02.
If you have gotten this far without a lawyer, I highly recommend your engage one to represent you. What will take place now needs an experienced lawyer to guide you through the process.
Arbitration is a formal proceeding in which the parties submit their dispute to a neutral (lawyer or retired judge usually), who has authority to make a decision, based on the evidence presented. The decision of the arbitrator is binding on the parties.
One thing that might happen before an arbitration is that the parties agree to mediate the UM/UIM claim. A mediation is a meeting of the parties supervised by a “neutral”, usually a retired judge or experienced lawyer, who oversees the negotiation of the claim. By law, what takes place in preparation for, during and after a mediation is confidential. Nothing that takes place during this process can be used by any party against the other, so the parties can candidly discuss their views of the case and settlement. It is a far less expensive and risky way of resolving any dispute, including UM/UIM claims.
Arbitration involves the presentation of the case to an arbitrator much like a trial. There is no jury and the arbitrator performs the same function as a judge, and also the jury as a finder of fact. An arbitration is conducted in a private office, not in a courthouse. While it is informal in the sense that all the formalities of a court trial are not followed, it is a formal proceeding in that it follows the usually format of a trial. The presentation by both sides follows the normal court trial process: briefs are filed, exhibits presented, opening statements are made, witnesses are called (lay and experts such as medical witnesses), and when all parties have rested (i.e. finished their evidentiary presentation), the lawyers argue the case and possibly file post trial briefs.
The arbitrator then decides the case usually taking some time to review the evidence and the briefs. The decision of the arbitrator is usually written and is called an “award.” Once it is served on the parties, it can be converted to a court judgment, which then is enforceable against the defendant insurance company if the award is not promptly paid. If the award is for money in favor if the insured (it can be a zero which means the insurance company owes nothing), it should be paid promptly. Since tje arbitrator’s decision is final, there is no appeal, so to this extent it is an expedited process. If the insurance company does not promptly pay the award, it may be in “bad faith” which means the insured has a second suit for this delay or failure to pay as a separate claim.
In addition to representing our clients, Mr. Kornblum also serves as an expert witness in insurance claims and legal malpractice claims, and as a mediator. For more information contact our San Francisco office at 415-440-7800.