Uninsured and Underinsured Motorist Coverage is Most Important in Your Auto Policy

By: Guy O. Kornblum, Certified in Civil Trial and Pretrial Practice Advocacy, National Board of Trial Advocacy; Member, Multi-Million Dollar Advocates Forum

A most important insurance protection for you, your family and passengers in your auto is that which covers you or them in the event you are hit by a wrongdoing uninsured or underinsured motorist.  Why?

In California, it has been estimated that 1 in 4 motorists are driving on the highways uninsured or underinsured, that is without adequate liability insurance protection.  What this means is that they either have no insurance or not enough to cover any responsibility they have as a negligent driver who injures others.

So, if this is the case, how do you protect yourself and passengers in your auto if anyone is injured in an accident with someone driving without adequate insurance protection?  There are really two ways.

First, in your auto policy there is a special coverage for “medical payments.” This coverage pays for medical bills for anyone in your auto who is injured while riding in your car.  It has nothing to do with fault.  If the bills are incurred for medical expenses resulting from an injury in an auto accident, those bills are paid for under this coverage. So, you should get a high limit for this coverage.  I recommend at least $25,000 and higher if you can purchase such.  While this coverage may duplicate coverage you may have under a health insurance policy, either individual or through your employment, it is additional insurance coverage for the high medical expenses that can result from a serious injury.  The $25,000 limit is per person, so it can really help in serious cases.

In addition, you should purchase uninsured AND underinsured motorist coverage in the highest amounts you can.  I recommend at least $300,000 per person and $500,000 per accident.   I also recommend that you purchase even higher limits if you have an excess policy, because you can add that to what is available under the policy in the event of a catastrophic injury.

Now, here is how all this works.

First of all, your insurance company must offer you both coverages (which are separately stated in your policy) in the same amounts as your liability coverage (the protection that applies if you are the negligent driver and have responsibility to others for their injuries).   In order to eliminate or lower the limits of this insurance protection, you must sign a written waiver form confirming the change.  I highly recommend you NOT do this.

If you are hit by a negligent motorist without any insurance protection − either because none was purchased or the insurance company has a valid defense against coverage − then your uninsured motorist coverage kicks in. Your insurance company then stands in the shoes of the uninsured driver and becomes, in a sense, that uninsured driver’s insurance company.  So, if you have $300,000/$500,000 limits, each of the persons in your car can seek as much as $300,000 from your insurance company, subject to the maximum collective limits of $500,000.  Each of them would also have the medical payments coverage for medical bills.

Underinsured motorist protection works similarly.  However, what triggers the coverage is a bit different from uninsured motorist protection.   Here is how it works.  Your vehicle is hit by a wrongdoing motorist with minimum limits of $15,000 per person and $30,000 per accident.  However, your injuries are much worse.  You have coverage of $300,000 per person and $500,000 per accident.  You claim injuries that exceed $300,000 including past and future medical expenses, wage loss, and pain and suffering.   The insurer for the wrongdoing motorist accepts liability and pays the $15,000.  You then have $285,000 left on your underinsured motorist coverage to collect against your own insurer, plus you would have any medical payments coverage for medical bills incurred for injuries suffered in the accident.

One major aspect of uninsured motorist and underinsured motorist coverage is how disputes are resolved.  Under California law, any disputes with your insurance company as to whether and how much you are entitled to recover must be resolved by binding (no appeal) arbitration.  A single neutral arbitrator, usually a retired judge or experienced attorney, will hold a full hearing with you and your insurance company having the right to present evidence just as if you were in court.  Rather than a sitting judge or jury deciding the factual issues and the amount of any damages, the arbitrator makes that decision.   The parties have full rights to conduct pre-trial discovery, including taking depositions, submitting written requests for information, and even obtaining a medical exam (the insurance company) of the claimant (insured), and each party has a right to have counsel represent them, which is the normal circumstance.

The important point is that you have this protection in the first place.  It is a critical part of the full picture if you want to make sure that you and your family have the insurance you need to cover the significant financial losses when a serious injury occurs on the streets and highways with those who irresponsibly fail to adequately cover themselves against their negligent driving which results in injury to others.

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