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What to know about UM/UIM coverage

On Behalf of | Nov 18, 2021 | Automobile Accidents

While most states require people to have liability insurance to cover drivers, some individuals still don’t have it. Stats show that one in eight U.S. drivers, or 32 million overall, drive without the minimum coverage. You may wonder what happens in Southern California if you get hit by an uninsured(UM)/underinsured (UIM) motorist.

Uninsured/uninsured motorist protection

This type of insurance is a special coverage that pays for damages if you get into a car accident with uninsured/underinsured drivers. Underinsured motorist protection covers you when the at-fault driver’s policy limit isn’t enough to cover damages.

Some states require underinsured/uninsured motorist protection as part of the standard policy, but California does not require it. However, providers must offer it. These coverages pay for lost wages, medical bills, funeral costs, and pain and suffering, and some states offer UIM/UM property damage coverage. Unlike UM, UIM motorist protection doesn’t usually pay to repair your vehicle, so you need collision insurance to cover it.

When to file claims

If you find that a driver with whom you get into an accident doesn’t have insurance, inform your provider that you will file a UM claim. However, if the claim is more than the policy limit, you’d have to sue the driver for the remainder.

If the driver is underinsured, you file a claim with the adverse driver’s provider for the policy limits. Then after recovering the full limits from the adverse driver’s provider, you proceed to file with your provider in UIM, potentially for the UIM limits minus amounts already recovered from the adverse driver’s policy. For example, assume your damages total $100,000, the driver’s insurance has a $50,000 limit, and your insurance has $100,000 in UIM coverage. In this scenario, you would pursue the $50,000 from the driver, and then, once you recover that $50,000, you would go after the remaining $50,000 from your provider in UIM. Note that you can’t stack to try to recover $100,000 from your UIM provider on top of the $50,000 you recovered from the adverse driver’s provider.

Some insurance providers are willing to settle out of court to avoid costly and lengthy trials. However, in the case of uninsured drivers, there is no adverse insurance provider to go after and uninsured drivers often have few or no assets. This makes it tricky to sue them individually, so it’s best to add UIM/UM coverage.