Used when the individual at fault for the accident does not have insurance, or if the accident is a hit-and-run. Basically, your UM policy stands in place of the other driver.
Used when the individual at fault for the accident has insurance, but does not carry a policy big enough to cover your damages.
California state law requires all drivers to carry a minimal auto-liability policy of $15,000/$30,000. (Your insurance will pay no more than $15,000 for injuries per person and $30,000 per accident). However, an estimated 1 in 5 California drivers were uninsured in 2010. This number is only expected to increase as unemployment remains high. Furthermore, an estimated 1 in 3 drivers are underinsured. This number includes motorists meeting the minimum policy limits mandated by the state. But many accidents, especially those with multiple injured parties, exceed these limits easily. People who have no insurance or are underinsured, typically do not have any assets to pursue in court. That makes it nearly impossible to recover damages and increases the risk that you will have to pay for any additional losses yourself.
UM/UIM coverage is part of a complete auto insurance policy. Not carrying this vital insurance on your policy exposes you to significant financial risk each time you drive. Uninsured drivers are subject to fines and Proposition 213 prevents them from collecting compensation for pain and suffering after an accident. But there are no protections in place for insured drivers injured physically and financially by an uninsured motorist. Protection starts and ends with you. Liability insurance protects others from you; UM/UIM insurance protects you and your family from other drivers.
Unfortunately, many defendants have little or no auto insurance. The firm recently had a case where a client was severely injured in an accident and incurred medical bills of over $70,000. The defendant carried the minimum coverage required in California: only $15,000, which did not begin to cover the current and future medical expenses of my client.
Thankfully, we were able to collect the client’s full UIM policy of $100,000 for his injuries. We echo the advice of the Insurance Institute and recommend UM/UIM coverage of at least $100,000/$300,000 to protect yourself and your loved ones. This coverage is a few extra dollars a month, but can mean the difference between receiving compensation for medical care and damages, and incurring significant debt. Invariably, every employee that joins my firm calls their insurance company within weeks to obtain or increase the UM/UIM coverage on their auto policy. They see first hand the difference that this extra coverage can make.
Many people worry that reporting an accident to their insurance carrier will raise their rates, but this is not the case. If you’re not at fault, your insurance company will not and cannot raise your premiums for using your UM/UIM coverage. But UM/UIM coverage is not always enough – be wary of putting too much faith in your assigned adjuster or claims representative. Regardless of fault, you should always consider hiring an attorney if you’ve been involved in a motor vehicle accident. While your insurance company does have a fiduciary duty to fight on your behalf, they are also responsible to their investors. At the end of the day, improving the company’s bottom line is more important than protecting you after an accident.
Don’t be fooled into thinking that your favorite insurance agent can do anything to help when you file a claim with the insurance company. That is like expecting your friendly real estate agent to help negotiate with your homeowner’s insurance after your house burns down. But you can count on Bergener Mirejovsky to fight for what is right. We strongly urge you to prepare for the worst by adding UM/UIM coverage to your policy today. This is common sense protection that can help you recover physically and financially from an unexpected accident.