California law requires all drivers to carry automobile liability insurance coverage to protect others in the event of an accident. There are stiff penalties for failure to comply with the law, including the suspension of one’s driver license and the Prop 213 prohibition against recovering pain and suffering for injuries sustained in a car accident. Despite the strict statutory mandate, many accident victims are quite disturbed to find out the driver who caused the collision is uninsured. It can be equally upsetting to learn from your attorney that the other party was found to be underinsured, meaning they had coverage but in a very small amount. That is where uninsured motorist coverage comes in and protects you and your passengers.
Uninsured motorist coverage protects the occupants of the insured vehicle. It covers the owner, the driver, and all passengers. Anyone who is physically occupying an insured car or truck at the time of an accident is protected. In this way, uninsured motorist is similar to med pay, and just like med pay, it does not protect third parties such as the passengers of the other vehicle involved in the car accident.
Limits of coverage are usually the same amounts as your third party liability limits. It can be slightly less, but it is never more. For example, if your third party liability coverage is $50,000.00 per person and $100,000.00 per accident, then your uninsured motorist coverage will more than likely also be $50,000.00/$100,000.00. Your lawyer will ask you for a copy of your auto policy declarations in order to determine the specific amounts.
The other driver who caused the car accident may have insurance, but they may be underinsured. They may carry such a small amount of coverage that it is insufficient for your car accident attorney to obtain adequate compensation for your significant medical bills, pain and suffering, lost wages, and other damages, especially if you have suffered severe injuries as a result of the accident. In such a case, your uninsured motorist will usually apply. In California, automobile insurance policies are typically written with one single coverage for both uninsured and underinsured situations.
In an underinsured scenario, the coverage amount is reduced by any third party payments, at least in California. The legislative purpose of California uninsured motorist law is to give the persons in the insured car or truck the same protection they would have enjoyed if the driver of the other vehicle was insured. For example, if you carry $50,000.00 in uninsured motorist and you recover $15,000.00 from the third party who injured you, your car accident lawyer will only be able to recover a maximum of $35,000.00 under your auto policy. By law, the $50,000.00 coverage you carry is reduced by the $15,0000.00 your attorney was able to recover from the third party. The result is that if you are in an accident with an uninsured driver, the maximum amount your lawyer can recover for you is the uninsured motorist limit on your auto policy.