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Do I Really Need UM Insurance in California?

Uninsured Underinsured Motorists Having an Accident
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Many of our clients have questions about uninsured motorist (UM) insurance:

  • Do I need it?
  • What does it do?
  • How much does it cost?

This article will explain the basics of how UM insurance works in California, and why you should have it. (If you live in another state, the requirements may vary.) We will also discuss UM’s cousin, UIM (underinsured motorist) coverage.

What Is Uninsured Motorist Coverage?

Despite the strict penalties in California for driving without proper insurance, it turns out that a sizable percentage of drivers on our roads are either not insured, or don’t carry adequate coverage. Uninsured motorist coverage is insurance coverage designed to cover the policyholder in the event of not-at-fault collision with an uninsured motorist.

How Many Drivers Lack Proper Insurance?

The Insurance Information Institute estimates that 12.6% of American motorists are uninsured. The state with the most uninsured motorists is Oklahoma, where fully 25.9% of drivers on the road are uninsured. The state with the lowest percentage of uninsured motorists is Massachusetts, with only 3.9% of drivers uninsured.

In California, approximately 14.7% of motorists are uninsured. The National Safety Council estimates that more than three thousand people are killed every year on California roads. Thousands more are injured or suffer severe property damage. And if 1 out of every 7 California drivers is uninsured, that’s a lot of accidents involving drivers with no insurance.

Why Are There So Many Uninsured Motorists?

Auto liability insurance is mandatory in 49 out of 50 states and in the District of Columbia (the exception is New Hampshire). In California, you may have your license suspended, face an expensive fine, or even lose your car. Punishments in other states vary, but most are just as harsh. So why would any driver want to risk this?

Some people make a genuine mistake and allow their insurance to lapse. Unfortunately, many people choose not to comply with these laws, or cannot afford to buy auto insurance. A study of uninsured motorists conducted by the Financial Responsibility and Insurance Committee found that 82 percent of those surveyed either listed affordability as the primary reason for not having insurance on their vehicle, or said the vehicle is inoperable/not in use.

What Happens If I Get in a Crash with an Uninsured Motorist?

Ordinarily, if you were in a multi-vehicle accident and the other driver was at fault, you would file a third party claim with the other driver’s insurance provider.

But if the other driver has no insurance provider, your only option is to directly file a lawsuit against the responsible driver, to make them pay for the damages they caused you.

But understand that when a driver doesn’t have auto insurance, it is typically an indication that he or she cannot afford it. So, while you have a valid claim, you still may not be compensated: in our legal system, people who lack assets to pay personal injury damages are basically “judgment proof.”

Uninsured motorist coverage protects you in this situation. After you are in an accident with an uninsured driver, you file a first party claim against your own insurance company, from which you bought the UM coverage. If you can prove that the other driver was uninsured, then you will be able to collect damages from your insurance company, up to the limits of your UM policy.

There are two types of uninsured motorist coverage: bodily injury coverage and property damage coverage. Bodily injury coverage will pay for your medical bills in the event of a collision with an uninsured motorist, and property damage coverage will pay for any damage to your car, and may also cover other property which was damaged or destroyed in the accident. You can buy either, or both, of these types of UM coverage.

For many clients, UM coverage has been a veritable lifesaver. It allows drivers who are in collisions with at-fault uninsured drivers to collect some or all the damages to which they are rightfully entitled, when otherwise they would have been able to collect nothing.

What About UIM Coverage?

UIM coverage stands for underinsured motorist coverage, and it is used in situations when you are in a collision with an at-fault driver who did have liability insurance, but whose insurance was not enough to cover your damages (even if it met the legal policy limit requirements).

If the other driver’s liability insurance limits have been exhausted, but you still have damages that have not been covered, then you can file a UIM claim with your own insurance company and recover additional damages. However, you will only be able to recover UIM damages if your UIM policy limits are above the liability insurance limits of the other driver. If their liability limit is $30,000, for instance, and your UIM limit is $30,000, you won’t be able to recover any UIM damages. But if your UIM limits are $50,000, then you will be able to recover additional damages up to $20,000.

As with UM coverage, UIM coverage can be divided into two different categories: bodily injury coverage and property damage coverage, and you may purchase either or both.

Are UM and UIM Coverage Mandatory or Optional?

In California, UM coverage and UIM coverage are optional for drivers. Insurance companies are required to offer UM coverage to their clients in California, but it is entirely the driver’s choice whether to accept the policy.

This isn’t true in all states. 23 jurisdictions, including the District of Columbia, require all motorists to buy UM coverage. The largest states where UM coverage is mandatory are New York and Illinois. Even in these states, however, the precise requirements differ. The legally mandated policy limits vary from state to state. Also, some states only require UM bodily injury, but not property damage, and some require UM coverage, but not UIM. Other states do not require UM coverage, and (unlike California) do not even require insurers to offer it.

If you’re outside of California, you should check your state laws before buying insurance or turning down UM coverage. As a California driver, the choice is all yours — but we recommend you get it.

How Much Does UM Coverage Cost?

Since California only has an average number of uninsured motorists, UM coverage here isn’t too expensive. (It’s much higher in states like Oklahoma with a lot of uninsured drivers on the road, and lower in states with fewer uninsured drivers.)

Of course, it depends on your policy, but UM coverage usually won’t cost more than 10% or so of your total policy. This typically adds up to a few dollars a month, or perhaps a hundred extra dollars a year, to protect you and your family from the potential financial devastation that comes with being hit by an uninsured driver who may also be poor enough to be “judgment proof.”

What about UIM coverage? It might not be as necessary as UM coverage, but it can dramatically increase the amount of damages you can recover.

Is “Stacking” Insurance Allowed in California?

California is one of the states where stacking insurance is banned.

Stacking is a method by which you can increase the limits of your UM or UIM policy, so that it covers more than it would have otherwise.

In states that allow stacking, there are a couple of ways stacking can be done: by covering multiple cars on a single UM/UIM insurance policy, you can multiply the policy limits by the number of cars you have on that policy. You can also file claims with multiple UM/UIM coverage policies. Together, these policies combine to provide you with the full amount of your damages, or as much as they can collectively cover.

Different states have different restrictions, so before attempting to stack in any state, you should consult with an attorney and find out whether it is legal, and if so, how to do it properly.

How Do I File a UM Insurance Claim?

If you are filing an uninsured motorist claim in California, you will typically need to file an SR-19C form. This is the form by which you obtain documentation from the DMV proving that the other driver was uninsured. You can read about that here.

Unfortunately, even if you file the SR-19C form, it can still be a struggle to get your insurance company to accept a UM claim. This is why, if you are filing a UM claim, you may need a lawyer on your side to increase your leverage in negotiations with your insurance company.

If your insurance company is challenging your UM or UIM claim, contact TorkLaw. We are on your side.

Reza Torkzadeh - California Personal Injury Lawyer

A highly regarded and well-respected trial lawyer, author and speaker, Reza Torkzadeh is the founder and managing attorney of TorkLaw – a premier plaintiff’s personal injury law firm specializing in complex catastrophic injury and wrongful death cases.

Reza’s performance in and out of the courtroom has earned him several of the industry’s top awards and professional recognitions, and a reputation as an elite litigator. He has earned millions in settlements, verdicts, and judgments for his clients.

If you would like a free consultation, please contact us today.

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