Uninsured Motorist (UM) Coverage and How It Works

In California, automobile owners and drivers are required to have certain minimum amounts of automobile bodily injury and property damage liability insurance – bodily insurance coverage of at least $15,000 per person and $30,000 per incident and property damage coverage of at least $5,000 per incident.  Everyone should have this minimum coverage, because:

• It's required by law -- the Compulsory Financial Responsibility Law, starting in section 16000 of the California Vehicle Code. You have to provide proof of coverage in California to register your vehicle with the Department of Motor Vehicles.  Being caught driving with insurance can result in fines, and can definitely increase the cost of getting insurance later.  You can even have your license suspended for up to four years.
• It provides a negligent driver or vehicle owner with some basic legal protections if they're sued, including having a defense attorney hired and paid by their auto insurance company to represent them.
• It provides a negligent driver/owner with some basic economic protections if they're sued, paying on judgments or claims up to the amount of the coverage limits – money which might otherwise come out of the driver's and/or owner's personal assets or income.
• It's the right thing to do. Everyone makes mistakes, and if an error of ours results in injury to another person, having liability insurance available to help pay for the consequences of that mistake is just the right thing to do.

What If I'm Hit By An Uninsured Motorist?

Unfortunately – and for a variety of reasons – many vehicles on the road today are uninsured.  What happens, then, if we are involved in a motor vehicle accident caused by someone who is uninsured?  Well, for our property damage, some or all of our losses will be covered if we have collision coverage and/or uninsured motorist property damage coverage.  But for the much more critical coverage for our personal injuries and damages such as medical expenses and wage loss, we need uninsured motorist coverage.

What is Uninsured Motorist Coverage?

Uninsured motorist (or UM) coverage is optional insurance – it's not one we're required to have.  It is, however, one that our insurance companies are required to offer to us when we get liability insurance from them.  In fact, it's automatically assumed that we have it unless they have gotten us to specifically waive the coverage as required by the California Insurance Code.  Unfortunately, many folks may not understand how important uninsured motorist coverage can be, as well as what a relatively good deal it is compared to other coverages. So they end up waiving the coverage to "save a few bucks."

Uninsured motorist coverage is actually one of the best deals in an automobile insurance policy:

• UM is relatively inexpensive – for most policies, the cost of UM coverage is typically only about a quarter or a third of the same amount of liability coverage.
• It's a coverage whose use cannot increase your insurance premiums.
• It provides economic protection for personal injuries for anyone who may be in the covered vehicle if they are injured by an uninsured motorist – the driver and the passengers, whether they are named on the policy or not (in most cases).
• It provides economic protection for personal injuries to the named policyholders for injuries caused by uninsured motorists, even when the policyholders aren't in a vehicle. For example, if you're struck and injured by an uninsured motorist while you are walking or riding a bicycle, your UM coverage will provide protection.
• UM coverage even provides protection (in most cases) for your "resident relatives" -- relatives who live in your household – if they are injured by an uninsured motorist in a traffic accident.

How Do I Prove Another Driver Was Uninsured?

One of the best steps to protect yourself if you have been involved in a motor vehicle collision – especially if you did not cause the incident – is to contact the local police department or California Highway Patrol to report the incident.  Having an officer come to the scene to observe the evidence, take statements and ID and insurance information from the drivers involved, and prepare a traffic collision report is the best first step in documenting the accident.  Very often, if the responsible party is unable to present evidence of current liability insurance, this may be enough to trigger an uninsured motorist claim when the police traffic collision report shows this lack.  If the police are unable or unwilling to come to the scene of the accident (some police departments will only respond if there are injuries involved or if it is a major collision), then certainly exchange driver's license and insurance information with the other drivers.  This is not only required by law for drivers involved in a collision but will give you the necessary information to track down and identify the other driver's insurance company – or verify they don't have one.  Collect in writing, and if possible, with photographs:

• The driver's license for each involved vehicle.
• The insurance information card for each involved vehicle.
• The license plate for each involved vehicle.

Certainly, there is other important information to collect at the scene – especially if there are no police responding – such as photos of the damage to the vehicles and their relative position to one another. Still, the three items above are the ones necessary for proving the existence of available liability insurance.

What Can Happen After the Car Accident?

In the days and weeks following a motor vehicle collision, the status of a driver as being uninsured may become evident in a few different ways.  The most straightforward way is if the police traffic collision report that comes out (usually within a couple weeks) shows that the driver responsible for causing the accident and your injuries were unable to provide evidence of coverage.  Very often, presenting a traffic collision report to your insurance company that shows this is all that's needed to get them to acknowledge that you have a valid uninsured motorist claim for your personal injuries.  (Remember that your insurance company will also be doing its own investigation behind the scenes to verify whether or not the other drivers and vehicles had insurance in place.)

Sometimes, however, more effort needs to be made.  For example, if the driver who caused the accident presented an insurance card that appeared to show he or she had liability insurance – but that insurance coverage had lapsed for some reason – it may be necessary to first report the accident to that driver's insurance company, let them investigate the situation. They will then issue a notification that there was no insurance in effect on the date of the accident.  Presenting this letter to your insurance company is usually sufficient proof to verify an uninsured motorist claim.

In other situations, especially where there is no police report officially documenting the collision, and the responsible driver was unwilling or unable to provide you with proof of their insurance company, it may be necessary to send them a letter directly asking them to either identify their insurance company or confirm that they have no insurance.  Since the next step, if they refuse, is to contact the Department of Motor Vehicles directly, and since putting the DMV on notice that the responsible driver was involved in an accident and is refusing to provide insurance information is much more likely to get them in trouble, most folks are willing instead to admit they were uninsured.

But when a roadblock is hit in this process because there is no traffic collision report and the driver who caused the accident is unwilling to communicate, the final option is to request an Uninsured Motorist Certificate from the Department of Motor Vehicles.  They will contact the vehicle's registered owner to give them one last chance to provide proof of insurance.  If the owner does not do so, the DMV will issue the UM Certificate, which is then presented to your own insurance company as proof of a UM claim.

How Do I Use My Uninsured Motorist Coverage?

Once your insurance company opens an uninsured motorist claim for you, things proceed very similarly to how a standard claim against another driver's insurance would proceed (a "third-party claim as opposed to a UM "first-party claim").  The insurance company investigates the incident and requests information related to your injuries, medical expenses, wage loss, and other damages that are used to prove the value of your claim.  You or your attorney would gather the proper documentation to prove your claim value, and when the time is right, present this to your insurance company with a demand for settlement.

One element of a UM claim that is different from a liability claim against another driver's insurance is that you, as a policyholder, have an obligation to provide information to your insurance company as they do their investigation.  This is most commonly seen in the request for a recorded statement.  When another driver's insurance requests a recorded statement, it is almost best to decline, and instead, present the relevant information as and when it is best to do so.  Since you have a contractual obligation to work with your own insurance company, however, it may be necessary to provide a recorded statement early on in an uninsured motorist claim.  It is essential to have an attorney assist you with preparation for this statement and to talk part directly when the interview takes place to make sure that only the proper information is provided and that the insurance adjuster does not try to dig into irrelevant details.

After a demand for settlement of an uninsured motorist claim is presented to your insurance company, the negotiations that take place are also very similar to those that might take place with another driver's liability insurer.  The methods for valuing a claim are the same, and the adjuster will typically be following the same steps in trying to resolve them.  There are a few details that are different.  For example, if you have used medical payments coverage with your insurer to pay some of your medical bills, then your insurance company is entitled to get a "credit" for those med-pay payments against the final value of your claim.

What If the Claim Doesn't Settle?

If an uninsured motorist claim does not settle, however, then the continued path toward resolution is much different.  If your attorney is unable to settle your claim against another driver's insurance company, then the typical path is to file suit in court, have the defendants served with the lawsuit, then proceed forward into litigation.  The eventual end step of this process is a trial, although the vast majority of lawsuits eventually are resolved with a trial.  With an uninsured motorist claim, however, there is no lawsuit and trial – instead, automobile insurance policies will specify that UM claims are resolved through "arbitration." 

If the UM claim does not settle and your attorney "demands arbitration," the initial steps are similar to a lawsuit against another driver – the parties engage in "discovery" with written questions (interrogatories), requests for documents, and depositions being exchanged.  Except in a UM claim, the adverse "party" is your own insurance company.  Instead of a trial, the end step in an uninsured motorist claim is an arbitration – a type of formal hearing that is somewhat similar to a trial in that the injured person's attorney and the insurance company attorney will present testimony and evidence proving or disproving who caused the accident, what the injuries and monetary damages were, and so forth.  An arbitration, however, instead of being before a judge and jury, is presented to an "arbitrator" -- a neutral person, usually an experienced attorney or a retired judge – who will come to a final decision on the claim.

For information on more of the coverages you may (or should) have on your automobile insurance policy, check out:

• Collision coverage 
• Comprehensive coverage 
• Liability coverage 
• Underinsured motorist (UIM) coverage
• Medical payments (med-pay) insurance
• Gap coverage 
• Umbrella insurance coverage

And for more information on insurance companies, their claim tactics, and how an experienced personal injury attorney should deal with them, see:

• Insurance Company Tactics -- Dirty Tricks Insurance Companies Play in Accident Claims
• Our Tools -- How an Experienced Personal Injury Attorney Deals with Insurance Company Tactics 
• The Insurance Industry and Individual Companies -- Huge and Hugely Profitable

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