Uninsured and underinsured motorist coverage: why you need it

In California, we're required to have at least a minimum amount of auto insurance: $15,000 in liability insurance for injury/death to one person, $30,000 for injury/death for more than one person, and $5,000 for damage to property.

Even though it's required, about 14 percent of California drivers have no auto insurance at all. What happens if you get into an accident with one of those people? That's where uninsured/underinsured (UM/UIM) motorist coverage comes in.

What is uninsured/underinsured motorist coverage?

Uninsured/underinsured motorist coverage protects you if you're involved in an auto accident and the driver of the vehicle that caused the accident either doesn't have liability insurance coverage or doesn't have enough insurance coverage to adequately cover your personal injuries.

If you have uninsured/underinsured motorist coverage, your insurance company will cover damages for your personal injuries, above whatever coverage the other driver has.

For example, if your case has a value of $25,000 and the other driver only had $15,000 in liability coverage, your insurer would cover the extra $10,000, depending on your coverage limits.

If I use my UM/UIM insurance, will my rates go up?

No. If the accident was not caused by you, using the coverage does not affect your premiums.

Is UM/UIM coverage required?

No, but it's strongly encouraged. California law requires that all automobile insurance policies written in California have uninsured/underinsured motorist coverage in the policy unless there is a specific, written waiver of uninsured/underinsured coverage. There is never a time that anyone should ever waive that coverage. First, the coverage itself is not very expensive. Second, by waiving that coverage, you are not covering yourself for injuries inflicted on you by a negligent, uninsured/underinsured driver.

How much does UM/UIM cost?

The cost for UM/UIM coverage varies depending on many factors, including prior claims and policy discounts. Experts estimate it adds about 5 percent to your annual premium. So if you pay $800 a year for auto insurance, expect to pay about $40 per year for UM/UIM coverage. Isn't that extra peace of mind worth $3.34 per month?

Am I covered if I'm in an accident while walking or riding my bike?

In most cases, yes. The uninsured/underinsured motorist coverage covers injuries you sustain when hit by an uninsured/underinsured motorist even when you are a pedestrian or if you are riding a bicycle. Check your policy terms to be sure.

How much UM/UIM coverage can I buy?

California law provides that the amount of uninsured/underinsured coverage you can buy is limited to the amount of liability insurance coverage you buy. For example, if your liability coverage is $100,000 for a single person and $300,000 for more than one person, the maximum amount of UM/UIM you can buy is $100K/$300K. You can buy less UM/UIM coverage, but that would mean that you are buying more coverage for others than you are for yourself, and the monetary savings is minimal.

Next time your auto insurance is up for renewal, get a quote from your insurance agent for UM/UIM coverage which is equal to your liability coverage. You'll see how inexpensive it really is to protect yourself, your family and your friends in the event you get into an accident with an uninsured or underinsured driver.

If your auto accident results in serious injuries, before you call your insurer, contact a personal injury lawyer for a free consultation. An experienced personal injury lawyer can evaluate your claim and help you navigate the complex maze of auto insurance and health insurance claims.

Photo courtesy of Flickr

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David G. Smith, Attorney At Law
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Penthouse 1
Oakland, CA 94612

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