The Importance of Uninsured Or Underinsured Motorist Coverage

Car collisions can be a life-altering event.  According to its Early Estimate of Motor Vehicle Traffic Fatalities for the First 9 Months in 2019, the United States Department of Transportation's National Highway Traffic Safety Administration estimated that 26,730 people died in motor vehicle traffic collisions from January through September 2019 in the United States.   Furthermore, hundreds of thousands of people suffered injuries due to car collisions.

What happens when Party 1 causes harm to Party 2 through a car collision?  One may expect Party 1's car insurance would cover all the property damage, medical expenses, lost wages, and pain and suffering incurred by Party 2.  This may not be the case, though, when the injuries are significant enough to warrant surgery, necessitate frequent physical therapy for the course of several months, or cause long term pain.  In California, the minimum bodily injury policy limit is $15,000 per occurrence.  I assume that most drivers on the road have the minimum policy.

Does this mean that if Party 1 has the minimum bodily injury auto policy required by California and lives paycheck to paycheck that Party 2 has the misfortune of being harmed more than Party 2 can be recovered?  What if Party 1 does not even have auto insurance?  If Party 2 has sufficient uninsured/underinsured motorist (UM/UIM) coverage, then Party 2 can recover enough through his or her own insurance to cover the damages caused by Party 1.

How does UM/UIM coverage work?  Let's use the scenario that I used above assuming that Party 1 has a $15,000 bodily injury policy limit and Party 2 has a UM/UIM with a policy limit of $250,000.  After the case against Party 1 resolves (either through settlement or judgment after trial) for the policy limits of $15,000, then Party 2 can make an UM/UIM claim for the rest of the policy, i.e., $235,000.  If a settlement cannot be reached, then Party 2 and the insurance carrier for Party 2 can go to arbitration to determine how of UM/UIM policy to award Party 2.   A skilled attorney can help navigate both claims to get Party 2 as much money possible to compensate for the harms caused by the negligence of another person.

I have seen how the lack of UM/UIM coverage can devastate a person who was harmed through no fault of her.  SN was a client of my former firm who was rear-ended at a high speed on the I-405 freeway.  She suffered significant injuries, including a significant traumatic brain injury that required immediate surgery.  Her life was never the same.  The man who hit her had no the minimum required bodily injury policy limit of $15,000, which was the most his insurance company had to offer to fulfill its obligations to its insured.  SN thought she had UM/UIM coverage but learned that her husband had actually cancelled that part of their auto insurance just a few months prior to her life-altering car collision.  Her case is still pending now, but there is a good chance that the only amount she will be able to recover is $15,000.

Contrast SN's situation with my client LH who suffered back and neck injuries when a man ran a red light and crashed his vehicle into LH's vehicle.  Fortunately, LH was able to avoid surgery and recovered well after several months of physical therapy.  The man who crashed into LH also had the minimum required bodily injury policy of $15,000, which his insurance company offered after I took his deposition.  I then made a demand for remaining amount of LH's UM/UIM policy.  After a relatively quick negotiation, we reached a settlement with LH's insurance company that provided LH with more than double what she would have been left with if she did not have UM/UIM coverage.

LH did not suffer nearly the amount of damages as SN, but received more than twice the amount as SN is likely to receive due to her UM/UIM insurance policy.  Please check your UM/UIM policy as soon as possible and raise its limits as high as you think is necessary.  Please also make sure your family and friends do the same.  Sufficient UM/UIM coverage can make all the difference.