In our article entitled “What do I need to know if an uninsured driver injures me or if I am the victim of a hit-and-run collision?” we explained what uninsured motorist (UM) coverage is, and how it applies in a hit-and-run collision or when the driver that caused the collision does not have auto insurance. In this article, we explain the difference between uninsured and underinsured motorist coverage.
Whereas the uninsured motorist coverage portion of your auto insurance policy is used when the driver who caused the accident did not have insurance (or fled the scene of the accident before they could be identified), underinsured motorist coverage is used when the driver that caused the collision does have insurance, but the amount of coverage available under their auto liability policy is less than the amount of the losses that you have suffered as a result of the collision.
For example: If you are involved in a collision, and the driver that hit you has an auto liability policy that pays up to $25,000 per person, and your damages are $100,000, you would collect the $25,000 from the at-fault driver and collect the remaining balance from the UIM coverage under your policy.
There are many restrictions and limits on UIM claims, however. This is especially true in the state of California. This is because in California, you are only allowed to collect the difference in the policy limits between the underinsured driver’s coverage and your UIM coverage. This can be confusing, so let’s look at another example:
Let’s apply the above situation again. So you have $100,000 in damages as a result of the collision, and the driver that hit you has $25,000 in coverage. In this case, let’s say that you have UIM coverage with a policy limit of $50,000. You would be able to first collect the $25,000 from the person that hit you. However, in California, you would subtract that $25,000 from the $50,000 unavailable under your UIM coverage. In other words, you would receive another $25,000 from your UIM coverage, for a total of $50,000 collected. This means that if your damages were $100,000, you would still be $50,000 short of being made whole after collecting under the at-fault driver’s insurance and your UIM coverage. So, when purchasing UIM coverage and adding it to your auto policy, make sure that you have enough coverage. In the event of a situation like this one, you will be glad you did. Talk to your insurance agent, or feel free to call our firm for advice on this issue.
Another important thing to know is that unlike claims against another party’s insurance that can be pursued by filing in the Superior Court, UM or UIM claims against your own insurance are dealt with through an out-of-court process called “arbitration”. In the event that a claim made against your own insurance is not dealt with in a timely manner, read the specifics of your policy to see the steps you must take in order to pursue the matter through arbitration. This can be a very complex and time-consuming process, and it is highly advised to seek the help and representation of an experienced auto accident attorney in the event this happens to you.
Your attorney will know how to go about making a claim with your insurance company, and will be there to negotiate on your behalf in order to get you the relief you deserve. For over 30 years, The Law Offices of Vann H. Slatter have helped those injured by uninsured and underinsured motorists receive compensation. Call today for a free consultation. (310) 444-3010 or toll-free at 888-293-0404. Call now!