Many consumers are confused about Uninsured (UM) and Underinsured (UIM) auto insurance coverage. In California, all motorists are required by law to carry auto liability insurance. The minimum coverage permitted by law is $15,000 for auto liability coverage, and $5,000 for property damage. What does this mean? This means that a driver with the legal minimum of insurance has coverage up to only $15,000 for all damage, besides property damage, that may result from that driver’s negligence in an accident. Here’s a scenario that is not uncommon: A driver with the minimum insurance coverage runs a red light, and causes a serious accident. The victim of the accident is hospitalized and loses several days, (or more) of work. The medical bills and the lost wages are in excess of $50,000. Unfortunately, the driver’s insurance company is only liable for $15,000 of the damage. If the driver has no insurance, it is not uncommon to receive nothing to compensate you for your injuries. Unless you have UM or UIM coverage.
What is UM and UIM insurance coverage? This is insurance that you obtain from your own insurance company. It provides coverage in the event that you have damages that are not covered by the other driver. For example, in the situation above where the damages greatly exceed the $15,000 coverage of the driver, you can make a claim to your own insurance carrier under the UIM provision of the policy. Your insurance carrier will be obligated to make up the difference. If the driver has no insurance coverage, the UM part of your own policy will cover your damages.
There are UM and UIM policy limits that are important to review. UIM and UM coverage for most people is lower than it should be. Your UM and UIM policy limits should be at least $50,000.
Make sure that you have a good UM and UIM insurance policy. If you are involved in an accident, this coverage may prove to be important. We are familiar with handling UM and UIM claims. Please give us a call if you are involved in an accident and need some advice.