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How UM Coverage Can Make the Difference for Victims Injured by Uninsured or Underinsured Drivers

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In California, motorists are only required to carry bare minimum auto liability insurance to pay for injuries they cause while operating their vehicle. Under state law, the minimum liability insurance requirements for private passenger vehicles are:

  • $15,000 for injury / death to one person;
  • $30,000 for injury / death to more than one person; and

Unfortunately, not all drivers abide by laws for maintaining even these minimum auto insurance requirements. Many others only carry insurance at these minimum levels or a little more, which is often grossly inadequate to fully compensate victims, especially when injuries are severe.

To protect yourself in the event that you are injured by an uninsured or underinsured driver, you can purchase uninsured / underinsured (UM / UIM) motorist coverage.

  • Uninsured motorist coverage comes into play when the negligent driver does not have any liability insurance or when there is a hit-and-run driver.
  • Underinsured motorist coverage applies when your damages exceed the level of insurance carried by the at-fault driver.

Underinsured motorist coverage provides coverage equal to the amount of UM / UIM coverage you purchased, less the amount of insurance you collect from the negligent driver. Underinsured motorist coverage does not come into play until you have already recovered compensation available under the negligent driver’s policy. For example:

  • If you buy $250,000 UM / UIM insurance and the other driver carriers only $50,000 in bodily injury coverage, once you obtain the $50,000 policy limits from the underinsured motorist’s insurer, you can then make a claim for up to $200,000 more against your own UIM coverage.

Recovering Damages When the Other Driver is Uninsured or Underinsured

If you are injured in a car accident caused by an uninsured or underinsured motorist, you may be able to bring a UM / UIM claim to recover your damages. While bringing a claim against your own insurer can be a viable source of compensation, it is only an option if you have purchased UM / UIM coverage.

In California, UM / UIM coverage is not mandatory. However, it is in your best interests to consider purchasing UM / UIM coverage if you have not done so already or increasing the UM / UIM coverage you currently have. Having this coverage could make the difference between being able to recover your damages and being left on the hook for your medical bills, missed wages, and other losses.

The California Department of Insurance has a free Automobile Insurance Guide that can help you learn more about UM / UIM insurance and other forms of coverage.

The Insurer’s Duty to Pay UM / UIM Claims

UM / UIM claims are first-party claims, which means they are brought against your own insurance company. These differ from personal injury claims, which are filed against a negligent third party and its insurance company.

In third-party claims, the insurer owes no duty to the claimant. Insurers can stall the case, make inadequate offers, or force the claimant to go to trial to obtain fair compensation. In first-party claims, by contrast, the claimant is the policyholder, which means the insurer owes them a duty of good faith and fair dealing. This obligates the insurance company to do the following:

  1. Promptly investigate and process the claim.
  2. Promptly respond to any communications regarding the claim.
  3. Attempt in good faith to effectuate prompt, fair, and equitable settlement of the claim once liability has become reasonably clear.
  4. Not force the insured to litigate the claim in order to obtain fair compensation.

If you bring a UM or UIM claim and your insurer violates the obligation it owes to act in good faith and deal fairly, you can sue the insurer for bad faith. If you prove that the insurer violated the covenant of good faith and fair dealing, the insurer will be liable for any damages you sustained as a result of its wrongful conduct; potentially even including punitive damages.

UM / UIM Arbitration

In UM / UIM cases, the policy provides that disputes are to be resolved by arbitration rather than trial. Arbitrations, when handled correctly by the claimant’s lawyer, generally resolve quicker and with less litigation expenses, which can increase the claimant’s net recovery in comparison to a jury trial.

Biren Law Group specializes in handling and arbitrating UM / UIM cases, and has a particular specialty handling policy limits UM / UIM cases by forcing prompt payment of the policy limits and subsequently bringing bad faith claims if insurers fail to do so.

Here are two examples of UM / UIM cases involving these issues:

  • Case 1: Biren Law Group represented a Claimant who was involved in a hit-and-run accident. The driver was ultimately located but did not have insurance. Because the Claimant had purchased additional coverage, she filed a UM claim against her own insurance carrier under her $500,000 UM policy. The insurer failed to pay the limits, only offered a portion of the policy benefits, and forced the case to arbitration. BLG helped our client bring a bad faith claim against the carrier for failing to promptly pay. The insurer immediately paid off the award and the substantial 6-figure demand for damages in order to be done with the case.
  • Case 2: Biren Law Group represented an accident victim who obtained a $100,000 policy limits settlement from the negligent driver. She then made a UIM claim against her own $500,000 UIM policy to recover the remaining damages. The insurer refused to pay the limits, offering increasing fractions of the policy benefits and forcing the case into the arbitration process. On the eve of arbitration, the carrier finally paid the $400,000 remaining benefits available under the UIM coverage. Biren Law Group subsequently filed a bad faith case against the insurer over the delay, which is now in litigation.

Call (310) 896-4345 for a FREE Review of Your Case

The duties imposed by the special relationship between the insured and its insured can provide policyholders with a distinct advantage when bringing first-party UM / UIM claims. In order to wield this leverage appropriately and pursue a full financial recovery, victims should work with attorneys experienced in navigating the arbitration process and litigating bad faith claims.

Biren Law Group is a boutique father-son law firm that’s recovered over $500 million in compensation for clients. If you have questions about a UM / UIM claim or bad faith action arising from an auto accident, call or contact us online for a FREE consultation.