Uninsured and Underinsured Motorist Claims in California

UM and UIM are two different things

Both come from the same place, Insurance Code section 11580.2, and both sit on your own auto policy. Insurers are required to offer the coverage in California; you can decline it, but only in writing. Most people who think they declined it did not, which is why the first thing we do is read the actual policy rather than rely on memory.

Uninsured motorist (UM)

Applies when the at-fault driver had no liability insurance at all, or when the vehicle fled and was never identified. Your own insurer steps into the shoes of the driver who hit you, and the claim is evaluated roughly as the liability claim would have been.

Underinsured motorist (UIM)

Applies when the at-fault driver had insurance, but not enough. Here is the part that catches almost everyone out: California UIM coverage is reduced by what the at-fault driver's insurer pays. It is not additional on top.

The deadline that ends these claims

This is the most important paragraph on this page. A UM or UIM claim is a contract claim against your own insurer, and it is not governed by the ordinary two-year personal injury statute in the way people assume.

Under Insurance Code section 11580.2, you generally lose the right to pursue the insurer unless, within two years of the date of the accident, you have done one of the following: filed a lawsuit against the uninsured or underinsured driver, reached a written agreement with your insurer on the amount owed, or formally demanded arbitration under the policy.

Negotiating with your adjuster does not satisfy that requirement. Having an open and active claim does not satisfy it. We have seen people lose otherwise solid claims because they spent twenty-three months in friendly correspondence with their own insurance company and then discovered that friendly correspondence is not one of the three things the statute accepts. If you are approaching two years from the crash and your UM or UIM claim is not resolved, that is an emergency, not a scheduling matter.

Do not settle with the other driver without telling your insurer

When the at-fault driver has a small policy and your damages exceed it, the sequence matters. Your own UIM insurer has subrogation rights against the at-fault driver, and policies require you to obtain consent, or at minimum give notice, before accepting a settlement and signing a release.

Accept the liability limits and sign a general release without doing that, and your insurer may take the position that you destroyed its subrogation rights and forfeited your UIM coverage. The correct procedure is to notify the UIM carrier of the proposed settlement, give it the opportunity to consent or to substitute payment, and document all of it. It takes a letter. Skipping the letter can cost the entire UIM claim.

Hit and run claims

When the car that hit you left the scene and was never identified, UM coverage is typically the only source of recovery. Two requirements routinely decide these claims:

• Physical contact. California generally requires actual contact between the unidentified vehicle and you or your vehicle. A phantom driver who ran you off the road without touching you creates a serious coverage problem, which is why any physical evidence of contact, including paint transfer and a body shop's documentation, should be preserved and photographed.
• Prompt reporting. The statute and policy conditions require timely reporting, including to law enforcement, and typically a sworn statement to the insurer within a defined period. Report a hit and run to police the same day, and notify your own insurer promptly even if you have not decided whether to claim.

Beyond the policy requirements, nearby business, residential and transit cameras occasionally identify the vehicle, and that footage is usually overwritten within one to four weeks. Pursuing it is time sensitive in a way nothing else about the claim is.

Proposition 213: the rule that punishes uninsured drivers

Civil Code section 3333.4, enacted by Proposition 213 in 1996, bars recovery of non-economic damages, meaning pain and suffering, in specified circumstances. The most common is where the injured person was the owner of an uninsured vehicle involved in the crash, or was driving their own uninsured vehicle. It also applies to a person convicted of driving under the influence in connection with the incident.

The practical effect is severe. A driver with no insurance who is badly hurt by someone who ran a red light can recover medical bills and lost wages, but nothing for the pain, the surgeries or the permanent limitation. Economic damages only.

There are limits on the limit, and they are worth checking rather than assuming the worst. The bar applies to owners and drivers of uninsured vehicles, not generally to uninsured passengers, and not to a pedestrian or cyclist who happens not to own a car. Whether it applies in a given case is a legal question with real money attached, and it should not be conceded to an adjuster on a phone call.

Arbitration, and when your own insurer behaves badly

UM and UIM disputes are generally resolved by arbitration rather than a jury trial, under the policy and section 11580.2. That is usually faster and less expensive than litigation, and it is a real proceeding with discovery, experts and a hearing, not a formality. The arbitrator decides fault and damages; coverage disputes may go to court.

The uncomfortable part of a UM claim is that you are now adverse to your own insurance company. It is evaluating your injury, questioning your treatment and arguing your fault, the same way the other driver's carrier would. That is normal, and it is also constrained: California insurers owe their own insureds a duty of good faith and fair dealing. An unreasonable refusal to pay a claim the insurer knows is owed can expose it to liability beyond the policy limits. Documenting the claim properly from the beginning is what makes that argument available if it is ever needed.

One more coverage worth knowing about: medical payments coverage, often a few dollars a month, pays your treatment regardless of fault and regardless of whether anyone has accepted liability. In the early weeks after a crash, when nothing has been resolved and bills are arriving, it is frequently the most useful coverage on the policy.