In the state of California, all automobile insurance companies are required to offer uninsured or underinsured motorist coverage to their policyholders. In many situations, the amount of coverage for uninsured/underinsured motorists will be equal to the liability limits of your auto policy. When you are involved in an automobile accident, if the party at fault has no insurance or has insufficient coverage to cover your losses, you may be able to recover compensation from your own insurance carrier if you purchased uninsured/underinsured motorist coverage.
For example, if your injuries from the car accident total $50,000 and the at-fault driver only carried a $25,000 auto liability policy, you will need to file an underinsured motorist claim with your insurance company to recover the difference. It is important to understand, however, that your insurance company will only pay the difference in your damages, up to the amount of your underinsured motorist policy limit. This means that if you had a $50,000 underinsured/uninsured motorist policy you would be entitled to collect the full $25,000 difference from your insurance carrier along with $25,000 from the insurance carrier for the at-fault driver. If your underinsured/uninsured policy limit was $30,000, you would first collect $25,000 from the at-fault driver’s policy and then only be able to collect $5,000 from your own carrier.
In addition to filling the gap in an underinsured motorist claim, your underinsured/uninsured motorist policy comes into play when you are injured by an uninsured driver or are involved in a hit and run accident where the at-fault driver cannot be located. In these situations, your uninsured motorist policy will pay for your injuries up to the amount of your policy limit.
Underinsured/uninsured motorist policies will typically cover any passengers in your vehicle and, depending upon the specific language of your insurance contract, the policy may also apply if you are a pedestrian or bicyclist injured by a careless driver. Because the contractual language can be difficult to navigate, it is best to work with an experienced car accident lawyer who can review the terms of your insurance contract and make certain that you are receiving full and fair compensation.