Understand the Value
Uninsured and Underinsured motorist coverage is the part of your auto policy that protects you and your family. This coverage is triggered when you or a family member are injured by a motor vehicle accident and the at fault party is either uninsured or has insurance coverage less than the coverage of your policy. It doesn't matter whether you were injured while in your car, in a friends car, in a cab, on a motorcycle, on a bike or even walking, so long as the injuries are the result of a car accident, you will be entitled to coverage. This is essential in California where most drivers have only the minimum policy limits required by law ($15,000 per person or $30,000 per accident) and many others have no insurance at all. By securing uninsured and underinsured coverage in a high amount you are protecting yourself and your family against all other drivers on the road.
Understand the Law
The California Insurance Code requires that auto insurers include uninsured and undersinsured motorist coverage in every policy unless it is waived and that waiver must be secured in writing. However, they have no obligation to make sure your uninsured or underinsured motorist coverage is the same as your liability coverage. They must offer this to you, but if you decline, they are only obligated to provide coverage no greater than $30,000 per person and $60,000 per accident. Don't wait for the agent to ask you about your protection, be sure that your uninsured and underinsured motorist limits are as high as you can afford to get them.
Consider increasing your coverage limits
Most insurers will only allow uninsured / underinsured motorist coverage to be equal to or less than your liability coverage. In this day and age, even a moderate collision can result in a claim worth in excess of $30,000. If you or a family member are involved in a more serious accident that requires hospitalization and surgery, your claim could be worth in excess of $250,000. Our firm recommends all our clients carry $1,000,000 in auto coverage if they can afford to.
Consider this example
Imagine you and your spouse are rear ended while at a stop light. The impact forces your car into the vehicle stopped in front of you. Both of you are taken to the nearest ER by ambulance. In the accident you suffer a neck strain and low back strain. Your spouse suffers the same but also injured their shoulder. You each see your Primary Care Physician and he recommends physical therapy for each of you. You improve but your spouse's shoulder does not. They require MRI's which reveal a tear in their rotator cuff requiring surgery. You miss 5 days of work and your spouse misses 2 weeks. After filing a claim you discover the driver that hit you has only $15,000/$30,000 in coverage. You find out that the other car, the one you were pushed into, had a mother and daughter in it who were also injured and they too are making claims. They too were treated at the ER and are receiving therapy.
What would that mean for you?
This example results in 4 claims being made against a policy of $30,000. Assuming all injuries are relatively similar, each will get $7500 from the liable driver's insurer. Together, you and your spouse collect $15,000, but your medical bills are already $15,000 and climbing and your lost wages from missing work total $3000. Your claim is already worth $18,000 and climbing without considering the damages each of you are entitled to for the pain and suffering you have endured. This is where you would then make a claim to your own insurance company for the benefits of your underinsured motorist coverage. Your insurer will be entitled to reduce your coverage by the amount of coverage available from the driver that hit you. What ever is left is available for you and your spouse to make a claim for after you recover.
Check your auto policy today
Get a copy of your declaration page and make sure that your uninsured and underinsured motorist coverage is equal to your liability limits. Increase you coverage limits to $1,000,000 or as high as you can afford to. Don't expect your insurance agent to do this for you, be proactive!