California law generally requires all drivers to carry automobile insurance to cover injuries and damage to others and their property. However, the minimum required coverage limits are relatively low: $15,000.00 per person/injury or a total of $30,000.00 for any one accident. While this minimal insurance may cover injuries or property damage in a minor fender bender, it is often not enough to pay for all injuries sustained by the injured party, including property damage, rental car expenses, medical bills, lost wages, pain and suffering and other incidental damages.
As a result, California law requires that all automobile insurance companies offer their policy holders the option of purchasing additional insurance to provide the policy holder with additional coverage in the event the policy holder is involved in an accident with a third party with low insurance policy limits (such as the statutory minimum) or no insurance at all. This type of coverage is called uninsured motorist coverage or underinsured motorist coverage.
If uninsured/underinsured motorist coverage is purchased, the policy holder can be assured that in the event an accident, it will have some minimum level of coverage available to compensate the policy holder for his/her injuries regardless of the financial state of the driver at fault. This is particularly important to have this kind of insurance. There are many drivers on the road, some of whom have no insurance or assets to satisfy injury claims made by others. Additionally, underinsured/uninsured motorist coverage can be particularly useful in situations where the at fault driver’s insurance company denies coverage. For instance, where a stolen car driven by a third party causes injury to the policyholder and coverage is denied, underinsured/uninsured motorist coverage would cover the policy holder. Oftentimes, drivers accidently allow their insurance policies to lapse. Again, underinsured/uninsured motorist coverage would step in an cover a policy holder’s injuries provided it was not at fault.
One of the greatest benefits of uninsured/underinsured motorist coverage is the broad coverage it allows. For instance, for uninsured/underinsured motorist coverage to apply, the policyholder generally need not be in a vehicle at the time of the accident. Court have broadly construed uninsured/underinsured policies to include claims made by pedestrians hit by vehicles with too little or no insurance. Courts have even gone so far as to find uninsured/underinsured motorist coverage in cases where vehicle parts (such as a wheel and tire) fly off a vehicle and hit an innocent passerby who happens to have uninsured/underinsured coverage.
Another benefit of uninsured/underinsured motorist coverage is that it often covers not only its driver, but also the passengers in a vehicle. Thus, if a person is a mere passenger in a vehicle which is covered by uninsured/underinsured motorist coverage, such coverage will typically apply regardless of whether the passenger maintains his or her own insurance policy. Again, uninsured/underinsured motorist coverage can be of great help where multiple passengers are hurt in a single accident by a defendant with a relatively small insurance policy.
In sum, uninsured/underinsured motorist coverage is a boon to policyholders. For a slight increase on one’s policy, they can effectively protect themselves and their family from the negligence of uninsured/underinsured drivers.