Uninsured and Underinsured Motorists
In California, the law requires that all driver’s purchase a minimum of $15,000 in liability insurance. There are millions of drivers in the state who choose to purchase only the bare minimum policy. As such, if you are the victim of a motor vehicle accident, there’s a reasonably high likelihood that you will not be able to recover more than $15,000 (or some other minimal policy ceiling) from the at-fault driver as compensation for your injuries.
It is not uncommon for a motor vehicle personal injury claim to be worth tens of thousands, even hundreds of thousands of dollars, further demonstrating the inadequacy of a bare minimum insurance policy for compensating serious injuries.
Thankfully, drivers are not left without recourse. There are options – both private insurance options, and several legal options – available to California drivers to allow for a reasonable recovery in instances where the at-fault driver is underinsured or even uninsured.
To better understand the environment for underinsured and uninsured motorist (UM/UIM) concerns in California, let’s consider some standard motor vehicle accident scenarios.
Suppose that you are stopped at a traffic light and are rear-ended by a speeding car. You seriously injure your neck as a result of the collision. The total estimated damages – considering wage loss, pain and suffering, cost of surgery and treatment, and more – is in the ballpark of $200,000. Now, suppose that the speeding driver (the defendant, here) is underinsured. He purchased only the bare minimum liability insurance in California, which accounts for only $15,000.
What are your options for recovery?
Personal Insurance Coverage
California drivers are empowered to purchase their own uninsured and underinsured motorist insurance. This uninsured/underinsured motorist coverage is separate and different from liability insurance, but thankfully it is relatively inexpensive compared to liability insurance. In the above example, after the $15,000 has been paid out by the at-fault driver, your uninsured/underinsured motorist coverage will pay for the remaining difference (up to your plan limits).
Of course, personal uninsured/underinsured motorist coverage is not quite so simple as filing a claim and being paid out to your plan limits. If the claim is significant, then your insurance company will likely fight tooth and nail to minimize the claim.
Insurance will only pay out if you were not at-fault in the accident. This is important, as, in many situations, the victim may be partially at-fault, even if the defendant is mostly at-fault for the accident. The insurance company may attempt to frame the victim’s partial fault as full fault in order to escape their obligation to pay out.
In the event that your insurance carrier receives a demand from your attorney, they may offer to settle the claim for less than the demanded amount. Your attorney will then negotiate with the insurance carrier. If informal negotiations fail, there may be a mediation, and then later, binding arbitration (California law does not allow you to take your insurance carrier to trial over an uninsured/underinsured motorist claim).
Suing the Defendant to Reach their Personal Assets
Unfortunately, in underinsured motorist situations, it is often the case that if recovery cannot be sorted out by insurance, then the plaintiff may not be able to recover fully for their damages.
In the above example, the at-fault driver had a bare minimum liability insurance policy. Suppose that you have a $100,000 underinsured motorist policy, which, combined, does not cover the $200,000 total in damages that you suffered.
To recovery fully, you may have to sue the defendant directly, but the reality is that most uninsured or underinsured motorists are uninsured or underinsured because they are not wealthy and otherwise lack assets. It is rare that an uninsured or uninsured motorist will have extensive personal assets such that it is worthwhile to sue them to reach their personal assets. Remember, litigation can be costly, in a financial, emotional, and time-management sense.
Of course, in the event that the defendant does have significant assets, but a limited liability insurance policy, it may be worthwhile to sue the defendant and reach their personal assets. You’ll want to consult with your attorney to ensure that the strategy is a reasonable one, given the circumstances of the case.
Suing Liable Third Parties
One option – after having exhausted the possibility of recovering fully from insurance and from suing the defendant-driver directly – is to sue a third party that is also liable for your injuries.
Confused? Let’s return to the core example, but change the facts a bit.
Suppose that the defendant-driver rear-ended you at a traffic light, but the turn coming into the light did not indicate the existence of a traffic light. Perhaps it was nighttime and the street lighting was also poor. Perhaps, also, the foliage around the turn was thick and improperly maintained, such that vision of the upcoming traffic light was heavily impeded. Given this new set of facts, it is possible that the City could be found liable as a third party for contributing to your injuries (under a theory of dangerous condition of public property). Though it is very difficult to succeed in a personal injury case against a public entity due to protective laws governing suits against public entities, the City would have the funds necessary to pay out the full damages award.
Personal injury claims against public entities must be filed within six months of the injury, which is much sooner than claims against private entities or persons. As such, it is even more important that you consult with a personal injury attorney as soon as possible after your injury so that all your potential claims against the defendants are assessed and pursued to their fullest extent.
Alternatively, the facts might indicate that the defendant’s motor vehicle malfunctioned or had a design flaw which contributed significantly to the incident. If so, then you may have a legitimate case against the car manufacturer or distributor. Though such cases may reap potentially significant rewards, car manufacturers are famously defensive and like to out-spend litigants so as to discourage future lawsuits. To succeed in a personal injury claim against a major car manufacturer requires the services of skilled, experienced attorney.