Uninsured vs. Underinsured Motorist Coverage in California

By the FigureMyTax Editorial Team · How we calculate

California offers UM and UIM as a single coverage. A driver is underinsured when insured for less than your own UM limit, UIM pays up to your limit less what you recovered from others, and you must act within two years.

Uninsured motorist (UM) coverage

Under Insurance Code 11580.2(b), an uninsured motor vehicle is one with no applicable bodily injury liability insurance or bond, one whose insurer denies or conditionally admits coverage, one used without the owner's permission with no applicable insurance, a vehicle whose owner or operator is unknown, or a vehicle whose insurer is insolvent. A policy must offer UM at limits equal to your bodily injury limits, up to $30,000 per person and $60,000 per accident, and you may agree in writing to less or to delete it (Vehicle Code 16056 sets the minimum liability limits).

Underinsured motorist (UIM) coverage

Subdivision (p)(2) defines an underinsured motor vehicle as one insured for less than the uninsured motorist limits carried on the injured person's vehicle. That is a comparison of limits, not of damages. Subdivision (n) says UM and UIM must be offered as a single coverage, and UIM may be offered with higher limits.

How UIM pays

UIM does not apply until the limits of the liability policies covering all insured vehicles that caused the injury have been exhausted by judgments or settlements and proof of payment is submitted to your insurer ((p)(3)). The maximum liability of your insurer is your UIM limit less the amount paid to you by or for anyone legally liable ((p)(4)), and the insurer is entitled to credit for what you received ((p)(5)). If you sue the underinsured driver you must immediately give your insurer a copy of the complaint ((p)(6)).

Do not settle without consent

UM coverage does not apply to bodily injury for which you, without your insurer's written consent, settle with or prosecute to judgment an action against the person who may be legally liable ((c)(3)). Get written consent before you sign a release.

Hit-and-run and unknown drivers

For an unknown driver, the injury must arise from physical contact with you or the vehicle you occupied, the accident must be reported within 24 hours to the police, the sheriff or the California Highway Patrol, and you must file a sworn statement with your insurer within 30 days ((b)(1) and (2)).

Deadlines and process

No cause of action accrues unless, within two years of the accident, you sue the uninsured motorist, reach an agreement on the amount due, or start arbitration by certified-mail notice to your insurer (subdivision (i)). Disputes over entitlement and amount go to a single neutral arbitrator if you and the insurer disagree (subdivision (f)). Stacking is unavailable; see why and what the statute says, then use the California UM/UIM stacking calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how California's rules apply to your specific case with a licensed California attorney.