- What is uninsured motorist coverage?
- It is coverage for you and other people in your vehicle in case you are hit by somebody who doesn’t have automobile liability insurance.
- But isn’t it the state law in California to have auto insurance if you own a car?
- Yes, it is the state law to carry auto insurance with limits of at least 15000/30000/5000 if you own a vehicle with some exceptions that we won’t go into here. I’ve heard that anywhere from 20% to 33% of drivers in California are driving illegally by not carrying the mandatory liability coverage. Reasons for this vary. Some people don’t think that they can afford even the most basic auto insurance policy. The number of uninsured drivers goes up under hard economic times. And some people just choose to ignore the law (but face dire consequences later).
· Why should the amount of uninsured motorist coverage that I carry be the same as the amount of liability coverage on my auto policy?
o The liability coverage that you purchase protects you from major financial harm to your assets in case you injure other people in an accident or cause a lot of property damage. It is better to pay small amounts now rather than a back-breaking huge amount later by not having the proper liability coverage. So why would you choose proper liability coverage which covers other people or property that you hit (also called 3rd parties) and not have the same protection for yourself and others riding in your car (usually your family and friends)?
· But wouldn’t my health insurance cover my family?
o Yes, most of the personal injuries caused by an uninsured driver will be covered by your health insurance but not your friends. Also, your health insurance will not cover you for your lost wages while being out of work or for pain and suffering.
- Can’t I just sue the other party to get my payment?
- Depending on the size of the settlement, you can take the other party to small claims or civil court and usually will have to hire an attorney. But chances are if the other party doesn’t have insurance, he won’t have the money to pay your medical costs even if you win your case in court.
- What about my car?
- In California, you can purchase uninsured motorist property damage (UMPD) if you don’t carry collision coverage which will pay up to $3500 or the value of your vehicle if you are hit by an uninsured motorist or if you carry collision coverage on your vehicle, you can purchase collision deductible waiver (CDW) coverage. In this case, your collision coverage will cover the physical damage coverage to your vehicle but your deductible will be waived.
- What happens if the other guy hits me and takes off?
- In most states, a hit and run is covered by your uninsured motorist coverage but in California, the insurance company must know that the other party did not have insurance. So, if somebody hits your vehicle and leaves without anybody seeing who it was, your collision coverage would have to be used to repair your vehicle which means that you will be responsible for paying your collision deductible. If you don’t carry collision coverage, you’re out of luck.
- What if the damage to my car or the injuries to me or my passengers is more than the amount of liability insurance the other guy is carrying?
- This is another whole discussion but that’s when your underinsured motorist coverage kicks in. Let’s say that the other guy has liability coverage of 15000/30000 limits and one person in your car us injured. His insurance is liable to pay up to $15,000 if one person is hurt. If the medical bills amount to $40,000 and you have 50000/100000 limits of coverage, your policy will pay the additional $25000 under the underinsured motorist coverage. This is another example of why it’s important to have adequate limits of uninsured/underinsured motorist coverage.
- Can I register my car at the DMV now and get the insurance later?
- No, you will be required to show proof of liability insurance in order to register your vehicle. And if you let your insurance coverage lapse or get cancelled, the insurance company is legally responsible to notify the DMV.
So, the whole idea is that if you drive a vehicle in California, your should at least have basic liability limits to help cover the damages or injuries you inflict upon somebody else (after all, it wasn’t there fault, it was yours) but if the other guy doesn’t have the legally required liability insurance or doesn’t have enough insurance to cover the loss, you are smart to have uninsured and underinsured motorist coverage to protect you, your friends, and your loved ones.