Lowell Steiger's Los Angeles Law Blog

Underinsured Motorist Causes Injury. Now What?

    Time and again people are severely injured in a car accident and the at-fault party has insurance but not enough insurance to compensate the victim.

    Well, if you're the victim and have Uninsured Motorist Coverage in California then it becomes Underinsured Motorist Coverage.  The legality and logistics of Underinsured Motorist Coverage can be quite tricky so you will want to consult a California Personal Injury lawyer in this regard.  Basically, your car insurance provider "steps into the shoes" of the at-fault driver and, without increasing your premiums, affords you more coverage.

Peggy Gets Rear-ended – Real Life Example

                My client, Peggy (not her real name), was minding her own business at a stop light when a driver, let's call him "Texting Bob", smashed into the rear of her brand new VW Bug, totaling it and sending Peggy to the hospital.

                The hit was so hard that it blew out a disk in Peggy’s neck.  Peggy had to undergo surgery to remove and replace the disc in her neck.  Apparently Bob invested significant money in his iPhone but not in his automobile liability insurance. 

                Peggy’s medical bills were $105,000.  Bob had a $25,000 policy limit.  Bob’s insurance immediately offered the $25,000 to settle the case. 

                Peggy had Uninsured Motorist Coverage in the amount of $500,000.  I spoke with Peggy’s insurance carrier and asked what it was that they needed, in particular, to open an Uninsured/Underinsured Motorist Claim for Peggy.

                Her carrier wanted a certified copy of Bob’s Declarations Page, a declaration under penalty of perjury that he carried no other applicable insurance, a copy of the signed Release of All Claims and a copy of the Settlement Check for $25,000.

                My office provided all of the requested documents along with the relevant medical documentation including reports, chart notes and bills along with a demand to Peggy’s insurance carrier that, due to the seriousness of her injuries and treatment, they pay the $500,000 policy limit.

                After several rounds of negotiations, fighting, arguing and legal wrangling, Peggy’s insurance carrier offered the $500,000 less an offset (to which they are legally entitled) for the $25,000 paid by Texting Bob’s insurance. 

                If Peggy didn’t have Uninsured Motorist Coverage, she would have been out of luck because Texting Bob had no more insurance, no significant assets (we did an asset check) and worked at a low-paying job.  Essentially, Texting Bob was judgment proof.

Don’t Wait Until It’s Too Late

Call or E-Mail Me to Discuss Your Auto Insurance Coverage

                It is so important to have the proper insurance coverage in California.  My practice focuses on personal injury so car insurance is something with which I’m intimately familiar.  Even if you’re not a current or past client, I am more than happy to sit down with you in person, by phone or by e-mail, and discuss your car insurance coverage BEFORE YOU NEED IT.

                This is so important that I’m happy to provide you with this consultation without charge.

 

(877) 487-8221

lowell@steigerlaw.com

Uh Oh, I'm Hurt & Other Driver Doesn't Have Enough Insurance! Underinsured Motorist Claims in California

Q: The following excellent question was posted on www.avvo.com: 

I was in a severe car accident as to which I was not at fault. However, I have a lawsuit going against the other driver, and may or may not be able to to be compensated by the other driver's (who was insured) insurance company. My question is, if I win my lawsuit against them, can I still file for an underinsured motorist claim with my insurance if the other driver has only the minimum limits of coverage required by law, but those limits are insufficient to compensate me fully for my injuries. Do the same terms apply if I lose my case?

Also, do I file an underinsured motorist claim before or after my case has been settled regardless of the outcome of the lawsuit?

A: Here's my answer to this most excellent question:

The rules are different in different states.  In California (quoting from the Rutter Group California Practice Guide: Personal Injury):

"Underinsured motorist cases—consent not required: An insured's failure to obtain the insurer's consent to a settlement with (or judgment against) an underinsured motorist does not result in loss of the insured's underinsured motorist coverage. Reason: The insured cannot recover from his or her carrier until after the bodily injury limits of the tortfeasor's policy have been exhausted by settlement or judgment (Insurance Code Section 11580.2(p)(3)). The carrier could thwart the insured's ability to collect on the uninsured motorist coverage simply by refusing to consent to a settlement. Moreover, the carrier does not have a statutory subrogation right against the underinsured tortfeasor and thus does not need the protection of a consent provision. "

You should always put your carrier on notice of an accident and, assuming you have uninsured motorist coverage, reserve your right to make an uninsured or underinsured motorist claim.

For practical reasons it is my practice to always contact my client's automobile insurance carrier, open the claim, get my client's policy limits in writing, advise that we are going to make an Uninsured or Underinsured Motorist Claim and ask them to tell me, in writing, exactly what they will need in order to comply with their particular requirements for a UIM Claim.

So, bottom line: You will NOT waive your UIM claim just by settling with the other party's carrier. However, subject to very few exceptions, you MUST, absolutely MUST, exhaust their policy limits (not a single penny less) in order for your UIM Coverage to kick in. Speak to a lawyer -- this is not something that anyone should handle on their own because the claims can be tricky.

I regularly handle Underinsured Motorist Claims for my clients. For various reasons, UIM Claims are a favorite of mine.