What's the difference between Uninsured and Underinsured Motorist Insurance?

You're Injured, Now What?

An update to keep you informed on personal injury situations.

There seems to be some confusion as to what separates uninsured and underinsured motorist insurance, so let me break it down for you. Uninsured motorist insurance covers you if you get hit by someone without insurance. Underinsured motorist policies cover you when you get hit by someone who causes more damage than what their policy covers. So say you’re driving along and all of the sudden a car pulls out of a shopping center and right into the side of your car because the lady behind the wheel was too busy drinking her latte to look both ways as she exited the center. You guys pull over to the side of the road and exchange information. She’s very apologetic and gives you all of the contact and insurance information you need with no hassle then drives off. Well, turns out she has the most minimal coverage policy legal in the state of California and it won’t cover all of the damage that she caused. Not to worry though because you invested in an underinsured motorist policy that covers the difference between the damage the other lady caused and the small amount her insurance covers. Basically, these policies protect you from having to pay out of pocket for the damages caused by individuals who lack adequate insurance. Believe it or not, some people are not as considerate as you and will in fact leave you with the bill even if they are at fault for all damages. As of 2012, 14.7% of motorists in California were uninsured. This means that 1 out of 7 vehicles on the road carried no form of insurance. As cliché as it sounds, it really is better to be safe than sorry; better to pay a higher insurance premium than to be stuck footing  the bill for damages that were not your fault. 

Are you covered? Know your limits

You're Injured, Now What?

An update to keep you informed on personal injury situations.

The Law Offices of Kennith L. Peterson is your local auto accident expert.  We service Yorba Linda, Placentia, Anaheim, Tustin, Brea, Fullerton, and surrounding areas.  When we meet with clients who have been involved in automobile accidents, one of the first things that we ask our clients is the level of coverage that they have for uninsured / under insured motorists.  A good percentage of the time, our clients do not know their policy limits in this regard.  We usually have to take a look at the insurance policy to confirm what their coverage is.  May times the uninsured / under insured coverage is not at the same level as their liability policy.  Many times it is only a 15/30 policy which means that the most that you can claim for an individual is $15,000.00. 

We encourage our clients to have the uninsured / under insured coverage to be the same as the limits for their liability portion of their policy.  The uninsured / under insured policy is really insurance for monies to be paid directly to the policy holder as opposed to the monies being paid to someone else.  Recent studies estimate that as many as 1 in 4 drivers in California are uninsured.  That does not take into consideration the number of drivers who are under insured.  Under insured means that while a driver has insurance, they do not have adequate insurance to cover the damages that arise when they are involved in an automobile accident.  If you take into consideration the uninsured motorists on the road, as well as the under insured motorists, you are probably talking about the majority of the drivers in California.  That means that it is very important to carry adequate uninsured / under insured automobile insurance.  Our recommendation is to carry a minimum of 100/300 thousand uninsured / under insured policy.  However, if you can afford it, the uninsured / under insured policy should be a 250/500 thousand policy or more.  If you are carrying a 250/500 thousand policy for uninsured / under insured motorists and you are involved in an automobile accident, there will be at least $250,000.00 available in insurance to cover your medical costs, loss of earnings, and personal injury.  

Do you have enough Insurance?

You're Injured, Now What?

An update to keep you informed on personal injury situations.

I don’t think that insurance companies generally inform their clients adequately about the risk of having inadequate insurance coverage.  In California you are legally insured if you have a minimal policy of 15/30 coverage.  This gives up to $15,000.00 coverage for a single individual’s claim.  It will pay out as much as $30,000.00 for claims from two or more individuals.  When you purchase automobile insurance the question that arises is how much insurance do you need.  It boils down to what risk an individual is willing to take by purchasing minimal insurance.  In a worst case scenario a driver can be involved in an accident that causes millions of dollars in damages.  Most insurance’s are not adequate for those types of cases.  Studies show that the median award is $28,000.00.  This means that while the 15/30 minimal policy is inadequate, a 50/100 policy is usually adequate.  However, if you own a house with any significant equity you really should have an umbrella policy that increases the coverage up to one million dollars.  We have heard that insurance companies tell their insured’s not to be too concerned because most personal injury firms will only make policy limits demands.  I can’t speak for other firms but I know that, depending on the case, we do an asset check before we recommend to our client to make a policy limits demand only.  Just recently our firm collected $145,000.00 over the $50,000.00 insurance which the driver had.  In that case, even a 100/300 policy would have been inadequate.  The defendant owned his home free and clear.  He also had significant cash deposits in various accounts.  That individual should have had a one million dollar liability policy to have been properly insured.  If you have been involved in an accident in the Placentia, Yorba Linda, Anaheim, Fullerton, or Brea area, look to The Law Offices of Kennith L. Peterson for local representation.  We are the Placentia auto accident attorneys. 

HAVING THE RIGHT TYPE OF AUTOMOBILE INSURANCE IS IMPORTANT

You're Injured, Now What?

An update to keep you informed on personal injury situations.

Having adequate automobile insurance is critical.  California requires a minimal policy for liability insurance of $15,000.00 for a single claim and at least $30,000.00 for multiple claims.  However, some of the most important parts of automobile insurance are not mandated by California law.  They are optional.  The uninsured/underinsured motorist portion of automobile insurance is optional.  This is the insurance that pays out to the insured in the event that the other driver is either uninsured, or underinsured.  We suggest that at a minimum the uninsured/underinsured motorist is at least at the same level as the liability insurance portion.  One other aspect of automobile insurance that is often overlooked is the portion that provides for medical pay.  This is the part of the policy that will reimburse you directly for out-of-pocket medical expenditures.  Usually all that is required from your insurance policy is for you to provide copies of the receipts for which you have paid.  The other requirement is that the payments relate to medical care caused by an automobile accident.  The medical pay portion of your automobile insurance can be very helpful in minimizing the financial burden sometimes caused by medical payments for injuries arising out of an automobile accident.  Medical pay policies can range from Two Thousand Dollars on up to One Million Dollars.  While a policy for One Million Dollars is probably not needed for medical pay, a policy up to Fifty Thousand Dollars or more may be very helpful.

If you have any questions about having adequate automobile insurance, give The Law Offices of Kennith L. Peterson a call for a free consultation.  If you are involved in an automobile accident and want to know what your rights are under your existing automobile policy check with the personal injury experts at the Law Offices of Kennith L. Peterson.  We are the personal injury experts serving the communities of Placentia, Yorba Linda, Fullerton, Brea, Tustin, and Anaheim.