The Most Controversial Coverage
A lot of people tend to dislike that they have to pay for Uninsured/Underinsured Motorist coverage because it feels like having to pay for someone else's car insurance.
And... that's because it is. The combination of UM/UIM coverage plus low liability minimums in the state of California creates a system where there are gaps in protection only filled by paying more for UM/UIM.
It's not an insurance conspiracy to get policyholders to pay more though, it's more of a conscious effort by state legislators to create a progressive cost system for coverage.
Simply put:
- if you make more money and have more assets, you're INTENDED to pay more for insurance by paying for UM/UIM
- if you have less money and assets you have the option to pay less for insurance by paying for lower liability maximums.
What Does it Actually Cover?
When you're hit by another driver that doesn't have any insurance or not have enough insurance, this will pay for your physical car damages, injuries, lost wages, and pain and suffering. Basically anything that someone else's liability insurance is meant to cover.
Crucially, it also covers hit & runs of all types.
Doesn't Collision Coverage and Medical Payments cover the same thing?
Yes, lots of coverages provide "double coverage" in some instances, but never in all instances. So if you're hit by an uninsured driver while not carrying UM/UIM, you can have a collision claim cover your vehicle (you still pay the deductible), and you can have Medical Payments cover medical costs for you and passengers (when not paid for by health insurance).
What UM/UIM does cover that Collision and Med Pay do not is lost wages or the pain and suffering that often come from a bad accident.
UM/UIM will also kick in if your Med Pay maximums get hit.
How Much UM/UIM Should I Get?
Prioritize collision over UM/UIM if you're needing to make that decision.
After that, UM/UIM is mostly
- how much would you need to recoup in wages for 6 months
- how much would be enough for pain and suffering
The format is the same as Liability where (100/200) would mean $100,000 maximum per person and $200,000 maximum per accident.
Why Aren't There More Punishments for Uninsured Driving?
I've had to use UM/UIM insurance once. It was a hit and run on my car that was parked out in front of my place. We were able to get a license plate from a neighbor's camera and the police paid the runner a house visit.
The driver was an old retired veteran. He gave the officer his USAA policy number and that number made its way to my insurance.
Turns out that policy number hasn't been active for years.
So this retired veteran, who used to carry insurance but presumably had to make the choice to no longer pay for it, is most likely on a fixed income. Presumably his only vehicle is pretty damaged.
On the neighbor's camera you can see him pull over, sitting in the car deciding what he should do. Of course he decides to take off, but you can kind of tell that he wants to do the "right thing" but literally can't in that moment - he has no insurance and can probably hardly afford his own damages let alone mine.
So yeah, he shouldn't be driving and that's selfish of him, but the last thing anyone is doing is trying to slap a heavy fine on him.
If someone's driving around without insurance there's probably a story going on there that we can give the benefit of the doubt to.
