Their Limits Ran Out Before Your Bills Did
The at-fault driver was insured. Their limits were modest, the injuries were not, and the offer that arrives is the most their policy can pay. That is where underinsured motorist coverage is supposed to step in — and where California's version surprises people.
How California measures "underinsured"
Under Insurance Code section 11580.2, underinsured motorist coverage in California operates on the difference between your own UIM limit and the at-fault driver's liability limit. If your limit is not higher than theirs, there is nothing for it to reach — even if your losses far exceed both. This is the single most misunderstood coverage in the state, and it is why buying UIM at the same limit as everyone else's minimum accomplishes very little.
The two mistakes that end a claim
- Settling with the other driver without your carrier's written consent. Your policy will require you to notify your own insurer and obtain consent before you release the at-fault party. Sign the release first and you can forfeit the UIM claim entirely. Get the consent in writing before anything is signed.
- Letting the clock run. Uninsured and underinsured motorist claims carry their own deadline, commonly described as two years from the date of the accident to settle, file suit or demand arbitration. It runs while you are still negotiating, and negotiation does not pause it.
The order of operations
Open a claim with your own carrier early, even before you know whether the other driver's limits will be enough. Confirm the at-fault driver's liability limits in writing. Document your losses fully. Obtain written consent before accepting the liability settlement. Then present the UIM claim, which your own carrier evaluates — with the odd feeling that comes from negotiating against the company you pay.
Disputes go to arbitration, not court
UM and UIM disagreements are typically resolved through the arbitration process your policy sets out rather than a lawsuit. Read that provision, because it defines your route.
The prevention
Whether you carry it, and at what limit, is decided at the quote — not after. It is generally an inexpensive coverage relative to what it does, though what it costs on your policy depends on your own rating factors.
Ask us what raising your UM and UIM limits would cost on your policy. It is a short conversation with a large downside if it is skipped.
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What is the difference between uninsured and underinsured motorist coverage?
Uninsured motorist responds when the at-fault driver has no coverage. Underinsured responds when they have some but not enough — and in California it works on the difference between your limit and theirs.
Can I settle with the other driver first?
Not without your own carrier's written consent. Signing a release before you have it can forfeit the underinsured motorist claim. Get the consent in writing first.
How long do I have to bring a UIM claim?
These claims carry their own deadline, commonly described as two years from the accident date to act. It keeps running during negotiation, so calendar it rather than relying on the process.