California law requires drivers to maintain so-called “15/30/5” liability insurance.
15/30/5 means that if the insured is at fault for an auto accident, the insurer will pay up to:
Automobile insurance is available in California in higher amounts than the minimum insurance limits of 15/30/5. Many companies, for instance, offer up to $100,000 per person and $300,000 for total bodily injury per accident.
But many drivers cannot afford or are unwilling to pay the premiums for such insurance. This shifts the burden of paying for medical expenses and other damages after a car accident to private health insurers or government programs such as Medicare and Medi-Cal.
To remedy this California law requires insurers to offer drivers coverage for accidents caused by uninsured drivers. This coverage is known as uninsured motorist coverage, or UMC. And it is comprised of uninsured motorist bodily injury (UMBI) and uninsured motorist property damage (UMPD).
Even when California drivers do pay for insurance, they often elect coverage at the minimum amount. These amounts are often too low to cover damages for all but minor fender benders. They are particularly inadequate in cases of serious accidents when there are multiple occupants in the car.
Under-insured motorist coverage treats the other driver as uninsured for damages in excess of the at-fault driver’s policy limits up to the policy limit of the driver with the underinsured motorist coverage.
Private health plans and programs such as Medicare and MediCal will pay medical costs after a car accident regardless of whose fault the accident was.
But many people have policies with high deductibles and copays. And health insurance plans do not cover services such as chiropractic care and acupuncture. Nor will they pay to fix property damages to cars or cover lost work time or pain and suffering.
UMC/UIM is first-party insurance that allows plaintiffs to recover from their own insurance company for all their compensatory damages after an accident that is not their fault.
California insurers generally offer customers uninsured/underinsured policy limits equal to a driver’s liability policy limits.
So, for instance, if a driver has purchased 50/100 limits for accidents that they cause, they can usually purchase 50/100 policy limits for accidents caused by other drivers who are uninsured or under-insured.
In California, a driver may not collect more for injuries caused by an uninsured or underinsured motorist than the amount of insured’s policy limits. This is different than in some states (such as Nevada) in which uninsured motorist claim policies cover all damages caused by uninsured or under-insured drivers.
A California umbrella policy offers extra coverage
A driver who wants more insurance than the maximum UMC/UIM coverage available in California must purchase an umbrella policy. Umbrella policies are relatively inexpensive and can be applied to cover excess losses under any policy of insurance carried at the maximum available limits.
You should discuss your needs with your insurance broker. But generally speaking, to waive uninsured motorist coverage is not a good idea unless you have very very good health insurance and either do not work or have a very comprehensive disability insurance policy.