In this article 8 sections
Most people think about car insurance in terms of what it pays when they cause a crash. But one of the most important parts of your policy only matters when someone else causes it: uninsured and underinsured motorist coverage, usually shortened to UM/UIM.
Here is the situation it is built for. A driver runs a red light and hits you. You are hurt, you miss work, and the medical bills start arriving. Then you learn the other driver has no insurance at all, or carries only the state minimum, which may not come close to covering a serious injury. At that point, the coverage you chose on your own policy, sometimes years earlier and often without much thought, can decide whether your losses get paid.
Here is how UM/UIM works under California law, the deadlines that come with it, and how to think about your limits.
How Common Are Uninsured Drivers in California?
More common than you might think. The Insurance Research Council estimated that 20.4 percent of California motorists were uninsured in 2023, roughly one driver in five, placing California among the ten highest states that year.
Even when the other driver is insured, the coverage may be thin. For policies issued or renewed on or after January 1, 2025, California’s minimum liability limits are $30,000 for injury or death of one person, $60,000 for injury or death of two or more people in one accident, and $15,000 for property damage (often written as 30/60/15). Those minimums were raised from 15/30/5 by SB 1107, and the law schedules another increase for policies issued or renewed on or after January 1, 2035, to 50/100/25.
Thirty thousand dollars can disappear quickly after an emergency room visit, imaging, and a few months of treatment. That gap is where UM/UIM comes in.
What UM and UIM Actually Cover
Uninsured motorist (UM) coverage pays, up to your limits, the amount you would be legally entitled to recover for bodily injury or wrongful death from an at-fault driver who has no applicable insurance. Under California Insurance Code section 11580.2, “uninsured” also includes several situations people don’t expect:
- The at-fault driver’s insurer denies coverage or will only accept it conditionally.
- The at-fault driver’s insurer becomes insolvent within one year of the accident (in limited circumstances).
- A hit-and-run driver whose identity can’t be determined, if certain conditions are met (more on those below).
Underinsured motorist (UIM) coverage applies when the at-fault vehicle is insured, but for less than the UM limits on your own policy. California treats UM and UIM as a single coverage, and the statute requires UIM to be included in policies that carry UM.
Who is covered can be broader than you think. If you are the named insured as an individual, the statute’s definition of “insured” generally includes your spouse and relatives living in your household, as well as other people riding in your insured vehicle. Your policy’s exact wording controls the details.
A few things UM/UIM under section 11580.2 does not do: it does not cover property damage to your car, and it does not apply where the payment would benefit a workers’ compensation carrier. Each policy also has its own exclusions, so it is worth reading yours.
You Have It Unless You Signed It Away
California does not let insurers quietly leave UM coverage off an auto liability policy. Under section 11580.2(a), every policy of bodily injury liability insurance for a motor vehicle must include UM coverage unless you and the insurer agree in writing, using specific statutory language, to:
- delete it completely,
- delete it when a named person is driving, or
- carry it at limits lower than the statute calls for, but not lower than the state’s financial responsibility minimums.
That written agreement binds everyone insured under the policy and carries forward into renewals and replacement policies with the same insurer. A waiver signed years ago can still control your coverage today. If you are not sure what you signed, ask your agent or insurer for a copy and check your declarations page.
Choosing Your Limits
The statute says UM coverage must be offered with limits equal to your bodily injury liability limits, although the insurer is not required to offer UM above $30,000 per person and $60,000 per accident under that subdivision. UIM must be offered at limits equal to your UM limits and may be offered higher. In real life, many insurers will sell UM/UIM to match higher liability limits; you usually just have to ask.
Here is why the number matters so much for UIM in particular. Because a vehicle only counts as “underinsured” when its liability limits are lower than your UM limits, and because the UIM insurer’s maximum is reduced by what the at-fault driver’s insurer pays, low UIM limits can leave you with nothing.
Consider a hypothetical: you carry UM/UIM at $30,000 per person. A driver with a $30,000 minimum policy causes a crash that leaves you with $150,000 in losses. The at-fault insurer pays its $30,000 limit. Your UIM limit is $30,000, minus the $30,000 already paid, which equals zero. Now change one fact: you carry $250,000 in UIM. After the $30,000 from the other driver, your UIM coverage could be available for the remaining losses up to that limit, assuming you prove fault and damages.
A few more points that affect how much is really available:
- No stacking. California law says limits for two or more vehicles or two or more policies cannot be added together to increase coverage, regardless of how many premiums you pay.
- Offsets are possible. Your policy may reduce UM damages by amounts paid under your medical payments (MedPay) coverage, and the statute allows reductions for workers’ compensation benefits.
Higher limits cost more, and only you can weigh that against your budget. But this is coverage that protects you and your family, not other people. And with the minimum now 30/60, a UIM limit of 30/60 will rarely come into play against an insured driver.
The Rules That Trip People Up
UM/UIM is a claim against your own insurer, but that does not make it simple. Missing these requirements can cost you coverage.
The two-year rule
Under section 11580.2(i), no claim accrues under UM coverage unless, within two years from the date of the accident, you have done one of three things:
- Filed a lawsuit for bodily injury against the uninsured motorist,
- Reached an agreement with your insurer on the amount owed, or
- Formally started arbitration by notifying your insurer in writing by certified mail, return receipt requested.
Once arbitration is started, it generally must be concluded within five years, with a different timeline possible if you also have a workers’ compensation claim from the same accident. Courts may excuse missed deadlines in some cases under doctrines like estoppel and waiver, but you should never plan around that. Separately, the general deadline to sue an at-fault driver for personal injury in California is two years under Code of Civil Procedure section 335.1.
The statute also requires your insurer, when a UM claim is pending, to notify you in writing of the applicable statute of limitations at least 30 days before it expires, unless the insurer knows you have an attorney.
Exhaustion for UIM claims
UIM coverage does not apply until the liability limits of every policy covering the at-fault vehicles have been exhausted by payment of judgments or settlements, and you submit proof of that payment to your UIM insurer. The order of events matters.
Don’t settle without your insurer’s written consent
Section 11580.2(c)(3) says UM coverage does not apply if you settle with, or take to judgment, a person who may be liable, without your insurer’s written consent. The rules have nuances, especially for UIM, but the safe practice is to get your insurer’s written consent before accepting the at-fault driver’s policy limits.
Hit-and-run requirements
When the at-fault driver can’t be identified, the statute generally requires that there was physical contact with you or the vehicle you were in, that the accident was reported within 24 hours to the police (or the sheriff or CHP in unincorporated areas), and that you file a sworn statement with your insurer within 30 days.
How UM/UIM Disputes Get Decided
If you and your insurer disagree about whether the other driver was at fault or how much your claim is worth, California law sends that dispute to arbitration before a single neutral arbitrator rather than to a jury. Both sides can use many lawsuit discovery tools, including depositions, and the insurer may request wage information, records releases, and a medical examination.
Go in clear-eyed: your own insurer will evaluate a UM/UIM claim much as the other driver’s insurer would. The advice in our post on whether to accept a first settlement offer applies here too.
What to Do Now, Before You Need It
- Pull your declarations page. Find your bodily injury liability limits and your UM/UIM limits. If UM is missing or lower than your liability limits, there is likely a signed waiver or selection form.
- Ask about higher limits. Get a quote for UM/UIM that matches your liability limits, and consider whether higher liability limits make sense too.
- After a crash, act early. Report hit-and-runs within 24 hours, notify your insurer promptly, and keep the two-year deadline in mind from day one. Our checklist on what to do after a car accident in California covers the first steps.
When to Talk to a Lawyer
UM/UIM claims combine an injury case with an insurance contract dispute, and the deadlines and consent rules are easy to get wrong. We start by reviewing your policy and any signed waivers, identifying every source of coverage, and making sure the right notices go out on time. You can read more about how we approach car accident claims.
If you were hurt by an uninsured or underinsured driver in California, contact Reardon Stodolka for a free consultation at 657.522.7122. We will review your coverage and your options, and you pay nothing unless we recover compensation for you.