Stephen Rosen • Sep 12, 2024
Dealing with an underinsured motorist (UIM) claim is a process fraught with complexity, requiring claimants to navigate intricate legal and insurance frameworks, often while recovering from the physical and emotional trauma of an accident. At Rosen Law Offices in Dana Point, CA, we specialize in guiding our clients through this often frustrating process, ensuring that they receive the compensation they deserve. This expanded guide offers an in-depth look at the key stages of handling a UIM claim, common obstacles claimants face, tips for maximizing compensation, and why hiring a local, experienced attorney can make all the difference.
Understanding UIM Coverage: What It Is and Why It Matters
Underinsured Motorist (UIM) coverage is designed to protect individuals when the driver at fault for an accident has insurance but the coverage limits are insufficient to fully compensate for the injuries and damages incurred. In California, where minimum liability insurance limits are set at $15,000 per person and $30,000 per accident, these policy limits often fall short, especially in accidents that result in significant injuries.
The Importance of UIM Coverage
While uninsured motorist (UM) coverage applies when the other driver has no insurance at all, UIM coverage applies when the at-fault driver has insurance that simply doesn’t cover all of the damages. For example, if your total damages amount to $100,000 but the at-fault driver only has the state minimum of $15,000 in liability coverage, your UIM policy may cover the remaining $85,000, assuming your UIM limits are sufficient.
Without UIM coverage, you could be left responsible for covering the gap between the at-fault driver’s insurance and your actual damages, which could include extensive medical bills, lost wages, and long-term rehabilitation costs. This gap could easily run into tens or hundreds of thousands of dollars.
Why UIM Coverage Is Critical in California
California has one of the highest rates of underinsured drivers, with many policyholders opting for the minimum legal coverage required by law. This puts responsible drivers at risk, particularly in major metropolitan areas where accidents are more frequent. UIM coverage acts as a safety net, protecting you from being financially devastated by another driver’s insufficient coverage.
Stacking Coverage: A Misconception
Many people assume that their UIM coverage will “stack” on top of the at-fault driver’s liability policy, but this is not the case in California. Stacking is the practice of combining multiple policy limits to increase the available coverage. For example, if the at-fault driver has $50,000 in liability coverage and you have $50,000 in UIM coverage, you might assume that you would have a total of $100,000 in available coverage. Unfortunately, California law does not allow this type of stacking. Instead, your recovery will be reduced by the amount of the at-fault driver’s policy. In this scenario, the most you could recover would be $50,000 (the difference between your UIM coverage and the at-fault driver’s policy).
Initial Steps: Intake, Investigation, and Filing the Claim
Filing a UIM claim is not as straightforward as notifying your insurer and waiting for compensation. The process involves multiple stages, each of which requires careful attention to detail and strict adherence to deadlines and legal requirements.
Gathering Information
Immediately after an accident, it’s essential to start gathering evidence. This evidence will form the foundation of your UIM claim. Key steps include:
- Traffic Collision Report: Obtain the police report as soon as possible. This document provides an official record of the accident and details critical information such as fault determination, witness statements, and the extent of the damage.
- Insurance Policy Documentation: Ensure that you obtain the full insurance policy of the at-fault driver, not just the “declarations page” that summarizes coverage. This will help verify the policy limits and determine whether a UIM claim is viable.
- Medical Documentation: From the moment you seek treatment, keep detailed records of all medical expenses, treatments, and diagnoses. This will be necessary to calculate the total damages and justify your claim.
- Photographic Evidence: Take photos of the accident scene, vehicle damage, and your injuries. These images can serve as valuable evidence if your claim is disputed by the insurance company.
Hit-and-Run Cases
If the accident involved a hit-and-run driver, special rules apply. In California, UIM coverage can step in if the at-fault driver cannot be identified, but certain conditions must be met. For example, you must file a police report within 24 hours of the accident, and there must be some form of physical contact between your vehicle and the hit-and-run vehicle. Failure to meet these requirements could jeopardize your ability to file a UIM claim.
Who Can File a UIM Claim?
UIM coverage is not limited to the person named on the policy. Several categories of people may be eligible to file a claim under the policy, including:
- The Named Insured: This is the person who owns the insurance policy.
- The Spouse or Relatives of the Named Insured: Immediate family members residing in the same household as the named insured are typically covered.
- Passengers in the Insured Vehicle: Anyone occupying the insured vehicle at the time of the accident may also be eligible to file a claim.
This broad coverage ensures that all occupants of the vehicle, not just the policyholder, can seek compensation through UIM coverage in the event of an accident.
How UIM Claims Are Calculated: A Closer Look at the Math
Understanding how UIM recoveries are calculated can be confusing, especially when dealing with offsets from the at-fault driver’s policy. Here’s a step-by-step guide to how UIM claims are typically calculated:
- Determine Your Total Damages: This includes medical bills, lost wages, property damage, and pain and suffering. Let’s say your total damages amount to $100,000.
- Identify the At-Fault Driver’s Policy Limits: The next step is to determine how much coverage the at-fault driver has. For instance, the at-fault driver’s insurance might provide $15,000 in bodily injury coverage.
- Subtract the At-Fault Driver’s Coverage: California law requires that any amount you recover from the at-fault driver’s insurance be subtracted from your UIM recovery. So if your total damages are $100,000 and the at-fault driver’s policy provides $15,000, your UIM recovery would be limited to $85,000 (assuming your UIM policy covers this amount).
- Check for Policy Limits: Your UIM recovery is limited to the amount of your own UIM policy. If you have $100,000 in UIM coverage, you could recover the remaining $85,000 in the example above. However, if you only have $50,000 in UIM coverage, your maximum recovery would be $50,000, leaving you responsible for the remaining $35,000.
Filing a UIM Claim: What to Expect
After gathering all necessary documentation, the next step is to formally file your UIM claim with your insurance company. The process can be lengthy, and insurers often attempt to minimize their payouts, so it’s crucial to be prepared for potential delays and disputes.
Here are the key stages of the UIM claims process:
1. Submitting the Claim
Once you have all the necessary documentation, submit your UIM claim to your insurance company. The claim should include:
- Traffic collision report
- Medical bills and records
- Proof of the at-fault party’s insurance policy limits
- Income verification if you’re claiming lost wages
2. Arbitration or Litigation
Most UIM claims are resolved through arbitration rather than litigation. Arbitration is typically faster and less formal than a court trial, but it is still a legally binding process. You will need to submit a formal demand for arbitration, often by certified mail, and include detailed documentation supporting your claim.
If the insurer disputes your claim, you may need to seek a court order to compel arbitration. It’s essential to adhere to all deadlines and procedural requirements to avoid jeopardizing your claim.
3. Potential Challenges from the Insurer
Insurance companies are in the business of making money, so they often employ tactics designed to minimize payouts. These tactics include:
- Delaying the process: Insurers may drag out the claims process, hoping that claimants will become frustrated and accept a lower settlement.
- Offering lowball settlements: Initial settlement offers are often significantly less than the policy limits, even if your damages exceed the available coverage.
- Requiring excessive documentation: Insurers may request extensive medical records and other documentation, making the process burdensome for claimants.
Having an experienced attorney on your side can help you navigate these challenges and ensure that you receive the compensation you deserve.
Tips for Maximizing Your UIM Recovery
Navigating a UIM claim can be daunting, but following these tips can help you maximize your recovery:
- Understand the Policy Limits: Make sure you fully understand the limits of both the at-fault driver’s policy and your own UIM coverage. This knowledge will be crucial when calculating your potential recovery.
- Demand Early Medpay: If you have medical payments (Medpay) coverage, request it early in the process. Medpay can help cover immediate expenses, such as hospital bills, before the UIM claim is settled.
- Document Everything: Keep meticulous records of all medical treatments, expenses, lost wages, and any other damages. This documentation will be essential during the arbitration process.
- Hire a Skilled Attorney Early: Working with a lawyer experienced in UIM claims from the start can make all the difference. A knowledgeable attorney will understand the tactics insurers use to minimize payouts and can help you navigate the claims process efficiently. Your attorney can also ensure that all necessary documentation is submitted properly and on time, avoiding any procedural issues that could delay or weaken your case.
- Consider Long-Term Costs: When calculating damages, don’t just focus on your immediate medical expenses. Serious accidents can lead to long-term health problems that require ongoing treatment, rehabilitation, and future lost earnings. Make sure that your claim accounts for these future costs to avoid being left undercompensated.
- Don’t Settle Too Quickly: Insurance companies may offer a quick settlement, but these offers are often far lower than what you are entitled to. It’s important to wait until you fully understand the extent of your injuries and damages before agreeing to a settlement. Settling too early could leave you without enough compensation to cover future medical expenses or lost wages.
- Stay Involved in the Process: While your attorney will handle the bulk of the work, staying involved and informed about your case is critical. Regular communication with your attorney will ensure you are up to date on the status of your claim and help you make informed decisions along the way.
The Arbitration Process: How It Works
Unlike traditional lawsuits that go to trial, most UIM claims are resolved through arbitration. Arbitration is typically faster, less expensive, and less formal than a court trial, but it still involves a legally binding decision. Here’s a breakdown of what to expect during the arbitration process.
Initiating Arbitration
To begin the arbitration process, your attorney will file a formal demand for arbitration with your insurance company. This demand is usually submitted in writing and sent via certified mail. It must include detailed information about the accident, your injuries, and the at-fault driver’s insurance coverage.
The insurer may also request additional documentation, including medical records, proof of lost wages, and evidence of your damages. The goal is to present a comprehensive case that clearly outlines why you are entitled to the full extent of your UIM policy limits.
The Arbitration Hearing
Once arbitration is initiated, both you and the insurance company will present your cases to a neutral third party, known as the arbitrator. The arbitrator functions similarly to a judge, reviewing evidence and making a decision based on the merits of each party’s argument.
In UIM arbitration, there are no jury trials. Instead, the arbitrator will rely on the facts of the case and the evidence provided by both sides. This often includes:
- Medical testimony: Your doctor or medical experts may testify about the severity of your injuries and the necessary treatments.
- Accident reconstruction experts: In some cases, experts may be called to testify about how the accident occurred, who was at fault, and the extent of the damages.
- Witness testimony: Witnesses to the accident may also provide statements about what they saw and how the accident occurred.
Arbitrator’s Decision
After hearing both sides, the arbitrator will make a legally binding decision. This decision will determine how much compensation you will receive, based on the evidence presented. Unlike in a court trial, the arbitrator’s decision is final, and there is limited opportunity for appeal.
It’s important to note that while arbitration is often faster than litigation, it is still a formal legal process that requires careful preparation. An experienced attorney can help you navigate the arbitration process and present the strongest possible case.
Common Insurance Company Tactics
Insurance companies are for-profit entities, and their primary goal is to minimize payouts. When dealing with a UIM claim, it’s important to be aware of some of the common tactics insurers use to reduce their financial liability. Here are some strategies you might encounter:
1. Delaying the Process
One of the most common tactics used by insurance companies is to delay the claims process. By dragging their feet, insurers hope that claimants will become frustrated and desperate for money, leading them to accept a lower settlement. This tactic is particularly harmful for individuals facing mounting medical bills or who are unable to return to work due to their injuries.
Tip: Stay patient and allow your attorney to handle any negotiations. Accepting a low offer out of frustration can leave you without enough compensation to cover your future expenses.
2. Offering Lowball Settlements
Insurers often make initial settlement offers that are far below what claimants are entitled to. These offers are designed to save the insurance company money by hoping that claimants, unfamiliar with the full value of their case, will accept the offer without negotiating for more.
Tip: Never accept the first settlement offer without consulting an attorney. Your attorney will evaluate the full extent of your damages and negotiate for a fair settlement.
3. Requiring Excessive Documentation
Some insurance companies request extensive documentation, such as complete medical histories, detailed wage records, and unrelated information, to delay the claims process or to find reasons to deny the claim. They may also request repeated medical exams or second opinions, hoping to find discrepancies in the claimant’s injuries or treatment.
Tip: Work closely with your attorney to provide only the necessary documentation. An experienced lawyer can help push back against unreasonable requests and keep the process moving forward.
4. Blaming the Claimant for the Accident
In some cases, insurance companies may try to reduce their liability by claiming that the accident was partially or entirely the claimant’s fault. They may argue that you were driving recklessly, not wearing a seatbelt, or engaging in other risky behavior that contributed to the accident or your injuries.
Tip: Document everything related to the accident, including photos of the scene, witness statements, and police reports. Your attorney will use this evidence to refute any baseless claims of fault.
Legal Considerations and Statutes of Limitation
When dealing with a UIM claim, it’s essential to be aware of the legal deadlines, also known as statutes of limitation, that apply to your case. Failing to file a claim or take action within the appropriate time frame could result in losing your right to recover compensation.
Uninsured Motorist (UM) Claims
In California, the statute of limitations for uninsured motorist (UM) claims is two years. This means that you must either file a lawsuit against the at-fault driver or provide written notice of your UM claim to your insurance company within two years of the accident.
Underinsured Motorist (UIM) Claims
Unlike UM claims, UIM claims do not have a specific statute of limitations. However, you must first exhaust the at-fault driver’s insurance coverage before filing a UIM claim. Once the at-fault driver’s insurance has paid its limits, you have a “reasonable time” to file your UIM claim. What constitutes a reasonable time depends on the circumstances, so it’s important to act quickly and consult with an attorney as soon as possible.
Case Law: In Quintano v. Mercury, the court ruled that a UIM claim must be brought within a reasonable time following the resolution of the claim against the at-fault driver.
Arbitration Demand Deadlines
For UM claims, you are required to file a formal demand for arbitration within two years of the accident. While there is no specific deadline for UIM claims, you must submit a demand within a reasonable time after the at-fault party’s insurance limits have been exhausted.
Why Hire Rosen Law Offices?
At Rosen Law Offices, we specialize in helping clients navigate the complex world of underinsured motorist claims. Our team is deeply familiar with California’s insurance laws, and we know how to negotiate with insurers to maximize our clients’ recoveries.
When you hire us, you can expect:
- Personalized Attention: Every case is unique, and we take the time to fully understand the details of your accident and injuries. We’ll develop a customized strategy designed to get you the compensation you deserve.
- Local Expertise: Based in Dana Point, CA, we are familiar with the local court systems, arbitration procedures, and the tactics used by California insurance companies. Our local expertise allows us to navigate your case with precision and efficiency.
- Aggressive Negotiation: We don’t back down when dealing with insurance companies. We’ll fight to ensure that you receive full and fair compensation for your injuries, medical expenses, lost wages, and other damages.
- A Track Record of Success: Our firm has a proven history of successfully handling UIM claims. We understand the nuances of California’s insurance laws and have helped countless clients recover compensation after being involved in accidents with underinsured drivers.
If you’ve been injured in an accident with an underinsured driver, don’t hesitate to reach out to us. We’ll guide you through every step of the process and fight for the compensation you deserve.
For more information or to schedule a consultation, visit www.snrosenlaw.com.
Conclusion: Take Action Now to Protect Your Rights
Handling a UIM claim is not a simple process, especially when dealing with the complexities of insurance companies and arbitration. By understanding your rights, gathering the necessary documentation, and working with an experienced attorney, you can significantly increase your chances of a successful outcome.
At Rosen Law Offices, we are here to help you navigate the complexities of UIM claims and ensure that you receive the compensation you deserve. If you or a loved one has been involved in an accident with an underinsured driver, contact us today for a consultation.
