Uninsured & Underinsured Motorist Coverage in California: A Complete Guide

What California Law Requires

California Insurance Code § 11580.2 requires all auto insurers to offer UM/UIM coverage. You can waive it in writing, but doing so is almost always a mistake. The minimum UM/UIM limits mirror the state's minimum liability limits: $30,000 per person / $60,000 per accident for bodily injury (as of January 1, 2025). However, you can and should purchase higher limits — $100,000/$300,000 or more is recommended. The premium difference is modest; the protection is enormous.

Uninsured Motorist (UM) Coverage: What It Covers

UM coverage pays for your injuries when you are hit by a driver who has no liability insurance at all, or by a hit-and-run driver who cannot be identified. It covers medical bills, lost wages, and pain and suffering — the same damages you could recover from the at-fault driver if they had insurance. In California, UM coverage also extends to passengers in your vehicle and, in some circumstances, to pedestrian accidents. Importantly, UM coverage is first-party coverage — you are making a claim against your own insurer.

Underinsured Motorist (UIM) Coverage: When the Other Driver's Insurance Isn't Enough

UIM coverage applies when the at-fault driver has insurance, but their policy limits are insufficient to cover your damages. For example: the at-fault driver has $30,000 in liability coverage, but your medical bills alone are $100,000. Your UIM coverage can make up the difference, up to your UIM policy limits. In California, UIM coverage is 'excess' coverage — it pays the gap between the at-fault driver's policy limits and your actual damages, not the full amount of your damages minus your deductible.

How to Make a UM/UIM Claim

Report the accident to your insurer promptly and notify them that you intend to make a UM/UIM claim. Your insurer will investigate the claim — but remember, even your own insurer has a financial incentive to minimize your payout. Document everything: medical records, bills, lost wage documentation, and evidence of pain and suffering. Do not accept a settlement offer without understanding the full extent of your injuries. Once you sign a release, you cannot reopen the claim.

UM/UIM Arbitration in California

Most California UM/UIM policies require binding arbitration to resolve disputes about coverage or the amount owed — you cannot sue your own insurer in court for a UM/UIM dispute (with limited exceptions). Arbitration is a private proceeding before a neutral arbitrator. While faster than litigation, the outcome is final and binding. Having an experienced attorney represent you in arbitration is critical — insurance companies send experienced adjusters and lawyers to arbitration; you should too.

Bad Faith UM/UIM Claims

Your insurer has a legal duty to handle your UM/UIM claim fairly and in good faith. If your insurer unreasonably delays, denies, or underpays your claim, they may be liable for bad faith — which can result in damages beyond your policy limits, including attorney fees and punitive damages. Signs of bad faith include: failing to investigate promptly, offering an unreasonably low settlement without explanation, misrepresenting policy terms, or conditioning payment on unreasonable demands.

Key Takeaways

• 1 in 7 California drivers is uninsured — UM/UIM coverage is essential
• UM covers you when hit by an uninsured or hit-and-run driver
• UIM covers the gap when the at-fault driver's limits are too low
• Most UM/UIM disputes go to binding arbitration, not court
• Your own insurer can act in bad faith — document everything
• Never sign a UM/UIM release without understanding your full damages

Frequently Asked Questions