In fact, buy the highest limits you can afford.
"Charlie" is a hard working 50-year-old, self-employed mechanic and is at a full-stop, when a huge truck smashes into him. Not only is his truck totaled out, he is physically 'totaled' too. He can no longer work. He is the sole wage earner for his family. The accident has caused him to lose business and his home goes into foreclosure because, at the time of the accident, the party who hit him had no insurance. "Charlie" carried no Uninsured/Underinsured Motorist Coverage. He receives nothing.
In the State of California, Uninsured/Underinsured Motorist (UM/UIM) Coverage can be waived, BUT DON'T DO IT! Don't end up like Charlie. When it comes to this type of coverage, buys as much as you can afford. Why you ask?
First, some terminology...
What is Uninsured Motorist (UM) Coverage?
This is coverage you purchase to protect yourself and your passengers, in the event someone hits you and they do not have insurance. When you have this coverage, instead of being 'out of luck,' you can seek recovery of money from your own insurance carrier.
What is Underinsured Motorist (UIM) Coverage?
This coverage comes into play when someone hits you and they have insurance; however, they do not have enough insurance to cover your injuries. In this situation, you collect the entire amount of coverage that the person who hit you carries. Thereafter, you can seek the difference, to the extent that you can prove your damages against your own insurance under this coverage.
The sad fact is that over the past thirty-years, I have represented seriously injured Plaintiffs who did not have said coverages. This includes, doctors, lawyers, gardeners, house wives, self-employed persons, you name it. The most startling thing to me, is how many insurance brokers and insurance companies DO NOT EXPLAIN the importance of this coverage.
How Much UIM/UM Coverage Do I Need?
Again, the most you can afford. Coverage for UIM/UM can come as $15,000, $30,000, $50,000, $100,000, $250,000, $300,000, $500,000, $1,000,000.00. What you need to do is think about how much you would need to live if you got injured and could not work, that is a good start. In one quick second your life can change.
A final point regarding these coverages in California. The insurance from the “at fault” party, does not “stack” on top of your own coverage. You can collect the difference between the two to the extent you prove your injuries. In the event you have to sue your own insurance company, don’t expect them to treat you “like a good neighbor” as one such insurance company advertises.
Common sense notes from