Nearly every insured driver in California has coverage that provides for compensation in the event of a crash with an uninsured or underinsured motorist. Since almost half of two car collisions are caused by uninsured or underinsured drivers, this coverage can provide a valuable safety net to pay for medical bills and other expenses when the at-fault driver does not have an adequate insurance policy.
In California, your automobile insurance firm must provide uninsured motorist coverage unless you specifically ask them not to; most drivers recognize the benefit of carrying such coverage, and retain it in their policies. But, even though most drivers have some form of underinsured motorist coverage, they may not possess the level of protection they thought. A new bill circulating in the California legislature seeks to change the current law and force insurance companies to pay the full value of underinsured motorist policies.
Possible Upgrades to the Old Law
The purpose of uninsured/underinsured motorist coverage is to make sure there are funds available to compensate you for losses, financial and otherwise, sustained at the hands of a driver without a large enough policy to pay for your damages (your losses from hit-and-run drivers are also covered by this policy feature). In the current system, however, some insurance company practices are undermining the very purpose of underinsured motorist coverage.
Under existing law, when you are struck by an underinsured motorist, your insurance company is permitted to subtract the value of any policy the other driver did carry from your personal coverage. In other words, insurers only have to pay the difference between your policy and the at-fault driver's coverage.
For example, imagine you had purchased $150,000 of underinsured motorist coverage. Subsequently, you are in an accident caused by a driver carrying only a $70,000 liability policy. Your medical bills, lost wages and other damages amount to over $250,000. You may feel entitled to collect the full $220,000 of both policies, thinking you were insured for the entire value of $150,000 over and above whatever the other driver provided to pay for your expenses. But, under current standards, after you received the $70,000 from the underinsured driver, your insurance company would only have to provide an additional $80,000, bringing your total payment from all sources up to your policy amount of $150,000.
Lawmakers and policy advocates are now striving to ensure that motorists receive the full value of the coverage amount they purchase. Assembly Bill 1063, introduced earlier this year by Assembly Member Steven Bradford, would force insurers to pay up to the entire value of an underinsured motorist policy should the damages from a car accident go above and beyond the other driver's coverage; instead of subtracting one policy amount from another, if passed, Assembly Bill 1063 will require insurance companies to contribute the full policy amount to pay for actual damages. If the law is passed, in the above example, you would receive $150,000 from your insurer in addition to the $70,000 provided through the other driver's coverage.
Difficulties in Passing a Buffer Against the Dangers of Underinsured Drivers
When an accident is caused by an uninsured or underinsured driver, there is often no way for the injured parties in the other vehicle to pay for their resulting losses. Assembly Bill 1063 would help ensure a larger pool of funds to compensate wrongly injured motorists, and would also promote transparency in the process of selecting insurance coverage.
However, not everyone is behind Assembly Bill 1063. The insurance industry opposes the bill and the increased costs it could mean for them. Backed by a war chest of campaign contributions, insurance companies have succeeded in putting Assembly Bill 1063 on hold, at least for now.
After a recent vote by the Assembly Committee on Insurance, Assembly Bill 1063 has been reassigned for further study. While this does not mean the bill has been killed, it will certainly stall the process of getting it passed into law. Supporters of 1063 have strenuously reiterated their intentions to continue efforts to get the bill back on the legislative floor.
Take Action
If you support heightened protections for wrongfully injured drivers, it is important to let your government representatives know how you feel about Assembly Bill 1063.
Furthermore, if you or a loved one has been injured in a car accident, do not allow insurance companies to placate you with less than you deserve. Contact an experienced personal injury attorney today to ensure you are provided with adequate compensation for your losses.
