Uninsured Motorist and Underinsured Motorist Coverage (UM/UIM) is available as additional insurance coverage in your auto policy. Many overlook or don’t understand the importance of this coverage.
Frankly, in California in the underinsured coverage situation, you can never collect your full limits because of this reduction; thus, you pay for coverage you will never have! But that is the way it is structured in our state. A change should occur so that the full limits are available so we are not a “set off” state anymore.
Example: If you are injured by a negligent motorist with only $15,000 per person coverage in that vehicle’s policy (the minimum limits required), and you have greater coverage for UM/UIM, say $300,000 per person, you have an additional sum of $285,000 available to pay per person for the injuries caused by that negligent motorist. As noted, the amount of coverage for the negligent driver is deducted from your limits so you have the difference available. The “per person” limits on your policy are limited to the “per occurrence” (i.e. for one accident) limits of that policy. For example, you may have $300,000 per person coverage but $500,000 per accident, so the total amount available is limited to $300,000 for any one person, but $500,000 for all persons injured in an accident.