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Can my Insurance Refuse to Pay Underinsured Motorist Benefits in an Accident with Multiple People?

The Minimal Limits of $15,000 in California is Too Low

People are seriously injured by careless drivers everyday in California. One of the biggest issues that arises in our attempts to recover for people is that the insurance coverage is not enough. Unfortunately, California has had the same minimal policy limits of $15,000 for decades. As health insurance costs have done nothing but increase over this time period, the policy limits on the car insurance have stayed low.

Uninsured / Underinsured Motorist Coverage

If the policy limits of the at-fault driver is not enough to cover your damages, your own underinsured motorist coverage should pay the difference between the other driver’s limits and your own. For example, if the defendant has a $15,000 policy, and you have a $100,000 underinsured motorist policy, then you will be able to get $15,000 from the at-fault insurance company, and then another $85,000 from your underinsured motorist company. You won’t be able to get more than $100,000 total in this scenario. But if your policy limits are only $15,000, the same as the at-fault driver, you will not be able to recover anything more from your own insurance.

What Happens When There Are Multiple People in the Accident?

When there are multiple people in an accident, the liability policy limits of the person who is at fault for the accident usually needs to be split. Often insurance policy limits have a per person limit, and a per accident limit. Meaning that each individual person can’t get more than the first number indicated (per person limit), i.e. $15,000, and no more than the second number indicated (per accident limit), i.e. $30,000 will paid out to ALL people in the accident.

This split for the per accident limit may leave you with less money to take care of your damages. If there are three severely injured people in the accident, the at-fault insurance company may offer the combined $30,000 policy limit to all injured people. If this is split 3 ways, you may only be left with $10,000 per person.

Whether Your Own Insurance Will Pay the Difference Depends on Your Coverage Amounts

You may think, well, I have $15,000 uninsured motorist coverage to help me recover the other $5,000 that I didn’t get. This is not the case. A similar problem came up in a case called Lopez v. Allstate Ins. Co., 14 Cal. App. 4th 1835, (1993). In Lopez, there were multiple people injured in an accident and there was only $30,000 of policy limits to go around from the at-fault insurance. Mr. Lopez’ share of that was only $7,500. He settled and then went to his own insurance company, Allstate, to get his other $7,500 from the $15,000 underinsured motorist coverage. Allstate said no, because his policy limits were the same as the other driver, $15,000 per person, $30,000 per accident, therefore Mr. Lopez was not entitled to receive any additional money as the other driver was not underinsured as he had the same limits. The trial court and appellate courts agreed with Allstate and Mr. Lopez was not able to recover the money.

So How do I Protect Myself From This Situation? If Possible, Cover Yourself With More Insurance Coverage

The best thing to do is to protect yourself with higher Uninsured/Underinsured Motorist coverage. Get the highest that you can afford. There is no guarantee that a similar situation won’t happen even if you have the highest coverages, but if you have a higher limit than the at-fault driver, you will be able to recover more from your own insurance company if your damages aren’t fully covered by the at-fault driver.

Uninsured and Underinsured Motorist cases can get very complicated. Feel free to reach out to an experienced attorney here at Woods Williford, P.C. to have your questions answered.
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