What is an underinsured driver?

An underinsured driver typically holds a liability insurance policy that provides the minimum amount of coverage allowed by California law. Such insurance provides up to $15,000 in medical expenses to an individual injured by another driver, and a maximum of $30,000 for two people or more. If that amount is not enough to cover the damages that have been caused by the accident, the responsible driver is said to be underinsured. In cases of catastrophic injuries, even a driver who has more than the minimum liability insurance coverage can be considered underinsured – since the insurance policy limits may not cover the full extent of the damage caused. It’s important to note that while the driver of the car that hit you may be underinsured, he or she may not actually own the car. If this is the case, the car owner’s insurance company may be responsible for compensating you – if the car owner has insurance.

Estimates of the number of uninsured drivers in California range from 15 percent to 25 percent. Why do these car owners choose to ignore the mandatory insurance law? Generally, the reasons are economic. Uninsured drivers are more likely to be driving a vehicle that is old and improperly maintained. Your chances of being hit by an uninsured driver may be higher than you think.