Under-insured Coverage in California

[jwc]

I would appreciate comments from those who might have knowledge and experience on the following issue.

I was involved in a 3 car accident. The party at fault rear-ended the car behind me which hit my car. He only has the minimum liability coverage ($5,000) which cannot cover the total damage of my car and the other car.

I filed an under-insured claim against my policy with Farmers. I only have liability coverage on my car also, but I do have uninsured and underinsured coverage.

Now Farmers informed me that the under-insured coverage only covers injury and not property damage, under California law. Farmers said that California law actually does not allow extending under-insured coverage to property damage.

Does anyone know if what Farmers said is true?

 

[FullAuto]

I would appreciate comments from those who might have knowledge and experience on the following issue.

I was involved in a 3 car accident. The party at fault rear-ended the car behind me which hit my car. He only has the minimum liability coverage ($5,000) which cannot cover the total damage of my car and the other car.

I filed an under-insured claim against my policy with Farmers. I only have liability coverage on my car also, but I do have uninsured and underinsured coverage.

Now Farmers informed me that the under-insured coverage only covers injury and not property damage, under California law. Farmers said that California law actually does not allow extending under-insured coverage to property damage.

Does anyone know if what Farmers said is true?

That is correct for my state. Uninsured/Underinsured is for injury, not property damage.

 

[moneymaker1]

I am a Farmers agent and the answer to your question is that uninsured/underinsured isn't different from company to company. UM/UIM pays bodily injury only.

In this situation you WOULD have coverage on your car if you carried UMPD (Uninsured Motorists Property Damage). If your insurance agent sold you a liability only policy without that coverage, I would go back to that person and ask them why. Look at your policy and check it out - if you have UMPD, you are covered for that. Good luck to you.

 

[jwc]

MoneyMaker1,

Thanks for the input.

My policy explicity stated that I have uninsured motorist BI and PD coverage, but no underinsured declaration. The local claims office of Farmers looks at my policy and said that I don't have underinsure motorist coverage, and hence won't be covered for the balance of my car repair.

I am still discussing with Farmers on this. I have been trying to understand how the insured/underinsured are being handled by the carriers as permitted by the California insurance law.

 

[butterflySER]

I heard of situations with mutiple car accident like this, usually the one behind you would payout on your damages and the one bhind them would pay out to them. My understanding is the Umbi would only payout for the medical part and the umpd would pay out for the property damage (only if they did not have insurance at all, on the property part)

 

[djs]

Correct, UMPD would not apply here, since there was insurance.
UM/UIM coverage would not apply at all to property damage.

How much damage is done to your car? What is it worth? If the car had much value, you should have collission coverage on it for things like this. If it didn't have much value, how did it go over $5K, or are they putting everything on the person in the back, who only had $5K of coverage?

General coverage definitions are pretty generic from one carrier to the next. Wording in endorsements can get to be different, but even they tend to follow the same guidelines. What you are talking about is not Farmers specific, just the way it works in California.

Dan

 

[Sales71]

U can take them to small court it's that simple. U can get up to $7500 in CA.

 

[djs]

Well, you can get a judgement. Getting the money is another story.

Dan

 

[superfly33]

In this situation you WOULD have coverage on your car if you carried UMPD (Uninsured Motorists Property Damage). If your insurance agent sold you a liability only policy without that coverage, I would go back to that person and ask them why. Look at your policy and check it out - if you have UMPD, you are covered for that. Good luck to you.

UMPD applies if the other party is not insured. Here, the OP states the other party that the other party has $5000 in property damage which doesn't make the other party an uninsured motorist.

 

[jwc]

This is an interesting experience, and I guess I learned it the hard way.

Even not all the consumer hot line support folks at the California Department of Insurance seem to fully understand Property Damage between uninsured and underinsured.

I spoke with 4 people at the CDI. Two said that there is no law that governs underinsured PD, The other two said that as long as I have uninsured PD, I am covered even if the party at fault is underinsured. But one of these two people later retracted his answer (I called him on different days, I guess he must have been confused the first time), and said that underinsured PD does not exist in CA. They pointed me to insurance code 11580.2 which governs uninsured BI and PD, not underinsured.

I suppose the letter of the CA insurance law is that uninsured BI extends to cover underinsured BI, but uninsuerd PD does not extent to cover underinsured PD.

Even insurance agents are confused. Both Farmers and LM agents told me that uninsured and underinsured PD come together, but on their policies/quotes, only uninsured coverage is stated.

So, I think the bottom line is that there is no underinsured PD coverage in CA. If someone hit your car, you better hope that he either has full coverage or is uninsured.