Insurance Company Obligations in an Uninsured Motorist Case
California's Insurance Code imposes specific protections for drivers injured by uninsured or underinsured motorists.
California is one of the leading states in the nation for uninsured and underinsured drivers. An underinsured driver is one who carries liability coverage, but the amount of coverage is insufficient to compensate for the damage caused by that driver.
This is a very common situation, because California's minimum liability limits were set over 40 years ago--in the 1970s! Those limits--$15,000.00--are too often insufficient to compensate injured drivers.
When an injured driver presents an underinsured motorist claim, the California Insurance Code requires the insurance company to treat their insured at least as good as they would treat themselves. The insurance company cannot place its interests above their insured driver's interests.
A key case that analyzed insurance company obligations in underinsured motorist cases was the 2007 California Supreme Court case of Wilson v. 21st Century (42 Cal.4th 713).
In Wilson, the plaintiff was injured in a collision caused by a drunk driver. The plaintiff collected the full $15,000 from the offending driver's policy, then attempted to collect under her own policy using her underinsured motorist coverage. She had serious cervical spine injuries and presented her claim for $85,000.
The plaintiff's insurer, 21st Century, denied her claim. One of the reasons was because the plaintiff was studying abroad in Australia. The insurance claims adjuster decided that the plaintiff's injuries were not that severe if she was able to live in a foreign country.
The California Supreme Court took issue with this logic. The Court pointed out that a plaintiff could suffer serious injuries just the same in Australia as in California. The Court also noted that an insurance company can be found to behave unreasonably if the insurer ignores evidence available to it which supports the plaintiff's claims. It is improper for the insurer to just focus on facts that justify denial of the claim.
The Wilson case continues to be good precedent for understanding an auto insurance company's obligations to its insured drivers in California uninsured and underinsured motorist cases. Sadly, not all insurance company adjusters have gotten the memo from Wilson, and too many focus on trying to protect insurance company interests, and not those of their insured customers.
If you or someone you know was injured by an uninsured or underinsured driver in California, speak to a lawyer knowledgeable about the obligations and unique nuances of California's underinsured and uninsured motorist laws.
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