What Happens if the Other Driver Only Has Minimum Insurance?
A serious car accident imposes a significant burden on the victim, but the financial consequences can become even more stressful when the at-fault driver carries only the minimum amount of insurance required by law. Unfortunately, many California drivers purchase only the minimum liability coverage, leaving accident victims wondering how they will pay for medical bills, lost income, vehicle repairs, and other damages that far exceed the available insurance limits.
Although recovering compensation may become more complicated in these situations, it is not necessarily the end of the road. Depending on the circumstances, there may be other insurance policies or sources of recovery available. At Kalfayan Merjanian, LLP, we help injured Californians identify every available avenue for compensation after serious automobile accidents.
What Is the Minimum Auto Insurance Required in California?
California requires drivers to carry minimum amounts of liability insurance to help cover injuries and property damage they cause to others. Previously, the minimum amounts required in California were a very low 15/30/5 scheme. In 2022, Governor Newsom signed Senate Bill 1107, raising the minimum amount to go into effect in 2025. As of January 1, 2025, the minimum liability limits for most private passenger vehicles increased to:
- $30,000 for bodily injury or death to one person
- $60,000 for bodily injury or death to two or more people in a single accident
- $15,000 for property damage
These are minimum requirements. Serious accidents produce damages that greatly exceed these policy limits, particularly when catastrophic injuries are involved. Recognizing this fact, many people opt for higher limits to protect themselves from liability, while others stick with the minimum.
Why Can Minimum Insurance Be a Problem?
Medical treatment after a serious collision is often expensive. Emergency transportation, hospital care, surgeries, rehabilitation, physical therapy, diagnostic imaging, prescription medications, and future medical care can quickly generate bills well beyond a $30,000 bodily injury policy. If multiple people are injured in the same accident, the available coverage may have to be divided among several claimants, leaving even less compensation available to each injured person. Property damage limits may also be insufficient to repair or replace newer vehicles.
Can You Recover More Than the Policy Limits?
Although an insurance company generally cannot be required to pay more than the policy limits available under its insured’s liability coverage, additional compensation may be available from other sources.
For example, recovery may be possible through:
- Your own uninsured/underinsured motorist (UM/UIM) coverage
- Other insurance policies that may apply
- A negligent employer if the at-fault driver was working at the time of the collision
- The owner of the vehicle, depending on the circumstances
- Other drivers who contributed to the accident
- Product liability claims involving defective vehicle components
- A personal lawsuit against the at-fault driver when appropriate
Also, if the insurance company acts in bad faith by refusing to settle a claim for a reasonable demand within policy limits, it can wind up liable if a jury finds the defendant liable for amounts greater than the policy limits. Identifying all potentially liable parties is an important part of investigating a serious accident.
What Is Underinsured Motorist Coverage?
Underinsured motorist (UIM) coverage is designed to protect you when the at-fault driver’s liability insurance is insufficient to fully compensate you for your injuries. For example, if you suffer $300,000 in damages but the at-fault driver carries only the minimum bodily injury limits, your own UIM coverage may help pay the difference, up to the limits of your policy, after the other driver’s liability coverage has been exhausted. Although California insurers are required to offer uninsured and underinsured motorist coverage, policyholders are allowed to reject it in writing. For that reason, not every driver has this valuable protection.
How Is Uninsured Motorist Coverage Different?
Uninsured motorist (UM) coverage generally applies when the at-fault driver has no liability insurance at all, or in hit-and-run crashes where the driver cannot be found. Underinsured motorist coverage, by contrast, applies when the at-fault driver has insurance, but not enough to fully compensate the injured person. Both types of coverage can provide important financial protection after a serious accident.
What If the At-Fault Driver Was Working at the Time of the Crash?
If the negligent driver was acting within the course and scope of employment at the time of the collision, additional insurance coverage may be available through the employer. Commercial policies often provide significantly higher coverage limits than the minimum required for private passenger vehicles. Determining whether a driver was working at the time of the crash requires a careful investigation of the facts and may substantially affect the amount of compensation available.
Can More Than One Person Be Responsible?
Some collisions involve multiple negligent drivers or other responsible parties. For example, a chain-reaction collision may involve several motorists. A trucking company may share liability for the actions of its driver. A vehicle manufacturer may bear responsibility if a defective component contributed to the crash. In some cases, a dangerous roadway condition or negligent road maintenance may also become relevant. Identifying every potentially responsible party is essential when one driver’s insurance coverage is insufficient.
Should You Accept the Insurance Company’s First Offer?
Insurance companies sometimes attempt to settle claims quickly, particularly when policy limits are relatively low. Before accepting any settlement, it is important to understand the full extent of your injuries, future medical needs, and available insurance coverage. Once a settlement is finalized, you generally cannot return later to seek additional compensation for the same injuries. An experienced personal injury attorney can evaluate available insurance policies, identify other potential sources of recovery, and help determine whether a proposed settlement is appropriate.
How Can an Attorney Help?
Cases involving inadequate insurance coverage often require a more comprehensive investigation than other automobile accident claims. An attorney can identify all available insurance policies, investigate whether additional defendants may share responsibility, preserve critical evidence, negotiate with multiple insurance companies, and work with medical and economic experts to accurately value your claim. When catastrophic injuries are involved, these additional sources of recovery can make a substantial difference in the compensation ultimately available to an injured person.
Contact Kalfayan Merjanian, LLP
Learning that the driver who caused your accident has only minimum insurance can be discouraging, but it does not necessarily mean your recovery is limited to those policy limits. Additional insurance coverage or other responsible parties may exist, depending on the facts of your case. Kalfayan Merjanian, LLP conducts thorough investigations to identify every available source of compensation and aggressively advocates for clients who have suffered serious injuries. Contact Kalfayan Merjanian, LLP today to discuss your case and learn about your legal options.
