Stacking of UIM Coverages: Not a New Board Game

Most people don’t think of uninsured ("UM")/underinsured ("UIM") coverages when they hear the word “stacking;” but California’s Insurance Code prohibits “stacking” of UM/UIM coverages.  UM/UIM coverages become important when a person is injured by someone operating a motor vehicle who is uninsured or underinsured.  Suppose our client is hit by an uninsured driver (often the case with drunk driver defendants); in that circumstance, we’d look to our own client’s auto liability policy, which (hopefully) has uninsured motorist coverage.  That coverage would provide compensation for our client’s damages, up to the limit of that coverage (i.e., what coverage their premium payment to their insurance carrier provided).  But let’s suppose the responsible defendant driver has an inadequate amount of insurance coverage for the damages sustained by our client (i.e., the defendant is “underinsured”).  We’d then look to our client’s underinsured motorist coverage.  Under California’s Insurance Code, our client would only be able to assert a UIM claim if their own coverage was greater in amount that that of the defendant driver’s coverage.  For example, let’s assume the defendant in our scenario had only the minimum mandatory coverage required to comply with California’s auto liability laws ($15,000/per person coverage, $30,000/per occurrence).  Our client would then only have UIM coverage to repair to if their UIM coverage exceeded the coverage of the defendant’s policy (> than $15,000).  This is because of California’s “anti-stacking” provision in its Insurance Code (California Insurance Code section 11580, et seq.).  So, our client would need to have coverage in excess of the defendant’s $15,000 amount in order to pursue compensation under their own UIM coverage.
 
Other states, like Oregon, allow for “stacking” of the UIM coverage.  A current Janssen Malloy LLP case illustrates the point.  Our clients were injured by an inadequately-insured motorist in Oregon, and our clients had an Oregon UIM policy.  Under Oregon Revised Statutes section 742.502(5)-(6), our clients are able to “stack” their own UIM coverage limit on top of the coverage limit of the defendant, thereby increasing the amount of compensation they can assert for their injuries.  In California, they would be subject to the anti-stacking provisions of the California Insurance Code, and also only able to be compensated up to the limit of their own UIM policy limit, less the amount recovered from the defendant’s insurance carrier.  California’s “anti-stacking” provisions in its Insurance Code are plainly unfair to California consumers, who reasonably would assume that their UIM coverage (for which they pay a premium to their own insurance carrier) would apply as the policy limit number suggests, rather than possibly have no UIM coverage at all if their own coverage did not exceed that of the defendant.  The insurance industry has successfully lobbied for years to retain the current rules, which provide them profitable insurance premiums for providing no UIM coverage in many instances.
 
The above discussion shows that injured motorists need to be represented and advised by experience trial counsel who can steer them through the obstacles involved with UM/UIM claims.  The attorneys at Janssen Malloy LLP have the background and knowledge to properly protect clients who find themselves in such circumstances.

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