Law Office of Rocky K. Copley, A Professional Corporation

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Recovery of Property Damages Caused by Uninsured Motorist

Why is your client forced to pay a deductible for vehicle property damages caused by an uninsured motorist?

Jimmy “The Bud” Weedman, the owner of the largest chain of medical marijuana dispensaries in Southern California, has a daughter named Columbia Weedman. Columbia had a number of traffic violations and had recently wrecked her own car when she lost control while speeding on the windy roads in the area of Julian, California. Columbia asked to borrow her father’s Hummer so that she could meet some friends and go to the opening day of the San Diego Padres. Bud Weedman agreed and lent his Hummer vehicle to Columbia.

Columbia began driving at a high speed down Interstate 5 and sideswiped a vehicle being operated by Eggshell Eddie’s girlfriend, fun-loving Ima Forit. Ima lost control of her vehicle and collided with the median. Columbia knew that she was in trouble and fled the scene. The accident was witnessed by several other drivers, but no one was able to obtain the license number of Columbia’s vehicle nor could anyone identify Columbia as the driver of the Hummer.

Ima retained Attorney Billy Greenhorn, who was Eggshell Eddie’s brother-in-law. Attorney Greenhorn had recently passed the Bar exam after completing a correspondence course from a law school that he learned about on the back of a matchbook cover.

Ima was insured by Allsnake Insurance. Attorney Greenhorn submitted a claim for uninsured motorist benefits for the injuries suffered by Ima. With regard to the property damages to Ima’s vehicle, Ima’s policy contained collision insurance. Allsnake informed her that it would cover the $6,500 in property damages to her vehicle, but it would be reduced by $500 because of her deductible. Attorney Greenhorn sent a letter to the adjustor, Sean McScrewem, and requested him to pay the deductible under the uninsured motorist coverage portion of the policy. Adjuster McScrewem rejected coverage of the deductible under the uninsured motorist portion of the policy. He informed Attorney Greenhorn that Ima needed to provide the name of the uninsured motorist or the license number of the vehicle in order to obtain coverage for the deductible under the UM coverage of the policy.

Attorney Greenhorn comes to you because he knows that you are an expert in insurance coverage and the uninsured motorist laws of California. What do you tell him?

Analysis of UM Coverage for Property Damages

Insurance Code section 11580.2 provides that all policies issued or delivered to a policyholder in the State of California covering a motor vehicle principally used or garaged in this state must have uninsured motorist coverage. (Ins. Code §11580.2(a)(1).) Insurers may agree with their insured to delete the uninsured motorist coverage, but there are special requirements that necessitate the waiver of the coverage to be in writing. (Id.)

An uninsured motor vehicle is defined in Insurance Code section 11580.2(b)(1) as a motor vehicle for which there is no bodily injury insurance applicable at the time of the accident, or there is insurance, but the company denies coverage and refuses to admit coverage, except conditionally or with a reservation. In addition, an uninsured motor vehicle can also be a situation where “the owner or operator thereof be unknown, provided that, with respect to an ‘uninsured motor vehicle’ whose owner or operator is unknown: (1) the bodily injury has arisen out of physical contact of the automobile with the insured or with an automobile that the insured is occupying; (2) the insured or someone on his or her behalf has reported the accident within 24 hours to the police department. . . .” (Ins. Code §11580.2(b)(1); Emphasis added.)

In summary, Insurance Code section 11580.2(b)(1) permits a policy holder to pursue a claim for uninsured motorist coverage in situations where the owner or operator is unknown and there has been physical contact between vehicle driven by the unknown owner or operator and the vehicle driven by the insured.

However, you explain to Attorney Greenhorn that Insurance Code section 11580.2(c)(1) expressly excludes coverage to property damage sustained by the insured. Attorney Greenhorn points out to you that he believes that coverage for the deductible should be paid pursuant to Insurance Code section 11580.26. Insurance Code section 11580.26 provides that the UM coverage shall cover property damages caused by uninsured motorists, except in those situations where the insured has agreed to waive the uninsured motorist coverage pursuant to Insurance Code section 11580.2. Ima did not waive the UM coverage.

Insurance Code section 11580.26 provides that in situations where the motor vehicle liability insurance includes collision coverage and that coverage contains a deductible, then the UM coverage shall be available to pay the deductible. (Insurance Code section 11580.26(a)(1).) In the situation where the motor vehicle liability insurance does not include collision coverage, there is still coverage for property damages to the insured vehicle caused by the uninsured motorist, but the property damages shall not exceed the loss or damage to the insured motor vehicle, not to exceed the actual cash value or $3,500, whichever is less. Attorney Greenhorn argues that Ima Forit had the collision coverage and, therefore, Allsnake should pay for the deductible under the UM coverage pursuant to the express provisions of Insurance Code section 11580.26(a)(1).

Nevertheless, you point out to Attorney Greenhorn that the definition of an uninsured motor vehicle is different in Insurance Code section 11580.26 as compared to the definition of an uninsured motor vehicle under Insurance Code section 11580.2. An uninsured motor vehicle under Insurance Code section 11580.2 requires only that there be physical contact between the uninsured motorist vehicle and the insured vehicle and that the insured report it to law enforcement within 24 hours of the incident. In contrast, to qualify for property damages covered under the UM coverage under Insurance Code section 11580.26, more than physical contact is required to obtain coverage for the property damages. Insurance Code section 11580.26 provides:

(b) Every payment by an insurer under either coverage provided in paragraphs (1) and (2) of subdivision (a) shall be payable under the terms and conditions set forth in the policy, and shall be made only where the collision involves actual, direct physical contact between the insured and the uninsured motor vehicle and the owner or operator of the uninsured motor vehicle is identified or the uninsured motor vehicle is identified by its license number, … (Ins. Code § 11580.26(b).)

Therefore, you explain to Attorney Greenhorn that the definition of an uninsured motor vehicle to obtain property damage coverage under Insurance Code section 11580.26 requires direct physical contact and that Ima Forit be able to identify the owner or operator of the uninsured motor vehicle or provide the license number of that vehicle. Unfortunately, neither Ima nor any of the witnesses to the incident knew the identity of the driver (Columbia Weedman) nor did they obtain the license number of her vehicle. Consequently, while physical contact clearly occurred and Ima Forit qualifies for the bodily injury coverage of the uninsured motorist coverage pursuant to the provisions of Insurance Code section 11580.2, she did not qualify for the property damage coverage under the UM coverage portion of the policy because she could neither identify the owner or operator of the uninsured motor vehicle nor provide the license number of that vehicle. Consequently, Insurance Code section 11580.26 adds a qualifying requirement that the insured be able to either identify the owner or operator of the uninsured motor vehicle or the license number for that vehicle in order to obtain property damage coverage when there is a hit and run situation.

You inform Attorney Greenhorn that he would lose any breach of contract or bad faith claim again Allsnake Insurance and that Adjustor McScrewem is correct in this instance. You recommend that he focus his energies on the bodily claim of Ima Forit and drop the claim for the deductible under the UM coverage.

Conclusion

While this situation does not occur very often, sometimes your client may ask about why they are forced to pay a deductible for the property damages to their vehicle when the accident was caused by an uninsured motorist. The UM coverage is available to cover the deductible or property damages up to $3,500 when the damages are caused by an uninsured motorist. However, the insured is required to be able to provide additional information that is not required to pursue a claim for bodily injury damages caused by an uninsured motorist whose vehicle caused direct physical contact with the insured’s vehicle and then flees the scene and the identity of the owner or operator and license number is unknown.


This article was also published in the Trial Bar News. The APA citation for the Trial Bar News article is as follows:

Copley, R. K. (2017). Recovery of property damages caused by uninsured motorist. Trial Bar News, 40(3), 11, 24-25.

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