Woodland Hills personal injury attorney is an expert on all things “Uninsured and Underinsured” Motorist Law in California. Although Mr. Goldberg never recommends waiving or reducing Uninsured Motorist Coverage, such coverage must be waived in a specific way or the coverage is deemed to exist even if it was not purchased. An interesting question arises Whether Insurance Code section 11580.2 requires a written waiver to reduce uninsured motorist coverage where the coverage offered is less than the policy’s bodily injury liability limits but exceeds $30,000 per person and $60,000 per accident.
In our busy auto mobile and insurance practice, we see many interesting insurance policy coverage limit combinations. The “combinations” become critical when it is a serious injury, particularly in motorcycle accident cases. In a short period of time, our office has seen severely injured motorcyclists who have waived Uninsured Motorist coverage altogether, or have very high liability limits with very low Uninsured limits. A real question arises about the advice these motorcyclists (and all drivers for that matter) receive regarding the availability of Uninsured Motorist coverage and the corresponding available limits.
From time to time, I have received inquiries mostly from other lawyers who are familiar with the general requirement that Uninsured Motorist coverage requires a written waiver to “reduce” coverage which is offered for less than the policy’s bodily injury liability limits. Usually, those lawyers represent seriously injured accident victims that have high liability limits and low Uninsured motorist limits. They argue that the equivalent “high” liability limits must be offered to insureds and specifically “waived.” On its face, this argument makes sense—until you actually read the statute.
Insurance Code §11580.2(a)(1) Requires a Written Waiver of Uninsured Motorist Coverage
“No policy of bodily injury liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle, . . . shall be issued or delivered in this state. . . unless the policy contains, or has added to it by endorsement, a provision with coverage limits at least equal to the limits specified in subdivision (m) and in no case less than the financial responsibility requirements specified in Section 16056 of the Vehicle Code insuring the insured, the insured’s heirs or legal representative for all sums within the limits that he, she, or they, as the case may be, shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle. The insurer and any named insured, prior to or subsequent to the issuance or renewal of a policy, may, by agreement in writing, in the form specified in paragraph (2) or paragraph (3), (1) delete the provision covering damage caused by an uninsured motor vehicle completely, or (2) delete the coverage when a motor vehicle is operated by a natural person or persons designated by name, or (3) agree to provide the coverage in an amount less than that required by subdivision (m) but not less than the financial responsibility requirements specified in Section 16056 of the Vehicle Code.” (Emphasis added.)
Uninsured Motorist Coverage Must be Offered with “Equal Limits.”
Insurance Code §11580.2(m) provides that “[c]overage provided under an uninsured motorist endorsement or coverage shall be offered with coverage limits equal to the limits of liability for bodily injury in the underlying policy of insurance, but shall not be required to be offered with limits in excess of the following amounts:
(1) A limit of thirty thousand dollars ($30,000) because of bodily injury to or death of one person in any one accident.
(2) Subject to the limit for one person set forth in paragraph (1), a limit of sixty thousand dollars ($60,000) because of bodily injury to or death of two or more persons in any one accident.” (Emphasis added.)
Read the Statute, Read the Statute, Read the Statute!
The California Courts previously interpreted the meaning of section 11580.2, subdivisions (a) and (m), in Enterprise Insurance Co. v. Mulleague (1987) 196 Cal.App.3d 528 (Enterprise). The appellant in Enterprise claimed section 11580.2, subdivision (m) should be read as requiring the limits for uninsured motorist coverage to be “‘equal to the limits of liability for bodily injury in the underlying policy of insurance.’” (Enterprise, supra, 196 Cal.App.3d at p. 535.) However, there, the Court explained that such a “reading violated Justice Frankfurter’s three rules for mastering the meaning of a statute: ‘(1) Read the statute; (2) read the statute; (3) read the statute!’” (Id.) For, “a statute must be read as a whole and so construed that each part is given effect.” (Id.)
As the Court reasoned, there would be no reason to include the specific limit amounts in subdivision (m) of section 11580.2 if the Legislature had intended that the policy limits always be the uninsured motorist coverage limits as well. “Construed as a whole, this statute means that uninsured motorist coverage must equal the limits of liability if those limits exceed the $15,000/$30,000 minimum required under the financial responsibility statute but only up to a maximum of $30,000 per person or $60,000 per accident.” (Enterprise, at p. 536.)
No Written Waiver is Required to Provide Uninsured Motorist Coverage Above the Minimum
Based on the clear reading of the statutes, the Court held, “the only plausible interpretation of the statute that gives effect to all of its terms is that where an insurer fails to obtain a written waiver of uninsured motorist coverage, the automobile insurance policy will then be construed by operation of law to provide uninsured motorist benefits in an amount equal to the bodily injury liability limits of the policy up to but not exceeding $30,000 per person and $60,000 per accident. In cases such as this where the statutorily imposed obligations are clear, we may not engage in forced construction or adopt an interpretation which imposes a requirement not contained in the statute.” (Enterprise, supra, 196 Cal.App.3d at p. 536.)
Although it is a facially appealing argument that insurers should offer Uninsured Motorist coverage equal to the liability coverage, and should require a written waiver from the insured to have lessor coverage, that is simply not the law. This office would support a legislative change to the existing law particularly given the alarmingly high uninsured numbers and grossly “underinsured” numbers in California. This is particularly critical given that California has the lowest minimum liability requirements in the United States and the minimum liability limits have not changed since 1974!