California Underinsured Motorists Claims: What’s Changed in 2025?

California Underinsured Motorists Claims: What’s Changed in 2025?

The auto insurance laws of California have been subject to major updates in 2025, causing fundamental transformations to the process of underinsured motorist (UIM) claims. These changes have impacts on policyholders and victims of accidents, so it is necessary to know the new rules before occurrence of an accident.

Higher Minimum Liability Coverage Under SB 1107

California has increased maximum limits of auto liability insurance, the first in almost 60 years. Since Senate Bill 1107, which was enacted on January 1, 2025, the minimum coverage has increased from $15,000/$30,000/$5,000 to $30,000 per person, $60,000 per accident for bodily injury, and $15,000 for property damage.

This is an upgrade to current medical costs and vehicle repair costs that have exceeded the old 1967 standard. To comply with these minimums, insurers are required to amend all new and renewed policies to provide Californians with improved minimum protection in the event of accidents.

Adjustments to UIM and UM Coverage

In California, insurers must provide Uninsured and Underinsured Motorist (UM/UIM) coverage by legal obligation, but policyholders may refuse them in writing. The UM/UIM coverage is now required to equal or surpass new limits based on the liability. This will automatically raise the limits of policyholders with UM/UIM coverage to the increased levels of $30,000/$60,000 when their policies renew.

UM/UIM coverage comes in play when the at-fault driver lacks sufficient insurance to pay the medical expenses, lost income, or property damage of injured party. Although new minimums are an improvement, they still might not work in extreme accidents, and this is why legal experts suggest that people should have higher UM/UIM cover limits whenever possible.

How These Changes Affect UIM Claims

The higher liability caps redefine the UIM claims setting in a number of ways:

• Larger recovery potential – Increased baseline liability and UIM limits increase the probability of the claimant receiving compensation that actually represent their losses.
• Clearer settlement negotiations – Low UIM limits no longer be used by insurers as an excuse to limit payouts as they were with old minimums. This makes bargaining more powerful to a claimant.
• Premium adjustments – As reported by State Farm Newsroom, initiative to increase the state minimums can result in some slight increase in premiums of certain drivers. This growth is, nevertheless, anticipated to be relatively small in relation to enhanced levels of coverage.
• Stronger legal protections –California law continues to ensure that your insurers cannot increase your rates on mere occasion that you have made a UM or UIM claim. This coverage will stay in place in 2025 and compels drivers to utilize their coverage without the fear of penalty.

Practical Steps for Drivers

California drivers can protect themselves with the following actions in place:

• Review your policy: Ensure that your UM/UIM coverage is at least at new minimum levels and consider going higher to offer extra coverage.
• Document everything after an accident: Maintain detailed accounts of medical procedures, repair costs, and wage loss in order to prove your case.
• Don’t settle too quickly: Before accepting any insurance settlement, be sure you have full extent of injuries and costs in place.
• Consider legal guidance: Having an attorney in personal injury may also assist you to negotiate new claim system and get compensated justly.

Final Thoughts

The insurance reforms in California under 2025 are targeted to bridge several covers gaps that have existed over the years and update the accident covers. The state is providing drivers with a better financial cushion by raising minimums of liability and harmonizing UM/UIM coverage. Nevertheless, underinsured motorists will still be a problem, particularly with serious accidents. The best way to remain covered under the new rules is to review your coverage, understand your rights and make informed decisions.