Insurance and Consumer Protection

There are a multitude of insurance products and services in California. Some, like auto insurance, are mandated by law; others, like homeowner’s insurance, may not be mandated but may be required in other to secure a mortgage or simply a best practice to protect the insured.

Our Impact
In 2020, Consumer Attorneys of California worked with insurers, consumer groups and others to increase the minimum limits a driver must carry to ensure fair recovery for those injured in auto accidents (SB 1107-Dodd, effective 2025). The Legislature plays an important role in ensuring insurance products are accessible to consumers and priced fairly, as wildfires have become increasingly more dangerous. 

In addition to financial responsibility insurance, California drivers also purchase underinsured motorist coverage (UIM); however, drivers may not be receiving the protection they believe they have purchased. UIM coverage is purchased to protect the insured if they are injured by an underinsured driver. If an at-fault driver does not carry enough liability insurance to fully cover the harm they cause, UIM coverage is supposed to help cover the damages. Unfortunately, the UIM policy provides coverage only if the UIM coverage exceeds the liability coverage of the at-fault driver. So, if a driver buys minimum coverage and the at-fault driver also has minimum coverage, the maximum recovery is only $15,000 total and zero from their UIM policy. If a driver who has purchased $50,000 in UIM is hit and injured by someone who purchased a lower policy, the UIM recovery is reduced by that amount, even though the insured purchased $50,000. Consumers should make sure they purchase sufficient UIM insurance to fully protect themselves and should always make sure their UIM limits are equal to and never less than their policy limits.

As technologies rapidly change the insurance and consumer world, it is critical that the law keep pace to maintain a focus on consumer safety.