Lack of Auto Insurance Coverage Can Limit California Drivers’ Recovery of Damages but Not Innocent Heirs’ Recovery Wrongful Death Damages

By Michael Penn

What happens in personal injury cases when one of the parties involved in an accident lacks automobile insurance coverage?  The classic lawyerly answer, “it depends” is incorrect.  Voters in California specifically addressed this issue in 1996 when they passed Proposition 213.

Under Proposition 213, codified primarily in California Civil Code Sections 3333.3 and 3333.4, a plaintiff driver’s lack of insurance coverage can severely limit his or her recovery of damages regardless of fault for the accident. California voters passed Proposition 213 by over 75% of the vote.  The initiative was marketed as holding law breakers accountable for their actions while also punishing them for flouting financial responsibility laws.  Not surprisingly, the initiative was virtuously named The Personal Responsibility Act of 1996.

Insurance companies marketed the law as a sword for responsible insured drivers against drunk drivers, felons, and uninsured motorists. Since the law’s passage, it has been a boon for insurance industry profits with harsh consequences for uninsured drivers injured in automobile crashes through no fault of their own.

Put simply, Proposition 213 bars drivers injured in car accidents from obtaining damages for their pain, suffering, and emotional distress (a.k.a. non-economic or general damages), regardless of fault if they themselves lack car insurance or the vehicle being driven was not covered by insurance.

An uninsured driver, not at fault for an accident, may still recover for their medical expenses, loss of earnings, and property damage (economic damages) under Proposition 213. Additionally, if an uninsured driver bears a portion of fault for the accident, his or her economic damage recovery may be reduced based on their comparative negligence in the accident.

If the vehicle being driven at the time of the accident is covered by insurance then Proposition 213 does not apply and the driver may recover the full extent of their damages, both economic and non-economic.  Passengers are also not impacted by Proposition 213 and are entitled to a full recovery and may recover both economic and non-economic damages.  Again, depending on the facts of the accident, a driver’s comparative negligence may still serve to reduce damage awards.

Although Proposition 213 applies in accidents where a vehicle or driver lack insurance coverage, there are some exceptions.  Proposition 213 does not apply if the driver of the vehicle was operating his or her employer’s vehicle that lacked coverage.  Vargas v. Athena Assurance Co. (2001) 95 Cal.App.4th 461.  Additionally, Proposition 213 does not apply if the accident occurred on private property.  Proposition 213 also does not apply if the owner of the vehicle lacked insurance coverage, but the driver who was entrusted with the vehicle possessed insurance coverage on his or her own vehicle.

Proposition 213 does not apply to passengers so long as the passenger is not the owner of the insured car.  In such a situation, the passenger can still avoid Proposition 213 if the driver of the vehicle is insured.  See Goodson v. Perfect Fit Enterprises (1998) 67 Cal.App.4th 508.

Does Proposition 213 limit the recovery of innocent heirs in wrongful death lawsuits where the uninsured driver was killed? 

The short answer is no.  So long as the heir was not the uninsured owner or operator of the vehicle involved in the accident, they can still recover their full extent of damages under California’s wrongful death statute (California Code of Civil Procedure Section 377.60).

Under California law, a wrongful death plaintiff who is neither the uninsured owner nor operator of a vehicle involved in the accident cannot be one who has failed to take personal responsibility because the law imposes no obligation on that person.

Nor are wrongful death plaintiffs mentioned in the text of the proposition as subject to its restrictions.  For these reasons, the Supreme Court of California concluded that a wrongful death plaintiff’s recovery is permissible. See Horwich v. Superior Court (Acuna), (1999) 21 Cal. 4th 272.

It is important to contact an attorney at the earliest opportunity to allow for a full and thorough investigation into the facts surrounding any accident.  It can take considerable time to uncover the full picture when it comes to insurance coverage issues.  While legal limitations on the amounts of damage recoveries may exist, competent counsel can still work to make sure victims receive full compensation for the harms they have suffered.

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