Is UM required on a business auto policy in California?
The carrier is generally required to offer it. Rejecting or reducing it typically takes a signed form, so the choice should be deliberate.
Coverage · UM/UIM
Uninsured motorist coverage for business vehicles in California
Coverage built for the people in your trucks and vans when the driver who hits them has no insurance, too little or drives away. How UM and UIM generally work on a California business auto policy and how to set the limit.
Quick answer
Uninsured and underinsured motorist (UM/UIM) coverage usually pays for injuries to the people in your company vehicles when the at-fault driver has no insurance, too little insurance or drives off. In California, the rules generally call for the carrier to offer it on a business auto policy, and turning it down or lowering it takes a signed form. It's mainly injury coverage; damage to the truck itself is usually a collision question.
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01How UM and UIM work on a business policy
Uninsured motorist coverage typically pays for injuries to the people in your company vehicles when another driver causes the crash and has no liability insurance or when a hit-and-run driver can't be found. Underinsured motorist coverage generally applies when the at-fault driver has insurance, but not enough to cover the injuries. It's one of the core coverages on our business vehicle insurance page.
In California, underinsured coverage generally works on the difference. It can pay up to your UM/UIM limit, reduced by what the at-fault driver's insurer has already paid. A crew member with serious injuries who collects the other driver's small policy can then turn to your UIM coverage for the rest, up to your limit. An at-fault driver carrying only the minimum limits in Vehicle Code section 16056 can leave a badly hurt crew member well short, and that shortfall is what UIM is for.
Coverage generally extends to people occupying a covered vehicle: your employees, the owner and passengers. That makes it the coverage that typically looks after your own people on the road, while liability looks after everyone else (see commercial auto liability limits).
Official sources
02What UM generally pays for and what it doesn't
| Usually pays for | Generally doesn't pay for |
|---|---|
| Pain and suffering, medical bills and lost wages for people in your vehicle hurt by an uninsured driver | Injuries your own driver causes to others, which is liability |
| The same injuries when the at-fault driver's limit is too low to cover them | Repairs to your truck, which normally fall under collision |
| Injuries from a hit-and-run driver who can't be identified, subject to the policy's conditions | Employees driving their own cars, who rely on their personal UM coverage |
| Owners and passengers in the vehicle, not just employees | Amounts workers' comp has paid, which California law can deduct |
Official sources
03UM limits and the signed form
Under California rules, the carrier is usually required to offer uninsured motorist coverage on a policy with auto liability. You can accept it, choose a lower limit or reject it, but lowering or rejecting it takes a signed form, and that choice generally carries over at renewal until you change it. The rule sits in Insurance Code section 11580.2. In general terms, the same section lets a policy reduce UM by what workers' comp pays and limits UIM to your limit minus what the at-fault side paid.
Many businesses match UM/UIM to their liability limit, and our liability quotes open at a $1 million combined single limit. Lower options of $300,000, $500,000 and $750,000 are usually available, and the right figure depends on how many people ride in your vehicles and whether your crews are covered by workers' comp. Customer contracts don't usually set a UM requirement, so this is a decision about protecting your people rather than satisfying a certificate.
Review the form at every renewal and whenever your fleet changes. A business that rejected UM with two pickups may want it with fifteen vans; see fleet insurance for 11 to 25 trucks for what else changes as a fleet grows.
Official sources
04Who's on the road: UM by trade
HVAC and plumbing
Service techs spend their day in traffic between calls, often alone in a van. A tech hit by an uninsured driver on the way to an emergency call is the textbook UM claim; see HVAC commercial auto insurance and plumbing contractor commercial auto insurance.
Landscaping and pool crews
A crew-cab pickup with four workers aboard can multiply the injuries from one crash. UM limits that look adequate for one driver can be thin when several people are hurt at once; see insurance for landscaping trailers and trucks and insurance for pool builders' trucks.
Paving and directional boring
Crews working along roadsides spend a lot of time getting in and out of trucks next to moving traffic. Whether someone counts as occupying the truck at that moment depends on the policy wording, so ask; see asphalt paving truck insurance and insurance for drill and vac trailers.
Distributors
Route drivers in box trucks log long days on freeways and surface streets, and a driver hurt by an underinsured motorist may need UIM to cover what the other policy can't. See supplier delivery truck insurance and our insurance for business box trucks page.
05Owners, partners and employees in their own cars
Owners and partners who aren't covered by workers' comp often depend on UM more than their crews do. If you drive a company truck yourself and you're not covered by workers' comp, UM may be one of the few coverages that pays for your own injuries when an uninsured driver hits you.
Employees driving their own cars for work are a different case. Your business auto UM generally follows covered vehicles, so an employee in a personal car relies on their own policy's UM. Hired and non-owned coverage can protect the business in that situation, but it typically doesn't add UM for the employee; see coverage for employees' own cars on company business.
06UM and damage to the truck
UM in California is mostly about injuries. When an uninsured driver damages your truck, the repair usually comes from your collision coverage, and some policies waive the collision deductible when the uninsured driver is identified and at fault. A hit-and-run that damages a parked truck is likewise a collision or comprehensive question, depending on what happened; see physical damage coverage for trucks.
If you carry no collision on an older truck, damage from an uninsured driver may go unpaid unless you can recover from the driver directly. That's worth weighing when you decide which units carry physical damage.
Uninsured motorist, in brief
Rejecting UM years ago and forgetting
A rejection signed when the business had one pickup can still be in force with a dozen vans on the road. Review it when the fleet grows.
Count the seats
Size UM to how many people ride in your vehicles. A crew truck with four aboard usually needs more room under the limit than a one-person van.
UIM can fill the gap above a thin policy
When the at-fault driver carries a small policy, your UIM coverage can pay the difference up to your limit.
Coverage
Every business auto coverageOther coverages on a business auto policy
Commercial auto liability
Commercial auto liability limitsPhysical damage
Commercial truck physical damage insuranceHired & non-owned auto
Hired and non-owned auto insuranceMotor truck cargo
Motor truck cargo insurancePrefer a call?
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What happens next
- We review your fleet and call to confirm details.
- We shop top-rated national carriers with one submission.
- You get options side by side; we bind and the carrier handles filings, if needed.
Timing depends on the carriers and your loss history.
Have ready: vehicle list with VINs, driver list, current declarations page, loss runs.
Uninsured motorist questions
What does uninsured motorist cover on a company vehicle?
Generally, injuries to the driver and passengers in your covered vehicle when the at-fault driver has no insurance or can't be found.
What's the difference between UM and UIM?
UM typically applies when the at-fault driver has no insurance. UIM applies when they have some, but not enough; in California it generally pays the difference up to your limit.
Can I reject uninsured motorist coverage on my business auto policy?
Generally, yes, by signing a rejection form. Weigh it carefully, since UM is often the coverage that protects your own drivers and passengers.
Does UM pay if my employee is already getting workers' comp?
Workers' comp generally responds first for an employee hurt on the job, and California law can reduce UM by what workers' comp pays. UM can still matter for owners and passengers who aren't employees.
Does UM pay to fix my truck?
Usually not. Truck damage from an uninsured driver is normally a collision claim, and some policies waive the collision deductible when the uninsured driver is identified.