GUIDE: UM and UIM Statute of Limitations and Time Requirements

Guide to Statute of Limitations and Time Requirements for Uninsured Motorist (UM) and Underinsured Motorist (UIM) Claims in Los Angeles and California

Serving Los Angeles, Calabasas, Beverly Hills, Woodland Hills, Van Nuys and all of California

Insurance claims involving Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage are governed by strict statutory deadlines and procedural rules. Missing any one of these requirements can permanently destroy an otherwise valid personal injury or wrongful death claim.

At Gary K Walch, A Law Corporation, often called Walch Law, our family-owned personal injury and wrongful death law firm has 50 years of experience successfully handling UM and UIM claims throughout Los Angeles and all of California. We have won thousands of cases and recovered millions of dollars for injured clients and families who lost loved ones due to negligence. Insurance companies know these rules well—and they routinely deny claims when deadlines are missed. We make sure that does not happen.

This page explains some of the key UM and UIM time limits, then provides a clear comparison table. Note: All information provided is general information only and does not constitute legal advice for any particular claim or case. Rules and codes change over time, and each case is different so you are advised to contact us now for advice relating to your own case.

Governing California Statute

All UM and UIM claims arise under:

California Insurance Code § 11580.2

This statute controls:

• When a UM or UIM claim arises
• Whether a lawsuit or demand for arbitration is required
• When arbitration must be demanded
• How and when the statute of limitations is tolled

I. UNINSURED MOTORIST (UM) CLAIMS – CALIFORNIA DEADLINES

What Is a UM Claim?

UM coverage applies when:

• The at-fault driver has no insurance, or
• The incident involves a hit-and-run driver (with required physical contact) who cannot be identified

UM Statute of Limitations

Insurance Code § 11580.2(i)(3) controls UM time deadlines.

For UM claims:

⏱ The insured must do ONE of the following within two (2) years of the accident:

• File a lawsuit against the uninsured motorist, or
• Formally demand arbitration with the UM insurer

Important: You do not need to sue the uninsured driver if arbitration is timely demanded. The method of demanding arbitration may be spelled out in the contract (i.e., the insurance policy) and or may be confirmed with the UM insurance adjuster and confirmed in writing.

Key California Supreme Court Authority (UM)

Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049
Holding: An insured is not required to file a civil lawsuit against the uninsured motorist. A timely and proper demand for UM arbitration satisfies the statute, and as previously stated the insurance policy should state exactly how to comply with this requirement.

When Arbitration Must Be Demanded (UM)

• Arbitration must be instituted (demanded in writing) according to the insurance policy
• It does not need to be completed within two years, just timely and properly demanded.

Authority: Insurance Code § 11580.2(i)(1)(C):

“No cause of action shall accrue… unless… the insured has formally instituted arbitration proceedings by notifying the insurer in writing… within two years from the date of the accident.”

Therefore, a written arbitration demand within the two-year period satisfies Insurance Code § 11580.2.

Consequences of Missing the UM Deadline

If neither a lawsuit is filed nor arbitration demand is timely made within two years:

The UM claim is barred forever

The insurer has no obligation to pay—even if liability is clear

II. UNDERINSURED MOTORIST (UIM) CLAIMS – CALIFORNIA DEADLINES

What Is a UIM Claim?

UIM coverage applies when:

• The at-fault driver has insurance
• But their policy limits are insufficient to fully compensate the victim(s) and it is exhausted so the claimants’ own UIM insurance coverage is utilized

UIM claims are more complex because the at-fault driver’s policy must be exhausted first, then the insured’s own insurance policy comes into play if its UIM coverage limits exceed the at-fault parties’ underlying insurance coverage; and the UIM claimant still must prove someone else was at fault and damages sustained.

UIM Exhaustion Requirement

Under Insurance Code § 11580.2(p):

• The injured party must settle with or obtain payment of the full policy limits of the at-fault driver. Verification of such limits is very important and another reason to consult with an experienced California UIM lawyer.
• The UM/UIM insurer must consent or be given statutory notice

UIM Statute of Limitations and Tolling

Unlike UM claims, the statute of limitations for UIM claims is tolled while the insured pursues the at-fault driver.

Insurance Code § 11580.2(i)(1) provides that the statute is tolled until:

• The at-fault driver’s insurer pays its policy limits, or
• Liability is otherwise resolved

When Arbitration Must Be Demanded (UIM)

⏱ After exhaustion of the at-fault parties’ coverage, UIM arbitration must be demanded if the UIM claim cannot be resolved within a reasonable period of time. Exactly when UIM arbitration must be demanded is uncertain but it certainly must be demanded within a reasonable period of time so it is advised that the insured claimant:

• Demand arbitration within two (2) years of payment or settlement with the at-fault drivers’ insurer(s) or a reasonable time after doing so, whichever is earlier.
• Courts have interpreted Insurance Code § 11580.2 to mean that the two-year requirement for arbitration demands in uninsured motorist (UM) cases does not automatically govern UIM claims. In other words, there is a difference between UM and UIM arbitration demand time rules.
• UIM arbitration must be commenced within a reasonable time after the underlying tort claim is fully resolved (i.e., after exhausting the liability policy limits of the at-fault parties), or the insured risks waiver of arbitration rights.

Bottom line: Claimants must demand arbitration for underinsured-motorist (UIM) benefits within ‘a reasonable time’ after exhaustion of the claims against the underinsured parties; we advise this time should not exceed two (2) years after exhausting the at-fault parties’ insurance coverage(s)..

Policy Timing for UIM Arbitration

Because a UIM claim doesn’t accrue until the insured exhausts the tortfeasor’s policy, the “reasonable time” standard typically runs from when the underlying settlement or judgment is finalized and proof of exhaustion is delivered to the UIM carrier.

There isn’t a certain time period, like “two years after the settlement,” but courts probably will consider these factors:

• Whether the insured provided timely notice of the UIM claim after exhaustion;
• Whether there was unreasonable delay in demanding arbitration; and
• Whether insurer’s conduct contributed to any delay.

Some Key Cases:

Quintano v. Mercury Casualty Co. (1995) 11 Cal.4th 1049
Juarez v. 21st Century Insurance Co. (2003) 105 Cal.App.4th 371
Holding: UIM claims are tolled during exhaustion of the underlying responsible parties’ insurance policy, but arbitration must be timely demanded once exhaustion occurs (some authority suggests the time limit in UIM cases is a reasonable time—we advise within 2 years after exhausting the at-fault parties’ coverage limits or a reasonable time after doing so, whichever is earlier)

Case Law on Reasonable Time/Delay

Mayflower Ins. Co. v. Pellegrino (1989) 212 Cal.App.3d 1326

• Although this case predates the current UIM statutory framework, the court explained general arbitration waiver principles:
  • When an arbitration agreement (including UM/UIM clauses) does not specify a deadline for demanding arbitration, courts allow a demand within a reasonable time.
  • If an insured delays unreasonably in demanding arbitration, they can be found to have waived the right to arbitrate. Updated research on this issue should be conducted, otherwise demand UIM arbitration within reasonable time not to exceed two (2) years after exhausting the underlying limits.

Lawsuit Requirement (UIM)

• A lawsuit against the at-fault driver is sometimes necessary to exhaust limits, but not always. A timely and proper demand for arbitration is sufficient.
• However, the UIM claim itself proceeds by arbitration, not jury trial

California Supreme Court:
Hamilton v. Maryland Casualty Co. (2002) 27 Cal.4th 718
Holding: Settlements with the at-fault driver, when properly approved, bind the UIM insurer subject to arbitration.

Time to “Complete” UIM Arbitration and Other Time Rules

Prahl v. Allstate Northbrook Indemnity Co. (2025) 110 Cal.App.5th 118

• Court held: A UIM claimant’s petition to compel arbitration was denied because the five-year period to conclude arbitration had expired under Insurance Code § 11580.2(i)(2)(A).
• Summary: Even if arbitration is demanded properly, if arbitration is not concluded within five years of its institution, the statutory deadline may bar enforcement of arbitration rights.

Below is the actual controlling statutory text that applies to arbitration demands once the underlying claim is resolved:

Insurance Code § 11580.2(i)(1) (Accrual/Demand Timing) — Full Wording

“No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within two years from the date of the accident:

(A) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction.
(B) Agreement as to the amount due under the policy has been concluded.
(C) The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested…”

Note:

• Once arbitration is instituted, it must be concluded within five years from the institution of the arbitration proceedings.
• If a workers’ compensation claim is involved, there is a three-year fixed deadline from conclusion of that claim, if later, instead of the five-year general deadline.
• Parties may agree in writing to extend time to conclude arbitration.

Insurance Code § 11580.2(i)(2) (Completion Deadline) — Full Wording

“Any arbitration instituted pursuant to this section shall be concluded either: (A) Within five years from the institution of the arbitration proceeding…” (emphasis supplied)

📌 Practical Summary — What That Means In UIM Cases

1. You do not have to demand arbitration before the underlying tort claim is exhausted.
   Your UIM arbitration demand is premature until there is proof of underlying settlement or judgment establishing exhaustion.
2. Once underlying coverage is exhausted, the UIM arbitration must be demanded within a reasonable time — not a fixed two-year UM deadline under § 11580.2(i)(1)(C).
3. Once arbitration is instituted (written demand served), it must be completed within five years of institution unless otherwise agreed and confirmed by a written extension or equitable doctrines apply.

📌 Case Law Interpreting Timing (Not Direct Statutory Text)

• Quintana v. Mercury Cas. Co. (1995) 11 Cal.4th 1049 – UIM claim accrues only after exhaustion of tortfeasor’s coverage; arbitration cannot proceed before then.
• Commentary – Two-year demand rule in § 11580.2(i) applies to UM claims but not UIM; UIM arbitration must be demanded within a reasonable time after exhaustion or risk waiver.

UM vs. UIM – COMPARISON TABLE Why Insurance Companies Deny UM/UIM Claims

Insurers routinely argue:

• Arbitration was demanded too late
• Exhaustion of at-fault’s underlying limits was improper
• Required notice was not provided
• Settlement voided UIM rights

These defenses are technical—and often unfair—but they may succeed against unrepresented claimants. These rules and procedures can be very technical so claimants are advised to contact experienced lawyers. Our consultation is FREE and on injury accident UM and UIM cases we work on a contingency fee which means there is NO FEE until we WIN!

Accident Statistics and Why UM/UIM Coverage Matters

According to data from the California Highway Patrol (CHP) and NHTSA:

• California consistently ranks among the states with the highest number of uninsured drivers, hence when there is an injury collision its necessary to have your own UM insurance coverage including waiver of UM deductible as otherwise you may be left to seeking compensation for property damage, rental cars, injuries, hospital and medical charges, and loss of earnings and income from the uninsured motorist
• Hit-and-run crashes cause thousands of serious injuries and deaths annually
• Los Angeles County leads the state in injury-producing collisions

UM and UIM insurance coverage is often the only source of full compensation. And we offer a free consultation, including to review your own insurance coverage for adequacy.

Time Limits Are Absolute – Do Not Delay

Failing to comply with:

• Statutes of limitation
• Arbitration demand and completion deadlines
• Exhaustion of underlying insurance coverage requirements

Missing a deadline can permanently eliminate your claim—no matter how serious the injuries or loss.

Why Clients Trust Walch Law

✔ 50 years winning personal injury and wrongful death cases
✔ Thousands of personal injury cases handled, including UM and UIM claims
✔ Millions recovered for injured victims and families
✔ Family-owned, client-focused representation
✔ We handle underlying claims to exhaust the limits, UM and UIM arbitrations, insurer disputes, and deadlines
✔ Personal attention—not volume billboard lawyering

📞 Free Consultation – Protect Your UM or UIM Claim Now

📱 Contact Walch Law today – Call 818.222.3400 or 866 INJRY 2 (After hours dial “1”)
🌐 Visit our other UM and UIM website pages at WalchLaw.com
📍 Offices in Calabasas and Beverly Hills – Serving all of California

Frequently Asked Questions (FAQ)

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