Auto insurance is mandated by California, but it provides only basic financial
protection if you (or another driver using your car) causes an accident
that hurts someone or damages someone else’s property. Clients often
are told by insurance agents or brokers that they have purchased "full
coverage," only to find out after an accident that it is not what
they expected. Minimum coverage is all that is required by California,
but that it is not what I would call "full coverage." Why? Because
the state-required minimum may not cover the cost of a serious accident.
In California the state-required minimum for auto liability insurance is
$15,000 per person for injuries, up to $30,000 per accident, and $5,000
for property damage. These amounts may not be sufficient in the event
of a serious accident. In the event these amounts are not enough to fix
the damage caused by a serious accident, you will be personally responsible
for the rest. For that reason,
consider purchasing higher levels of coverage, if you can afford to do so.
California also mandates that auto insurance companies offer you uninsured/underinsured
motorist (UM/UIM) coverage with your policy. However, but the law allows
consumers to waive UM/UIM coverage and many people do so to bring down
the cost of insurance. I explain to my clients that liability insurance
protects everyone else on the road but you, but UM/UIM protects you from
others on the road who either are driving with no insurance or without
enough insurance to cover your injuries and damages in the event of a
serious accident. If a client is seriously hurt by a driver who either
has no auto insurance or has a minimum policy, the client's own UM/UIM
coverage often makes the difference between getting my client fairr compensation
for her injury and not. For that reason, I tell my clients
do not waive UM/UIM coverage.
There are other
optional coverages that the law does not require, but that might be helpful in the event
of a serious accident including:
Medical Payments coverage povides reimbursement for medical expenses for accident related
injuries to you or your passengers. This will allow you to cover medical
expenses health insurance does not cover (co-pays and deductibles) or
allow you to get medical treatment without health insurance.
Collision coverage will pay for accident related damage to your car regardless of
who is at fault. This will allow you to get your car repaired even if
the other driver's insurance company is disputing how the accident
happened. Other related coverages include
Roadside Assistance/Towing and
Collision only covers the market value of your car, not what you paid for
it or what you may owe the finance company. If your car is totaled in
a serious accident, there may be a “gap” between what you
owe on the vehicle and your (or the other driver's) insurance coverage.
To cover this, you may want to look into purchasing
Gap Insurance to pay the difference.