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California Auto Insurance Policies: Understanding Limits

California Auto Insurance Policies: Understanding Limits

California roads are some of the busiest and most populated in America. In 2017, the California Department of Motor Vehicles issued about 27 million driver licenses. In the last few years, statewide reportage of accidents has been upwards of 500,000 annually. In San Francisco alone, the number of traffic fatalities increased by 43% from 2010 to 2016. Why does this matter to you? It does because even though you may be a safe driver, there are countless drivers on the road that aren’t, and they cause collisions. This makes protecting yourself with insurance incredibly important.

Absent an understanding of insurance policies, choosing car insurance can seem like a lesson in astrophysics. More importantly, you may be paying a premium for coverage you assume you have, but in fact, do not. Different types of car insurance coverages protect against different types of loss. Understanding the state’s insurance coverage policies, as well as what is required by law, is very important for individuals to protect themselves on the road. In some situations, these limits and policies are what keep you and your family safe from potential financial hardships following a crash.

So, when you are searching for car insurance, you must know what you are required to carry by law and what you should carry to protect yourself and your family. Here is information that can help you.

What Is the Minimum Car Insurance Coverage in California?

California only requires drivers to have bodily injury liability and property damage liability coverage. Bodily injury liability coverage will pay for the damages like medical costs and lost wages to the people, other than the negligent driver, that were hurt in a car accident. Similarly, property damage liability coverage pays for the damage to vehicles or other property losses caused by the driver. These are two separate coverages in every car insurance policy and each are required by law.

There is no limit to the dollar amount that you can choose for your insurance coverage. The higher coverage though, the higher your premium payments will be to the insurance company. However, California requires minimum coverage of:

  • Bodily Injury Liability Coverage: $15,000 per person, and $30,000 per accident.
  • Property Damage Liability Coverage: $5,000.

This is known as a 15/30 policy. The limits mean for a single accident, the insurance company will cover up to $15,000 for the injuries to one person, while paying up to $30,000 for the total damages for injuries to all persons in the accident. Anything in excess of these amounts would be the responsibility of the driver who caused the accident (“negligent party”). Under the same policy, the insurance company will pay up to $5,000 for property damage. A lot of the time the minimum coverage required by law does not fully compensate for the injuries and property damage. It is often recommended for drivers to have higher limits on their insurance coverages for better protection.

It is very important to understand that your bodily injury liability and property damage coverage does not cover you, your family, or your vehicle. Our firm has come across the scenario numerous times where a responsible driver has the minimum coverage, but the client’s medical expenses and lost wages far exceed the available coverage. Most of these times, the responsible driver does not have any assets and the client must settle for the $15,000.

What are the other types of coverage?

Car insurance companies offer other coverages under your car insurance. These include uninsured motorist bodily injury, uninsured motorist property damage, comprehensive, and collision. Each of these coverages will pay you for your injuries or your property damage:

  • Uninsured/Underinsured Motorist Bodily Injury: This coverage will pay for your injuries if the other driver who was the cause of the accident is either uninsured or does not have enough insurance. This type of coverage is truly the only way to protect yourself from other drivers.
  • Comprehensive: This coverage will pay for damage to your car from theft, vandalism, flood, fire, or other unexpected situations. Be sure to read the policy documents to understand what is covered and what is excluded.
  • Collision: The insurance company will pay for damage to your car when it hits or is hit by another car or object. This is the opposite of property damage coverage liability and covers your vehicle as opposed to another driver's.
  • Medical Payments: If someone is injured while in your car, or if you injure someone else in another car, this coverage will help pay for the medical expenses related to the accident. No finding of fault is needed to receive these payments.

What Is Umbrella Insurance Coverage?

In the State of California, there are some situations in which a person may have “umbrella coverage” This is essentially a second tier of insurance in addition to the car insurance. This type of coverage can help protect drivers and individuals who may face large liability claims.

Umbrella insurance becomes relevant when the injuries and property damage is more than the car insurance coverage. Umbrella insurance, sometimes called “excess insurance,” covers numerous situations including bodily and personal injury, property damage, and injuries to someone at your house.

How is it determined who pays for the accident?

Whenever there is an accident, car insurance companies will allocate fault depending on how the accident occurred. For example, a driver who is inattentive and rear-ends another driver will typically be found 100% at fault for the accident. The insurance company for the driver who caused the accident will then be responsible for making payments to repair the car and for any injuries as a result of the accident.

Sometimes, a couple drivers may share fault for the accident. In these situations, car insurance companies will argue over who should pay for the accident. The payments will be based on the percentage of fault for each driver and the compensation will be reflected by these percentages. Car insurance companies may try to shift fault to reduce the amount they pay in an accident. Law firms, like RFTM, assist clients in allocating as much fault as the facts justify away from our client and onto those who are responsible. Sometimes, when the allocation of fault cannot be resolved, a jury decides.

Why Insurance Coverage Is Not Only Required but Essential for Drivers?

California’s minimum insurance limits have been the same since 1974. As everyone knows, the cost of a doctor visit has increased a lot since 1974. Even fixing a car is a lot more expensive. A driver who is injured in an accident incurs medical expenses, lost wages, and a number of other damages that our legal system was built to reimburse and compensate. Most of the time the only form of compensation is through insurance. Without enough insurance, someone injured will not be fully compensated. On the flip side, someone who is not properly protected is at risk of losing assets like a house or savings.

Insurance is available for protection—not only when one is hurt due to the negligence of someone else, but also when you are found at fault for an accident. It is important to review your insurance coverage to ensure that your home and family is protected. It is also important to know that if another driver is at fault for your harm, that your own insurance coverage will provide additional compensation to you, if necessary. Spending a few minutes today to look at your insurance coverage and making changes where necessary will save a lot of headaches in the future.

At Rouda Feder Tietjen & McGuinn, we have the necessary experience to guide injured parties through the complex legal matters that arise following a vehicle accident. We understand how insurance policies work and what needs to be shown in order for a claim to be effective and successful. And, we have experienced and well-qualified attorneys to prosecute your claim when litigation becomes necessary.

Our San Francisco car accident lawyers have been putting the rights of injured individuals first since 1980, and it has helped us recover more than $500 million on behalf of our clients. When you need trusted advocacy, you can count on us to help you through.

Call our firm today at (415) 940-7176 and speak with a lawyer about your rights. We offer free consultations so you can get the peace of mind you deserve without worrying about financial burdens.