Auto Insurance in California - What You Need Now & Savings on the Way
Friday, February 26th, 2010 Subscribe To Our Feed
As with most states, California state car insurance law requires all motorists to carry 3 fundamental liability components.
Bodily Injury Liability (i.e. BIL) of $ 15,000 per person
Total Bodily Injury Liability of $ 30,000 / accident
Property Damage Liability or PDL of $ 15,000 per accident
In insurance industry jargon, this is known as 15/30/15.
But please understand that to rely on this coverage alone, would be asking for trouble. Multiple car accidents and ambulance chasers (i.e. lawyers) can drive the cost of a car accident to six figures and well beyond. If you’re to blame and you’ve opted for the minimums, you personally, are now liable for the shortfall. Now you must re-mortgage your house, forfeit your savings & probably even more…sound good?
From experience, I recommend no less than 100k/300k/100k and more, if you are on the road frequently…particularly in the abundant elite communities of Californ-i-a. Spending a few extra bucks here is money well spent.
So far, we’ve discussed only liability coverage and that doesn’t apply to injuries to you and damages or loss of your vehicle. The rest of what we will talk about is not required by California statute.
First, let’s take care of you. Personal Injury Protection (PIP) covers you and your passengers for injury and/or accidental death. I recommend PIP coverage of no less than $ 100,000.
Next, your vehicle. To most of us, full coverage means having both collision and comprehensive.
The purpose of collision insurance is two-fold; to cover the cost of the repair to your damaged vehicle or if “totaled” to make a cash settlement. You will pay for a pre-specified deductible amount and your insurer will pay for the balance.
Comprehensive covers your car for theft and vandalism and damages caused by fire, animal impact and acts of God.
Another valuable coverage — protection from uninsured drivers. You are not at fault, but he can’t or won’t pay. Your uninsured motorist coverage steps in.
Auto insurance in Southern California may allow “pay by the mile” plan.
CA’s Insurance Commissioners have tabled a plan allowing insurance companies to charge based on actual miles driven. Similar to purchasing prepaid minutes for a mobile phone…the consumer would pay up-front for a fixed number of miles to be driven in a limited period of time. A device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.
Consumer advocacy groups are supporting the proposal because paying for miles actually driven (instead of an insurance company’s estimate) should provide savings to low mileage drivers.
And some say more importantly, it will incenticize drivers to stay off our roads. Environmentalists say this type of auto insurance in La Mesa and other California cities will encourage motorists to drive less…leading to lower fuel usage, reduced pollution & less congestion on the road.
The plan looks good to me.
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