Auto Insurance in California – What You Need Now & Savings on the Way

Thursday, January 28th, 2010 at 5:45 pm

As with most states, California state auto insurance law requires all motorists to carry 3 fundamental liability components.

Bodily Injury Liability (BIL) of $ 15,000 per person injured

Total Bodily Injury Liability of $ 30,000 / accident

Property Damage Liability (i.e. PDL) of $ 15,000 / accident

In insurance industry jargon, this is known as 15/30/15.

To limit your coverage to these minimums, would be looking for trouble. Multi-car accidents and ambulance chasing lawyers commonly drive the cost of an auto accident to several hundred thousand dollars. If youâ€™re to blame and youâ€™ve opted for the minimums, you personally, are now liable for the shortfall. So, you'll have to sell your property, deplete your bank balance and maybe even moreâ€¦how do you feel about that?

Based on experience, I recommend a bare minimum of 100/300/100 and more if youâ€™re on the road oftenâ€¦particularly in the numerous elite communities of Southern California. Spending a few more dollars here is value for money.

So far, only liability coverage has been discussed...and that does not apply to damages to your vehicle or injuries to you. The rest of what we will discuss is not required by CA law.

First, let's think about you. Personal Injury Protection (PIP) pays for injury to you and your passengers no matter who was at fault. I recommend PIP coverage of no less than $ 100,000.

Next, your vehicle. To most folks, full coverage means the combination of collision and comprehensive.

The purpose of collision insurance is two-fold; to cover the cost of the repair to your damaged vehicle or if â€œtotaledâ€ to make a cash settlement. You must pay for a predetermined deductible, & the insurer pays for the rest.

Comprehensive protects your auto for theft and vandalism and damages caused by Mother Nature, animal impact and fire.

Another essential coverage is protection from uninsured drivers. Itâ€™s not your fault, but he wonâ€™t pay. Here's where your uninsured/underinsured driver coverage comes to the rescue.

Auto insurance in Southern California may allow â€œpay by the mileâ€ plan.

Californiaâ€™s Insurance Commission has tabled a proposal allowing insurance companies to charge consumers based on actual miles driven. Just like buying prepaid minutes for your cell phoneâ€¦you would pay in advance for a specified number of miles to be traveled in a fixed period of time. A mileage monitor will be installed in the vehicle, and insurance companies will charge on the basis of miles driven.

Consumer advocacy groups are supporting the proposal because paying for miles actually driven (instead of an insurance companyâ€™s estimate) should provide savings to low mileage drivers.

And possibly more important, it will serve as an incentive for drivers to stay off the road. Environmentalists say this type of auto insurance in La Mesa and other California cities will encourage motorists to drive lessâ€¦leading to lower fuel consumption, reduced pollution & less road congestion.

The plan looks good to me.

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