California State Auto Insurance – What You Need Now & Savings on the Horizon

February 2nd, 2010 by admin

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

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

Total Bodily Injury Liability (Total BIL) of $ 30,000 per accident

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

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

But to rely on this coverage alone, would be sheer foolishness. 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 at fault and you’ve gone with the minimums, you personally, are now on the hook for the shortfall. As a result, you’ll need to sell your home, empty your savings account and possibly more. How does that sound to you?

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 dollars 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. What we will discuss from here on is not mandated by law in California.

First, let’s look after you. Personal Injury Protection (PIP) covers you and your passengers for injury and/or accidental death. I suggest PIP coverage of no less than $ 100,000.

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

Collision insurance has a two-fold purpose; to cover the repair cost of your damaged vehicle or, if “totaled”, to make a monetary settlement. You are liable for a predetermined “deductible” amount and the insurer pays the balance.

Comprehensive covers your car for theft and vandalism and damages caused by fire, animal impact and acts of God.

Another vital coverage is protection against uninsured drivers. The accident is not your fault, but the guilty party can’t pay. Your uninsured driver coverage kicks in here.

Auto insurance Southern California introduces “pay-by-mile” program.

California’s Insurance Commission has tabled a proposal allowing insurance companies to charge consumers 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 more importantly to some, the program will provide an incentive for motorists to stay away from the road. Environmentalists predict this type of car insurance in La Mesa will encourage motorists to drive less…leading to lower fuel consumption, reduced pollution & less congestion on the road.

The plan looks like an all around winner to me.