California Auto Insurance – What You Now Need and Savings Coming Up
As with most states, California state auto 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 for each accident
Property Damage Liability (i.e. PDL) of $ 15,000 / accident
The insurance industry refers to this as 15/30/15.
To limit your coverage to these minimums, would be looking for trouble. Multiple pile-ups and ambitious lawyers often drive the cost of a vehicular accident to well beyond six figures. If you’re at fault & you’ve stuck to the minimums, you and your estate, are now liable for the shortfall. Now you must re-mortgage your house, forfeit your savings & probably even more…sound good?
Based on experience, I recommend a bare minimum of 100/300/100 and more if you’re on the road often…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. What we will discuss from here on is not mandated by law in California.
First, let’s take care of you. Personal Injury Protection (PIP) covers injury to you and/or your passengers. I recommend PIP coverage of no less than $ 100,000.
Next, your vehicle. To most people, full coverage means 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 essential coverage is protection from 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 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 buying prepaid cell phone minutes…consumers would pay upfront for a specified number of miles to be driven over a limited period of time. A monitor fixed to the vehicle will allow insurers to observe car usage & charge accordingly.
Consumer advocates are in favor of the proposal because charging for miles driven (as opposed to an insurance company’s projection) should mean savings to low mileage motorists.
And more importantly to some, the program will provide an incentive for motorists to stay away from the road. Environmentalists predict this type of auto insurance in La Mesa and other California cities will encourage consumers 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.