California State Auto Insurance – What You Need Now & Savings on the Horizon
As with most states, California state car insurance law requires all motorists to carry 3 fundamental liability components.
Bodily Injury Liability (BIL) of $ 15,000 / person
Total Bodily Injury Liability (Total BIL) of $ 30,000 per accident
Property Damage Liability (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 at fault and you’ve gone with the minimums, you personally, are now on the hook 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 extra dollars here is money well spent.
Thus far, we have discussed only liability insurance which doesn’t cover your injuries and damages to your car. 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 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.
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 essential coverage is protection from uninsured drivers. It’s not your fault, but he won’t pay. Here’s where your uninsured/underinsured driver coverage comes to the rescue.
Southern California auto insurance proposes “Pay-Per-Mile”.
California’s Insurance Board has put forth a proposal to allow insurers to charge consumers based on miles traveled. 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 mileage monitor will be installed in the vehicle, and insurance companies will charge on the basis of miles driven.
Consumer protection groups are pushing for the proposal because paying for driven miles, as opposed to the insurance company’s projection, should allow cost savings for 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 car insurance in La Mesa will encourage motorists to drive less…meaning lower fuel consumption, reduced pollution and less congestion on the road.
The plan looks good to me.
