California Auto Insurance – What You Now Need and Savings Coming Up
Post date: January 27th, 2010 |
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As with most states, California state auto insurance law requires all motorists to carry three fundamental liability components.
Bodily Injury Liability or BIL of $ 15,000 per person
Total Bodily Injury Liability (Total BIL) of $ 30,000 for each 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. Multi-car accidents and ambulance chasing lawyers commonly drive the cost of an auto accident to several hundred thousand dollars. If you’re at fault and you’ve gone with the minimums, you personally, are now on the hook for the shortfall. So, you must sell your house, empty your bank account and probably alot more…how does that sound?
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 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. 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 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 “totaled” to make a cash settlement. You are liable for a nominated “deductible” amount…and the insurance company pays the remainder.
Comprehensive insurance protects your vehicle against theft & vandalism and damages from fire & smoke, animal impact and Mother Nature.
Another essential coverage is 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 proposes “Pay-Per-Mile”.
CA’s Insurance Commissioners have tabled a plan allowing insurance companies to charge based on actual miles driven. Just like buying prepaid minutes for your cell phone…you would pay in advance for a specified number of miles to be traveled in a fixed period of time. A monitor fixed to the vehicle will allow insurers to observe car usage & charge accordingly.
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 possibly more important, it will serve as an incentive for drivers to stay off the road. Environmentalists predict this type of car insurance in La Mesa will encourage motorists to drive less…meaning lower fuel usage, reduced pollution & less congestion on the road.
The plan looks like an all-out winner to me.