Insurance Blog

As with most states, California 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 (Total BIL) of $ 30,000 for each accident

Property Damage Liability or 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. Multiple pile-ups and ambitious lawyers often drive the cost of a vehicular accident to well beyond six figures. 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?

Based on experience, I strongly suggest a bare minimum of 100/300/100 and more if you’re often on the road…particularly in the many elite communities of the Golden State. A few extra dollars spent 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. The rest of what we will discuss is not required by CA law.

First, let’s think about 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 people, having both collision and comprehensive insurance is known as full coverage.

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

Another important coverage is protection against uninsured or underinsured drivers. It’s not your fault, but he can’t pay…your uninsured driver coverage kicks in.

Auto insurance Southern California proposes “Pay-Per-Mile”.

CA’s Insurance Commissioners have tabled a plan allowing insurance companies to charge based on actual miles driven. Similar to purchasing prepaid cellular phone minutes…consumers would pay in advance for a number of miles to be driven during a specified time period. A device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.

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 some say more importantly, it will incenticize drivers to stay off our roads. Environmentalists say this type of car insurance in La Mesa will encourage consumers to drive less…meaning lower fuel usage, reduced pollution and less road congestion.

The program looks like a winner to me.