As with most states, California state auto insurance law requires all drivers 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 per accident
Property Damage Liability (i.e. PDL) of $ 15,000 / accident
The insurance business knows this as 15k/30k/15k.
But to rely on this coverage alone, would be sheer foolishness. Multiple pile-ups and ambitious lawyers often drive the cost of a vehicular accident to well beyond six figures. If you are at fault and you have gone with the minimums, you personally, must cover 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 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. The rest of what we will talk about is not required by California statute.
First, let’s take care of you. Personal Injury Protection (PIP) pays for injury to you and your passengers no matter who was at fault. 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.
There are 2 reasons for collision insurance; to cover the cost of repairs to your damaged auto or, if the vehicle is “totaled”, to compensate you in cash. You must pay for a predetermined deductible, & the insurer pays for the rest.
Comprehensive insurance protects your vehicle against theft & vandalism and damages from fire & smoke, animal impact and Mother Nature.
Another important coverage is protection against uninsured or underinsured 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. 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 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 possibly more important, it will serve as an incentive for drivers to stay off the road. Environmentalists predict this type of auto insurance La Mesa will encourage consumers to drive less…meaning lower fuel consumption, reduced pollution and less road congestion.
The plan looks good to me.
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