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Auto Insurance
California law requires vehicle owners to maintain auto liability insurance in case they cause an accident. The insurance covers the other party’s medical bills, lost wages, car repair bills and other damages, up to the limits of the at-fault driver’s policy.
In California, the minimum liability coverage required by law is 15/30/5. This means the insurance will pay up to $15,000 for the death or bodily injury of any one person; $30,000 total for the death or bodily liability of all other people hurt in the accident; and $5,000 for property damage (including the other vehicle and stationary objects such as fences).
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Most California car insurance companies offer liability insurance with limits greater than 15/30/5. Such additional coverage is optional. The higher the limits, the more expensive the policy and the greater the protection.
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Insurers also sell additional optional coverage that can protect the driver and the driver’s passengers as well as the driver’s own vehicle. Such policies include comprehensive and collision insurance for property damage, and uninsured / under-insured motorist coverage and Med Pay coverage for injuries or wrongful death.
Liability Coverage
California’s financial responsibility laws require drivers to maintain at least 15/30/5 liability coverage. This liability insurance is mandatory for all owners and drivers of motor vehicles in California.
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Liability coverage causes damages to people in other vehicles or on the street when the policyholder causes an accident.
15/30/5 liability coverage will pay up to $15,000 of bodily liability damages incurred by pedestrians or people in another vehicle, with a maximum of $30,000 payable in total to all people in any single accident. This is sometimes also called “15/30” insurance.
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The “5” in 15/30/5 represents property damage payable for damages to the non-fault driver or innocent third parties.
Most California insurers offer higher liability limits than 15/30/5. In general, we recommend purchasing as much liability insurance as you can afford, especially if you are a homeowner or have other significant assets.
Policy Coverage
As a result of the driver's auto liability policy, the innocent party or parties receive reimbursement for their medical bills, property damage and other losses.
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Damages suffered by the driver or passengers in the vehicle that caused the accident are not covered by it.
There is also insurance coverage in place for accidents where the other party is not in an automobile, such as motorcycle accident lawsuits, bike and bicycle accident lawsuits, or pedestrian knockdown cases in California.
Driving With No Insurance
California requires drivers to have 15/30/5 liability insurance. Insufficient proof of insurance will prevent a driver from registering his or her vehicle with the DMV. This may result in the suspension of the license. The court may also assess a fine or even impounded a driver's vehicle.
Insurance Coverage Required
However, even though California only requires 15/30/5 coverage, it may not be sufficient to cover the other party's losses. When the accident is severe or many people are in the other vehicle, it is especially likely that the insurance will not be adequate.
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If the at-fault driver's insurance policy does not cover all damages, the driver is personally responsible.
Especially if a driver has significant assets (such as a home), it usually makes sense to purchase as much liability insurance as possible.
Partially at Fault
In California, if a driver is partially at fault for an accident, he or she may still be able to recover damages under what is known as "shared fault" law, also known as "comparative negligence" or "comparative fault".
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When an insurer represents its policyholder, it will fight to assign a low percentage of fault to its driver. If the other driver is at fault for any damages, he or she is responsible for those damages. As long as the other driver has liability insurance, his/her percentage of damages will be covered up to the maximum amount of that policy.
Hurt and At Fault
Having good health insurance is the best way to protect yourself from an at-fault accident.
Those without health insurance (or with very high deductibles and co-pays) can purchase Medi-Pay Insurance in California and/or California Uninsured/Under-insured Motorist coverage.
Med Pay Insurance
Medical payment coverage is known as "Med Pay". This is an optional form of insurance that can be added to a California auto policy. The policyholder and his or her passengers are covered for medical bills and funeral expenses (up to the policy limits). The policy pays regardless of who was at fault in the accident.
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Under a Med Pay policy, the policyholder can also claim payments if they are hit by a vehicle as a pedestrian, injured as a passenger in another's vehicle, or injured while riding public transportation. Med Pay does not cover damage to any vehicle or other property.
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The standard limit for Med Pay in California is $1,000, $2,000, $5,000, $10,000 or $25,000. Med Pay may be offered in a higher amount by some large insurance companies (such as State Farm). Premiums for Med Pay are relatively low. Acupuncture and chiropractic treatments, for example, are not covered by all health plans.
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Med Pay, however, may not be necessary or desired by people with good health insurance.
Uninsured Motorist Coverage (UMC) /Underinsured Motorist Coverage (UIM)
Underinsured and uninsured motorist coverage (under the umbrella terms UMC and UIM) pays for injuries that policyholders and passengers sustain in accidents caused by someone else.
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UMCs and UIMs apply to at-fault drivers who do not have liability insurance, or who have inadequate coverage to cover the injured person(s)' expenses. For injuries to people, UMC/UIM covers medical bills, funeral expenses, and other expenses. Damages to the driver's vehicle or any other property are not covered by the policy.
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According to California law, auto insurers must offer UMC and UIM coverage with limits that are at least the same as their liability coverage or 30/60 bodily injury liability, whichever is less.
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If a driver purchases the minimum 15/30/5 insurance, he or she should be offered at least 15/30/5 uninsured/underinsured motorist coverage. If a driver has 50/100/25 coverage, he or she must be offered UMC/UIM coverage that includes at least 30/60 uninsured and underinsured motorist bodily injury (UMBI) coverage, but may include more.
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California does not require drivers to purchase UMC/UIM coverage. By signing a waiver, they acknowledge that they were offered the product but decided not to purchase it. An additional premium will apply if they decide to purchase the coverage.
Collision And Comprehensive Coverage
In California, collision insurance is usually provided along with comprehensive insurance.
The collision insurance pays for damage done to your vehicle when it collides with something else while it is moving. This could be another vehicle, a fence, a parking divider or even someone.
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A comprehensive policy pays for damage to your vehicle that is caused by something other than a collision, such as something beyond the vehicle owner's control. Theft, vandalism, fire, hail, windstorm, flood, and falling objects, such as rocks, are a few examples.
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Vehicle values are used to determine collision and comprehensive coverage costs.
In the case of low-value, used vehicles, purchasing this coverage may not be worth the premium.
Newer or more expensive vehicles are usually worth the expense. A California lender is also likely to require collision and comprehensive coverage in order to finance a car loan or lease.
Optional Insurance Coverage
Most California auto insurance companies provide optional coverage for valuable equipment or additional services that their policyholders may need.
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Coverage may be purchased as an "add-on" called an "endorsement" or "rider." California Car Endorsements can include: Coverage for theft or damage to expensive equipment such as stereos, navigation systems or custom wheels; towing and road service; reimbursement of a rental car if your car needs to be in the shop after a covered accident; guaranteed auto protection (gap) insurance to cover the cost of paying off an auto loan or lease if your car is totaled and its market value is less than the balance owed; and/or gap insurance for uber and lyft drivers involved in ride-sharing accidents in california.
Umbrella Policies
For customers who wish to purchase more auto insurance than the policy limit, personal umbrella policies are available. Overages are paid on all policies issued by the same company to the policyholder under an umbrella policy.
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An owner of multiple vehicles may also have a homeowner's or renter's policy. An umbrella policy will cover overage if all the policies are at their maximum limits. An umbrella policy will pay extra damages, up to the limits of the policy, when a claim under a maxed-out policy exceeds its limits.