February 24th, 2010

As with most states, California 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 per accident

Property Damage Liability (i.e. PDL) of $ 15,000 / accident

The insurance business knows this as 15k/30k/15k.

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?

On the basis of experience, I recommend a minimum of 100k/300k/100k…more if you’re on the road often, particularly in the up-market communities of California. Spending a few more dollars here is value for money.

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 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 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 must pay for a predetermined deductible, & the insurer pays for the rest.

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 can’t pay…your uninsured driver coverage kicks in.

Auto insurance Southern California introduces “pay-by-mile” program.

California’s Insurance Commission has tabled a proposal allowing insurance companies to charge consumers based on actual miles driven. 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 device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.

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 say this type of auto insurance in La Mesa and other California cities will encourage consumers to drive less…meaning lower fuel usage, reduced pollution and less road congestion.

The program looks like a winner to me.

Share and Enjoy:

• 
• 
• 
• 
• 
• 

Recent News

Categories

Archives

Meta: