When it comes to auto insurance, everyone knows you need liability insurance. In California, you can’t legally drive without it. Of course, only being covered by liability insurance leaves you at risk in the event of an accident. You should have more than the bare minimum.
The question we’re often asked as car accident attorneys is, what is the right amount of insurance? You don’t want to be underinsured and vulnerable in an accident, but at the same time, you don’t want to be paying for coverage that you probably won’t need. What is the happy medium?
Let’s Talk Insurance Coverage Options.
Before answering, let’s take a quick overview of the different types of policies available. As we mentioned, Liability Insurance will cover expenses for the other drivers and vehicles if you cause an accident. However, it does not cover the passengers in your vehicle.
There are two different types of liability: Bodily Injury Liability (BIL) and Property Damage Liability. The first type covers the medical expenses of other people injured in the crash. The second covers their property damage. You’ll see these policies described with a series of slashes, such as a 15/30/10 policy. These numbers refer to the maximum amount that the policy will pay out. The first two numbers refer to the BIL: the maximum amount provided to a single person who was injured is $15,000, and the maximum for all people injured is $30,000. (That’s right—if there are ten people, they still have to split it.) The final number refers to the max amount for property damage, in this case $10,000.
If the damages exceed your policy’s maximum, you are responsible for paying the difference. This is why the minimum coverage in the State of California, 15/30/5, is considered extremely low. Most people opt to have more than the minimum liability coverage, so someone can’t sue them personally and bankrupt them. We strongly recommend you purchase as much liability insurance as you can reasonably afford, but leave room for a few more options…
A Med Pay policy provides coverage for your injuries and those of your passengers in an accident that was your fault (this is called Personal Injury Protection in other states). It generally covers your medical expenses, as well as lost wages and other damages. Med Pay is a good option to have. As for the damage caused to your car, that would be covered by a Collision policy.
One other type of insurance has a confusing name. While you’d think that a Comprehensive policy would cover everything, it doesn’t. Comprehensive coverage pays out for other types of damage to your car, such as theft, someone keying it, or an animal making a nest in your tailpipe—anything not collision-related.
Unfortunately, if you get involved in a serious crash with someone else who has minimum liability coverage, that’s not much money to cover your injuries and vehicle repair. It’s likely that at-fault driver isn’t rich, so suing him or her probably won’t help. That’s why we recommend that you get Uninsured/Underinsured Motorist Coverage. These policies will make sure you’re covered if you’re hit by a driver who doesn’t have enough coverage or is not insured at all.
Research shows that approximately one in seven drivers do not have insurance. The chances of getting into an accident with an uninsured driver are greater than you think. And if you get seriously hurt, you’ll find it extremely difficult to get any compensation from them. With that in mind, carrying coverage for uninsured and underinsured drivers makes a lot of sense.
Yes, We All Need Insurance.
There’s no magic formula that can tell you exactly how much insurance you should carry. The Wall Street Journal recommends that people have at least enough to cover the total worth of their assets. Whatever amount you decide is correct, shop around and do your research. Make sure your insurance company is reputable and has a good track record of paying out what it owes. The more prepared you are, the less likely you’ll find yourself at the mercy of an insurance company that’s refusing to fully compensate you.
Have questions about insurance after a bad car accident in San Diego? Our legal team at Jurewitz Law Group Injury & Accident Lawyers offers a free consultation and policy review. Please call (888) 233-5020 and set up your appointment today.