A recent report outlines some of the facts about required car insurance coverage. However, many people remain in the dark about the basic facts regarding required coverage or how their insurance will pay if they are involved in an accident.
Here are some tips for understanding basic coverage as well as optional products that may help you protect yourself and your family if you are involved in a car accident.
The Big Three
California, like most states, requires that the owners of all vehicles driven or parked on state roads be able to prove financial responsibility. This can be done in three ways: through a cash deposit with the state, through a surety bond, or through liability insurance coverage purchased from a company licensed to do business in California. Of the three, a liability insurance policy is by far the most common method of proving financial responsibility.
For drivers who choose to purchase liability insurance, the policy must meet minimum coverage requirements. In California, these include:
- $15,000 in coverage for injury or death of one person
- $30,000 in coverage for injury or death of multiple people in a single accident
- $5,000 for damage to property
However, most vehicle owners choose to purchase more than the minimum amount of coverage and may add additional coverage to a policy to fully protect themselves and their families.
Why Should I Purchase More Car Insurance?
Purchasing more than the minimum amount of coverage for your vehicle is a wise investment if you have assets you would like to protect. This is because the insurance company will only pay up to the policy limits; any amounts beyond that are the responsibility of the driver.
If you are involved in an accident and injure another person, the medical bills alone could easily exceed the $15,000 minimum set by the state. In that case, you would be personally responsible for any amounts above the $15,000 policy limit. A lawsuit could mean that your home, business or other assets would be placed in jeopardy.
From another perspective, it also pays to have uninsured motorist coverage. With so many uninsured motorists on the road, there is a good chance that someone who hits you may not be covered. If that is the case, your uninsured motorist coverage will pay for your costs up to your policy limits.
What If I Do Not Have Car Insurance?
Not having liability insurance is a serious offense. If you are caught driving without proof of insurance, you can be fined and acquire points on your license. Points are issued for various infractions and can cause your car insurance premium rates to go up. Eventually you could lose your license if you acquire enough points.
Further, a person without insurance has no protection from litigation if he or she causes injury in a car accident. Driving without insurance means that you would face the payment of whatever sums are awarded to the victim without the help of an insurance policy to pay these costs.
If you have been the victim of an accident involving a person with no insurance or limited insurance coverage, talk to a personal injury attorney about your options for collecting damages.