As with most states, California state auto insurance law requires all drivers to carry three fundamental liability components.
Bodily Injury Liability (BIL) of $ 15,000 / person
Total Bodily Injury Liability (Total BIL) of $ 30,000 for each accident
Property Damage Liability (i.e. PDL) of $ 15,000 / accident
The insurance business knows this as 15k/30k/15k.
But please understand that to rely on this coverage alone, would be asking for trouble. Multi-car accidents and ambulance chasing lawyers commonly drive the cost of an auto accident to several hundred thousand dollars. 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 extra dollars here is money well spent.
Until now, we’ve talked about liability coverage only. That doesn’t cover injuries to you and/or damages to or loss of your automobile. What we will discuss from here on is not mandated by law in California.
First, let's think about you. Personal Injury Protection (PIP) provides injury, death and disability coverage for you & your passengers. I recommend PIP coverage of no less than $ 100,000.
Next, your vehicle. To most of us, full coverage means having both collision and comprehensive.
The purpose of collision insurance is two-fold; to cover the cost of the repair to your damaged vehicle or if “totaled” to make a cash settlement. You are liable for a predetermined “deductible” amount and the insurer pays the balance.
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. The accident is not your fault, but the guilty party can’t pay. Your uninsured driver coverage kicks in here.
Auto insurance in Southern California introduces “pay-by-mile” program.
The California Insurance Commission has proposed that insurance companies be allowed to charge policy holders on the basis of 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 maybe more importantly, the plan will act as an incentive for drivers to stay off the pavement. Environmentalists predict this type of auto insurance La Mesa will encourage consumers to drive less…meaning lower fuel usage, reduced pollution & less congestion on the road.
The plan looks like an all around winner to me.