As you are probably aware by now, California increased the liability limits and property damage required on January 1, 2025 from $15,000/$30,000/$5,000 to $30,000 for one person in an accident/$60,000 for multiple people in a single accident/$15,000 for property damage to someone else’s vehicle or property.
Liability coverage in California is mandatory. If your policy limits and premium have not increased yet, you haven’t had your renewal date. The limits and premiums for liability coverage will only occur at the time of your renewal in 2025. So, if your last renewal was in late December, you have not been hit with the new limits. So, this is a good time to look at your insurance coverages. And, if your liability limits and premiums have already been increased, it is still a good time to evaluate your insurance coverages.
These new limits are much needed. The prior liability coverage, which had not been increased since 1974, were no longer adequate. Medical expenses have increased in recent years due to advances in treatments, diagnostics, and higher healthcare costs. Vehicle repairs are also more expensive due to the complexity of new cars and rising labor costs.
What you should do now regarding your insurance policy:
• Your insurance carrier will not raise any other coverage you currently have EXCEPT the liability. You will definitely want to up your UM/UIM coverage to match your liability limits. Insurance agents and companies do not tell you this!
• You might consider increasing your liability coverage beyond the required limits. Accidents can lead to higher than expected medical costs. Raising your limits reduces the risk of paying out of your pocket if you are in a serious accident. But remember to raise your UM/UIM coverage also.
• With rising premiums, more people will go uninsured, in which case, if you are in an automobile accident, your UM/UIM coverage will be all the insurance you can collect on. So, ensuring your UM/UIM coverage is as much as possible is critical. This coverage should always match your liability limits. You cannot have more UM/UIM coverage than liability, however. NEVER decline UM/UIM coverage!
• If you carry medical payments coverage, this is the time to scrutinize your limits to make sure you can pay for hospital and doctor bills incurred from treatment if you are in an automobile accident.
• It’s also time to assess your collision coverage. This coverage pays for damages to your vehicle if it’s involved in a collision with another vehicle or object. To determine how much coverage you need, you should determine your vehicle’s value, consider your deductible, compare the premium cost v. your car’s value, and evaluate whether you can afford to pay for repairs or replacement if you have an older automobile or the value of your car is low. Generally, if you lease or finance your auto, the finance company will require you to carry collision coverage.
These liability limits will remain in effect until January 1, 2035, at which point they will be raised to $50,000/$100,000/$25,000.
How Can Traut Firm Help?
The good news for low-income individuals is that we have the California Low-Cost Auto Insurance Program. This program offers lower coverage limits–$10,000 per person and $20,000 per accident for injuries or death. It also covers $3,000 in property damage. Eligibility criteria include holding a valid California driver’s license, meeting income guidelines and owning a vehicle worth $25,000 or less.
The benefits of these increased limits are not without challenges. The financial burden of higher premiums will most likely be felt by those who can least afford them. Insurance companies may tighten their claims handling practices, leading to longer settlement negotiations and potentially more litigation. For personalized assistance and a free case evaluation, call James at Traut Firm. We are here to fight for you.
