Time and time again, prospective clients answer my question regarding their insurance coverage with “I have full coverage.” When I ask them what their uninsured motorist/underinsured motorist coverage is, they typically don’t know. Actually, I have noticed that most people do not know what limits of coverage they carry. It would be wise to check over your declaration page and verify your coverages and update them, if needed, with the help of your agent.
Available Coverages for Others:
Liability. California requires drivers to carry a minimum of $15,000/$30,000 liability coverage to pay for injuries and damages to the party in an accident you cause. You can choose limits generally up to $1,000,000.
The limits are typically stated as three numbers, i.e., 15,000/30,000/5,000. These numbers mean your insurance company will pay the party you injured $15,000. If there are multiple people hurt the total limit paid to all are $30,000. Property damage will be capped at $5,000. Property damage liability coverage is required by law in most states. It typically helps cover the cost of repairs if you are at fault for a car accident that damages another vehicle or property, such as a fence or building front.
Although California law only requires 15,000/30,000/5,000 insurance, it may not be enough to pay for the other party’s losses. It is especially likely to be inadequate if the accident is serious or there are many people in the other vehicle.
An at-fault driver is personally liable for damages that exceed the limits of his/her coverage. So it usually makes sense for a driver to purchase as much liability insurance as he or she can afford, especially if the driver has significant assets (such as a home).
Coverages for Me:
Collision. This coverage pays for damage to your own auto when it collides with another auto or object. If repairing your vehicle costs more than it’s worth, this coverage will pay its value. If you don’t carry collision and you’re struck by an uninsured motorist, you will be responsible for the repairs.
Collision coverage has a deductible, which is the amount you pay before your coverage helps pay for your claim. You can typically choose the amount of your collision deductible when you buy coverage. Depending on your insurer, you may have several deductible amounts to choose from — typically $0, $100, $500 or $1,000.
Comprehensive. This pays for damage to your auto for losses that result from anything other than a collision, i.e., fire, theft, or vandalism.
Comprehensive coverage has a deductible, which is the amount you will be responsible for out of pocket if you file a claim in which the deductible applies.
Rental Reimbursement. This coverage pays expenses you incur for a rental car while your vehicle is being repaired. Your policy will have limitations, such as a dollar amount per day, with a maximum amount insurance will pay.
Medical Payments. If you or your passengers are injured in an accident, this coverage can help pay for medical bills. However, every insurance company pays this coverage out differently. Some will pay the entire amount to you even if your healthcare has paid the bills. However, some carriers will only pay your out-of-pocket or they will reimburse you only what they think is the reasonable value of the service. Make sure to get specific reimbursement particulars of the policy from your agent.
Underinsured Motorist Coverage pays for your bodily injury damages that are the result of a not at fault accident with an underinsured driver. A motorist is considered underinsured if their liability coverage is not enough to pay the full amount of your damages.
This coverage will be included in your policy unless you reject it. NEVER REJECT IT. More and more often, drivers are carrying low liability limits or are driving uninsured. This coverage protects you.
If you can afford it, carry higher liability limits and carry the same UM/UIM coverage as your liability. Also, never carry lower limits on this coverage than you do on your liability coverage. Nine times out of 10, my clients have lower UM/UIM coverage than liability. Your agent is not doing you any favors. In fact, I would find a new agent. Uninsured motorist coverage is relatively inexpensive and it protects YOU. Why would you want to cover a stranger with more insurance than you cover yourself?
Coverage issues can be complicated. There are various case scenarios, i.e., being a pedestrian in a crosswalk, hit-and-run accident, driving a borrowed auto, etc., which we can help you with. Or if your insurance company is unfairly denying coverage, please contact us. We are happy to help right the wrong.