It’s not fun! Most people think of insurance as paying for their car if it gets in an accident. They think of the money they pay every month. They are required to have car insurance if they want to drive a car. Why is this? You don’t have to buy auto insurance! You have other options. The State of California will let you drive without auto insurance if you can prove you have enough money in the bank if to pay for damaging or killing other people or their cars while we all share the road. You may not be able to do that, so you need to buy auto insurance. Did you notice we haven’t even talked about your car yet?
State Required Minimum Auto Insurance
You have to have insurance (or other evidence of financial responsibility) to drive on public roads. The coverage you must have is:
Bodily Injury – Insurance that pays when you are at fault for injuring others. This coverage is to pay for medical expenses of other people. It is quoted using two numbers:
15/30 – “Down & Dirty”
What is 15/30 coverage? It is $15,000 per person and $30,000 per accident.
So, if by driving your car you cause another person to have $60,000 in medical bills, how much will your insurance pay them at minimum coverage? Did you say $15,000? Right!
What if you cause bodily injury to 4 people in another car and the total is $100,000 in damages? At state required minimum limits of liability, your insurance will pay a maximum of $30,000, but no more than $15,000 to one person.
Is that it?
Nope. The other part of Liability Coverage is what your insurance will pay for property damage you cause. The state minimum property damage is $5,000. So if you damage a $25,000 car or a house or you take out a $40,000 boat parked in someone’s driveway how much will your state required minimum coverage pay? Yes! $5,000. It is very common for insurance agents in California to give their clients $10,000 property damage because not much in California is worth only $5,000!
Notice once again that we haven’t even talked about paying for damage to your car yet! Like we said, it’s not fun talking about accidents or paying for insurance, but we’ll make it a painless as possible.