Whenever you own a vehicle in California, it goes without saying that you will need auto insurance coverage in order to drive it legally. Purchasing California auto insurance is easier said than done when you take certain factors into consideration, especially when it comes to determining how little or how much coverage is needed to protect you. In order to figure out how much coverage you need, you have to do some research and evaluate the amount of coverage that your budget will allow. Basic Rules of Thumb Whenever you are shopping for California auto insurance, there are certain “rules of thumb” to be aware of. In addition to determining your insurance needs you also want to figure out how much coverage to purchase as follows: Determining your needs – in addition to your age, assets, and driving history/record, you also need to consider the age, make, and model of your vehicle. You need to determine your risk tolerance or the amount of money that you can afford to pay out of your own funds should you have a claim. Finally, check for any discounts that you might qualify for. How much coverage to purchase – consult with an insurance agent to find out what your state minimums are and educate yourself on the different coverages that are available. Most importantly, shop at least 5 or 6 companies in order to do the most thorough pricing comparison possible. What Coverage is required by Law? Every state, with one exception (New Hampshire), requires any owner of a vehicle to have liability insurance coverage. The same holds true in the state of California. Liability coverage protects against bodily injury and takes care of the other driver’s medical costs when you are the at-fault driver in the accident. It also protects you against the property damage to other vehicles that has resulted from the accident. California minimum liability coverage requirements for private passenger vehicles are covered under California Insurance Code §11580.1b as follows: $15,000 for the death of or injury a single individual $30,000 for the death or injury to more than one individual $5,000 for property damages So the minimum liability coverage in these amounts will be expressed as 15/30/5 on your insurance policy. Although this will save you a great deal of money on your premium rate, if you are the at-fault driver it will not be sufficient for covering you should you get involved in a serious accident. Other Coverages to Consider The average California Auto Insurance policy is a collection of uniquely different coverages that protect you in a variety of ways. Here is how those other coverages are broken down: Collision – covers the costs associated with repairing any damages to your vehicle whether it is caused by an accident or not, such as when the vehicle slides on an icy highway or road and hits an inanimate object. It also covers damage caused by potholes. NOTE: Collision coverage increases in price as you lower your deductible. Therefore, it can be very costly. Comprehensive – covers any damage other than what has been caused by a collision of two or more vehicles. This includes acts of God and/or nature (e.g. flood, hail, wind, and other storm damage), getting a chipped or cracked windshield, damages resulting from theft or vandalism, or hitting a deer. NOTE: Comprehensive is oftentimes reasonably priced and features a lower deductible amount. Medical expenses – covers the costs of any medical treatment for injuries to you as well as your passengers as a result of an accident. The coverage limit that you establish will pay for every person’s medical claims. Uninsured/Underinsured Motorist – also written as UI/UIM, this coverage does exactly as its name implies. It covers you and your passengers in the event of an accident that is caused by the other driver when he or she either has no auto insurance or too little to cover any the total cost of damages. UI/UIM coverage pays for emergency medical care, lost wages, medical expenses, and pain and suffering. On a closing note, be sure you do your research. You should find this information extremely helpful when you are shopping for California auto insurance and are trying to determine how much you need.
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