Southern California Auto Insurance – What You Need Now and Savings on the Horizon

Posted by Diana Lim

February 13, 2010

As with most states, California auto insurance law requires all motorists to carry three fundamental liability components.

Bodily Injury Liability (BIL) of $ 15,000 per person injured

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.

However, to rely solely on this amount of coverage, would be foolish. Multi-car collisions & legal fees commonly boost the cost of an automobile accident into the hundreds of thousands of dollars. If you’re to blame and you’ve opted for the minimums, you personally, are now liable 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?

Based on experience, I recommend a bare minimum of 100/300/100 and more if you’re on the road often…particularly in the numerous elite communities of Southern California. A few extra dollars spent here is money well spent.

Thus far, we have discussed only liability insurance which doesn’t cover your injuries and damages to your car. The rest of what we will discuss is not required by CA law.

First, let’s think about you. Personal Injury Protection (PIP) pays for injury to you and your passengers no matter who was at fault. I suggest PIP coverage of no less than $ 100,000.

Next, your vehicle. To most of us, full coverage means having both collision and comprehensive.

Collision insurance has a two-fold purpose; to cover the repair cost of your damaged vehicle or, if “totaled”, to make a monetary settlement. You are liable for a nominated “deductible” amount…and the insurance company pays the remainder.

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 may allow “pay by the mile” plan.

The California Insurance Commission has proposed that insurance companies be allowed to charge policy holders on the basis of actual miles driven. Similar to buying prepaid cell phone minutes…consumers would pay upfront for a specified number of miles to be driven over a limited period of time. A monitoring device installed in the car will allow insurance companies to observe a driver’s car usage and charge accordingly.

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 say this type of car insurance in La Mesa will encourage motorists to drive less…meaning lower fuel consumption, reduced pollution & less road congestion.

The plan looks like an all-out winner to me.

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