When an accident occurs in California, whether an automobile accident or an accident such as a slip and fall on someone else’s property, the way that injuries are almost always paid for is through liability insurance. Because California is an at-fault state, the insurance company of the person whose negligence caused the accident and related injuries is responsible for paying for the injured party’s damages.
Very often when a client comes to see me, what they’re primarily concerned with is how much automobile insurance is owned by the person who caused the accident they were in. But I like to counsel people–when I can–on (for their own future needs) how much automobile insurance they should be carrying. Keep in mind that the amount of automobile insurance that you should be carrying should take into account both liability insurance and other insurance types, such as medical payments, collision coverage, and medical payments coverage. Consider my recommended amounts:
What is the Minimum Car Insurance Requirement in California?
Under California law, you must have automobile insurance, and there are severe penalties for not having it. The minimum limits are $15,000 per person, and $30,000 per accident.
Is The Minimum Amount of Car Insurance Enough For Me?
For 99 percent of all people, this is not a sufficient amount of insurance. One general rule, both in terms of protecting yourself and protecting people you might injure, is that you want to carry insurance that is double the amount of your own personal assets. For instance, let’s say you’re a wealthy person and you own a million dollar home, you really should have no less that $2 million in liability insurance. Otherwise, your home could be at risk if somebody is badly injured. And, also you’re going to want to see that person protected.
How Much Auto Insurance Should You Have?
In general, I’d say if you can afford nothing like that, that a good minimum is $100k per person, $300k per accident. Of course it depends on your own economics, but in general buy as much insurance as you can afford to protect yourself and others. This way, if you are involved in a crash that you cause and the other party is severely injured, you have enough liability insurance to not only ensure that the injured party gets the medical care that they need, but also that you are protected from personal liability (i.e. you will not need to pay the injured party’s claim out of your own pocket because you carry an inadequate amount of liability insurance).
Protecting Yourself if Another Party Is at Fault or/and You Are Injured
Carrying liability insurance in as high of a coverage amount as is financially possible for you is a smart idea, and can protect you if you cause serious damages to another party through an act of your own fault. But what happens if you are also injured in a crash that you cause, or if you are hit by a driver who does not carry any, or enough, insurance to pay for your injuries?
This is where carrying high coverage amounts of other insurance types becomes important, too. The three types of coverage I strongly recommend carrying, and in as high of an amount as you can afford, including:
- Medical payments coverage. Medical payments coverage is not required in California, but should be purchased by all drivers. This type of coverage pays for your injuries in a crash, as well as injuries to any of your passengers, regardless of fault. The minimum amount of coverage that you may purchase for medical payments coverage is $1,000 for each person injured, although higher coverage amount are available and recommended.
- Collision coverage. Collision coverage, like medical payments coverage, is applicable regardless of fault and pays for damages to your vehicle if you are involved in a collision with another vehicle or an object. This compensation is provided based on the market value of your car.
- Uninsured motorist insurance. Uninsured motorist insurance is perhaps the most important type of supplemental insurance coverage that you can buy in California. Insurance companies must offer you this coverage type, however, you are not obligated to purchase it, although you certainly should. This type of coverage will pay for both injuries and property damage when the at-fault driver does not have enough insurance, or any insurance at all, to pay for your losses. The coverage will pay for property damage up to $3,500; bodily injury coverage is usually the same as your liability coverage for bodily injury (i.e. $15,000 per person/$30,000 per accident).
The best way to protect yourself in the event that you are in a crash is to carry enough insurance. If you do not already have as much insurance as you can afford, I recommend rethinking your policy limits.