Posted on Friday, 29th January 2010 by admin
As with most states, California state car insurance law requires all motorists to carry 3 fundamental liability components.
Bodily Injury Liability or BIL of $ 15,000 per person
Total Bodily Injury Liability (Total BIL) of $ 30,000 for each accident
Property Damage Liability or PDL of $ 15,000 / accident
The insurance industry refers to this as 15/30/15.
But to rely on this coverage alone, would be sheer foolishness. 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. Now you must re-mortgage your house, forfeit your savings & probably even more…sound good?
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. Spending a few extra dollars here is money well spent.
Until now, we’ve talked about liability coverage only. That doesn’t cover injuries to you and/or damages to or loss of your automobile. What we will discuss from here on is not mandated by law in California.
First, let’s look after you. Personal Injury Protection (PIP) provides injury, death and disability coverage for you & your passengers. I suggest PIP coverage of no less than $ 100,000.
Next, your vehicle. To most people, having both collision and comprehensive insurance is known as full coverage.
There are 2 reasons for collision insurance; to cover the cost of repairs to your damaged auto or, if the vehicle is “totaled”, to compensate you in cash. You will pay for a pre-specified deductible amount and your insurer will pay for the balance.
Comprehensive protects your auto for theft and vandalism and damages caused by Mother Nature, animal impact and fire.
Another valuable coverage — protection from uninsured drivers. It’s not your fault, but he won’t pay. Here’s where your uninsured/underinsured driver coverage comes to the rescue.
Auto insurance in Southern California proposes “Pay-Per-Mile”.
California’s Insurance Commission has tabled a proposal allowing insurance companies to charge consumers based on actual miles driven. Similar to purchasing prepaid cellular phone minutes…consumers would pay in advance for a number of miles to be driven during a specified time period. A device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.
Consumer advocate groups are backing the plan because paying for miles traveled, instead of an insurer’s estimate, will provide savings for low mileage drivers.
And more importantly to some, the program will provide an incentive for motorists to stay away from the road. Environmentalists predict this type of auto insurance in La Mesa and other California cities will encourage motorists to drive less…leading to lower fuel consumption, reduced pollution & less road congestion.
The plan looks like an all around winner to me.
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Tags: Insurance, Insurance Now
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