California Auto Insurance – How much is enough?
Let’s face it—it’s expensive to own and operate a car. Rising gas prices, the cost of service and parts, and of course insurance costs are a big part of the overall expense. There are a lot of insurance carriers advertising about “low cost” insurance in this day and age, but what do you really get for this low cost?
Depending on the state you live in, there are minimum coverage requirements. In accordance with California insurance regulations, the lowest limits of coverage you can carry to comply with state requirements are $15,000/30,000 on bodily injury to others (not in your car), and $5,000 property damage (that is damage to someone else’s car or whatever you may run into). Many car owners are purchasing these low limits to keep the cost of their insurance down, which is very easy to understand. However, in the event of a serious accident, these limits will not be adequate if there are major injuries or you hit a high valued vehicle. (See rough notes article)
For example, assuming that you were in an accident where you are at fault, and the car you hit is a newer Mercedes with four people inside. On the property damage side, you have $5,000 of protection on a car that is totaled and is worth $50,000.00. If you are at fault, you will be responsible for the damage over what you are insured for. And on this same accident, assuming those in the car were injured, any bodily injury damage over $15,000 to each person becomes the responsibility of the party at fault. That is not very much coverage based on today’s cost of medical care.
So what’s my point here? Minimum coverage policies are more affordable in the short term, but may cost you more in the long term if you are in a major accident. It really does not cost that much more to increase your limits, to get better protection. It is crucial that you talk with your agent and discuss your California auto insurance policy to determine the best coverage and protection and determine the cost of this coverage so you can see the value of having the correct limits of coverage on your policy. Don’t just buy the least expensive coverage-make sure you purchase the best coverage, that protects you well, and that fits your budget.
Written by: Gary Remland – Remland Insurance Services Inc.