California law requires every owner or driver of a vehicle to provide evidence of “financial responsibility,” either through self-insurance or more commonly, through the maintenance of liability insurance Cal Veh Code § 16020. Liability insurance is designed to provide compensation to another person in the event that you cause an accident and are found to be liable for damages arising from the accident. Pursuant to Cal Veh Code § 16056, California law requires the minimum amount of liability insurance coverage as follows:
- $15,000 for bodily injury or death of one person in any one accident
- $30,000 for bodily injury or death of two or more persons in any one accident, not to exceed the per-person limits above
- $5,000 for damage to property of others in one accident
The foregoing represents the required minimum amount of liability insurance coverage required under California law. It is not uncommon for individuals to acquire higher amounts of liability insurance coverage to protect their personal assets in the event they are at fault in a serious accident. When purchasing auto insurance, a consumer may also elect to purchase other types of coverage in addition to liability insurance. Examples of additional types of coverage include: Medical Payment Coverage This type of insurance provides coverage for the insured driver and his or her passengers for payment for injuries sustained, regardless of the fault of the driver. This type of coverage is also commonly referred to as “med-pay” or “personal injury protection (PIP)”. The amount of med-pay benefits is determined by the policy limits stated in the insurance policy declarations sheet for the person who purchased the coverage. Uninsured or Underinsured Motorist Coverage These types of coverage protect you against a negligent defendant who does not have liability insurance coverage or has minimum coverage that is inadequate to fully compensate you for your injuries. In the event that you are involved in an accident with an uninsured but negligent individual, a claim would be made under your own uninsured motorist coverage. Your own insurance carrier would then have to pay any judgment which may be rendered, up to the limits of the policy which you purchased. If the person who caused the accident has liability insurance, but the policy limit of his or her liability insurance is less than the uninsured motorist coverage of your policy, and your damages exceed the limits of the other person’s liability coverage, an additional claim may be made under your own policy for underinsured motorist benefits. Collision Coverage Collision coverage is a type of voluntary coverage which provides for the repair or replacement of your own vehicle after an accident, regardless of whether or not you are at fault. This differs from property liability insurance coverage discussed above. An individual who is not at fault in an accident may present a claim for the property damage under his or her own collision coverage or under the negligent defendant's property damage liability insurance coverage. Collision coverage normally includes a deductible, whereas property damage liability insurance coverage does not. In an automobile accident case, after a claim has been paid under collision coverage, the insurance carrier who paid the claim may proceed against the property damage liability insurance carrier for the negligent defendant to recover the amount paid out. This process is called subrogation, and it has no effect upon recovery. |
