Many folks unfortunately think that purchasing auto insurance is about finding the lowest price. It isn’t. It’s about finding the best coverage to protect your assets. If you purchase the California state minimum of $15,000 per person, $30,000 per accident, but you make $50,000 a year, or you have equity in your home, or you own multiple vehicles, etc.; a good Plaintiff’s lawyer will go after you personally and forgo your auto insurance. Your auto insurance policy should at a minimum double or triple your assets, in an effort to disincentivize anyone from ever coming after you personally.
- Liability: This coverage is what you purchase to protect your assets in the event that you cause the collision. Again, we recommend purchasing liability that ir double or triple your total assets.
- UM/UIM: As stated in our Article, “The Importance of Uninsured Motorist Coverage”, this coverage protects your body (injuries) against uninsured motorists or underinsured motorists who have small liability limits insufficient to make you whole. I recommend having a 100/300 at a minimum. If you can get more, please do. What is the value of a life or limb?
- Umbrella: This coverage can supplement your liability or UIM coverages and can also cover other types of negligent acts like defamation, landlord liability, and other personal liability situations. It does not cover any intentional acts, such as criminal acts. For example, if you cause an injury and only have a $100,000 liability but you have a $1M umbrella. Then you have $1,100,00.00 protecting your assets. It’s great to have and C&C highly recommends it. Read the policy language closely, as not all umbrellas include UIM.
- Collision: This coverage protects your vehicle for any damage caused by another vehicle. If you want a lower deductible (you get in accidents often), then your monthly payment will be higher. Likewise, if you want a lower monthly insurance premium (you don’t get in accidents often), then increase your deductible. Deductibles can range from $250, $500, $1000, to even $2,500. A deductible is the portion you are required to pay out of pocket before your insurance pays the rest. If you are not at fault for the collision, your auto insurance should reimburse your deductible if the other party was insured via the subrogation process.
- Comprehensive: This coverage protects your vehicle from “freak incidents” like rocks falling on your car, vehicle theft (including your personal property inside of your car), hitting an animal, or a tree falling on your vehicle. Rental or homeowner’s insurance also covers any theft of personal property from your vehicle.
- Medical Payments: This coverage acts like health insurance. If you are uninsured we recommend you purchase “Med Pay Straight” so that it acts as no-fault primary health insurance. This means that if you are in an accident, regardless of who caused the collision, your medical bills will be covered up to whatever limit you purchased. If you do have health insurance, then this is just an added plus and we do not recommend it if you are trying to save money on your policy. If your health insurance has a high yearly deductible, we recommend you purchase “Med Pay Excess.” These medical payments kick in to pay any out-of-pocket costs not covered by your primary health insurance, like deductibles or expensive co-pays.
- Tow & Rental (Roadside): While many folks skip this coverage, we highly recommend purchasing these two coverages given the high amount of uninsured and underinsured drivers in California. Our state allows Insurance companies to take up to 40 days or more to make their liability decision in a collision. So even if you are not at fault, and the other driver has insurance, you could be waiting 30-45 days for a rental car if you do not have tow & rental coverage. Don’t ever be at the mercy of the other driver.