California Auto Insurance Basics


Carrying just the right amount of auto insurance coverage takes some prior knowledge of the facts and requirements in the state of California. There are some things that are mandatory and there are some things that are just common sense.

There are six major areas of coverage for automobile insurance. The minimum levels of coverage vary from state to state. In general, these areas are: Bodily injury liability, Property damage liability, Personal Injury Protection (PIP), Collision, Comprehensive, Uninsured/Underinsured motorist’s coverage. Some of these coverage’s are mandatory in the state of California. Liability insurance is one that is required by the state.

California requires you to carry the minimum amounts of liability insurance set by the state. You may certainly want to include other coverage options depending on your needs for you, your family and your vehicles.

Bodily injury liability covers any damages that you may have caused another person if an accident were to occur. This coverage includes medical bills and loss of income. Property damage liability covers the repair and/or replacement of any property that was destroyed as a result of an accident. Property damage liability also covers any “pain and suffering” claims.

If you still owe money on your vehicle you must carry the proper insurance required by the lender to protect their investment. If you do not provide adequate or proof of insurance, the lender will take matters into their own hands and find insurance coverage for you and bill you for it in addition to your regular car payment.

Collision insurance should be added if you do not have the funds to repair or replace your vehicle in the event of an accident. Comprehensive coverage protects the value and replacement of your car in the event that it is damaged as a result of anything other than an accident, for example if your car is stolen, someone breaks into it or there it suffers flood damage.

Additional medical payments or PIP (personal injury protection) covers any additional medical expenses that are not covered by your passenger’s health insurance or your own.

You determine the amount that you want to set your deductibles – the higher the deductible the lower the rate. But be careful, you don’t want to cut corners now and be sorry later. It’s much easier to pay rates that may seem a little higher right now but will take a burden off you when you really need it. Plus the peace of mind knowing that you have appropriate coverage is woth the investment you put into your policy now.