Why You Need More Than the Minimum Auto Insurance Requirements


If you live in the bustling city of California, the state requires you to hold the minimum insurance coverage as follows: $15,000 per person for injury/death, $30,000 per accident for injury/death and $5,000 property damage per accident

That seems to be a nifty coverage, but trying thinking beyond that point. At any time, medical bills could reach as high as $25,000 in a matter of days and that coverage is good enough for a single person. Other expenses could still add up.

So, is there something you can do to protect yourself from future setbacks? Of course, you can by tripling the minimum state’s coverage with a minimal cost. Having the right kind of car insurance protects you from unnecessary personal expenditures, huge financial obligations and possible legal issues.  If you’re still wondering why the state’s minimum insurance is insufficient, continue reading the facts we have gathered below.

Now, let’s talk about the property damage set at $5,000. For that coverage, you ought to stay away bumping newer cars that could easily tip the scale between $12,000 and $25,000. The $5,000 property coverage is good only for older cars with almost no value left. Now, if you’re stuck on a very unlucky situation by derailing a shiny and very expensive car, get ready to foot the bill and pay any excess bills within a few days after the accident.

To ward off the bad luck, you can solve this by increasing the property damage coverage. This will require you to talk to your insurance agent; that is, beefing up your property coverage and still paying less.

Right now, we can tell that if you hold the state’s minimum insurance coverage, it is like creating a very big hole and exposing yourself to all future vulnerabilities and legal battles. This goes by the saying that you are never safe as long as you have a minimum coverage.

Next, let’s talk about that measly $15,000 injury protection. What if someone you bumped across the highway just suffered a $80,000 worth of medical bills? You know your insurance company is only required by law to cover up to $15,000. This could only mean one thing, you paying the remaining $65,000! Unless you are filthy rich, $65,000 wouldn’t be much of a problem. There’s no way you could pay that hefty amount, unless you sell your home. Without a doubt, being underinsured will bring only headaches, financial difficulties, legal tussles, and a bucketful of bad luck.

As you can see, California’s minimum insurance coverage is utterly low, which means it won’t suffice especially if you’re planning to get into a car loan. Nearly all lenders will require you to have, at the very least, full coverage insurance before your loan application gets even its first base. Naturally, the lenders need to secure your property because it’s theirs now as long as you’re still with them. This is to make sure that in case something untoward happens, they will be able to collect payments from your insurance company. Millions of drivers who have existing loans from financial institutions and banks would know this fact that minimum coverage is indeed never good enough.