NEW CHANGES TO CALIFORNIA LAW
Effective January 1, 2025, California’s new auto insurance law now requires that drivers carry auto insurance with minimum limits of $30,000 for injury/death to one person, $60,000 for injury/ death to more than one person; and $15,000 for damage to property. These new limits will remain in effect until 2035, when they will again increase.
California is one of the 38 at-fault states, which means that the driver who causes the accident is responsible for paying the damages. This is why California law requires all vehicle owners in the state to have and maintain auto insurance.
RECOMMENDED INSURANCE COVERAGE
While the minimum insurance requirements are defined above, it is recommended by experts that you carry higher coverage limits to ensure adequate protection for yourself and others. In this article, we will break down the different types of insurance coverage so that you can decide what best fits your personal needs.
TYPES OF COVERAGE AVAILABLE
In California, there are many different types of insurance coverage available. Although you may be familiar with common coverages such as personal liability, it is important that you are informed of the additional coverage options such as medical payment coverage and gap coverage. The different types of insurance coverage available in California are as follows:
- Personal Liability Coverage
- Collision Coverage
- Comprehensive Coverage
- Uninsured/Underinsured Motorist Coverage
- Medical Payments Coverage
- Personal Injury Protection Coverage
- Personal Umbrella Policies
- Rental Car Coverage
- Gap Coverage
Depending on your specific needs, these various different types of coverage can be combined to ensure that you are covered against what is important to you and not spending extra money on coverages that you do not need or want.
PERSONAL LIABILITY COVERAGE
The primary form of coverage that everyone is required to have is Liability Coverage. In the event that you cause an accident, liability coverage will pay the medical bills, property (vehicle) damages, and other losses suffered by the other driver and their passengers.
Liability coverage ONLY covers situations where you are at fault for the accident. This coverage will not pay for your damages–it only covers the innocent party.
COMPREHENSIVE COVERAGE
Comprehensive coverage is designed to protect you in the event that your vehicle is damaged due to something other than a crash or collision, and is outside the vehicle owner’s control. Comprehensive coverage is not required, but will cover vehicle damages in instances such as:
- Flooding
- Hail
- Falling objects (rocks, trees, debris)
- Hail
- Theft
- Vandalism
If you lease or finance a vehicle, you may be required to hold this form of coverage. If you have a newer vehicle, of higher value, it is recommended that you have comprehensive coverage to ensure that your vehicle is protected.
COLLISION COVERAGE
Typically, collision coverage is bundled with comprehensive coverage under your insurance policy. Simply, collision coverage will pay to repair or replace the vehicle if it is damaged in a collision with another vehicle, property, or a pedestrian.
Collision coverage is recommended because it ensures you are covered even if you end up being at-fault for the accident.
UNINSURED/UNDERINSURED COVERAGE
Uninsured coverage applies when the at-fault driver does not have any liability insurance coverage. If you are an innocent party, and you suffer damages due to an at-fault driver with no insurance, your uninsured policy will cover your bills and damages.
Underinsured coverage applies when the at-fault driver holds an insurance policy, but their limits are too low to fully compensate you for your injuries and damages. For example, if you get into an accident with a driver who only holds the minimum policy limits, and your damages exceed the policy limits available, your underinsured coverage will kick in and cover the remaining costs.
However, underinsured coverage does not apply to property (vehicle damage), and will only apply to medical bills, funeral expenses, and other expenses related to injuries.
MEDICAL PAYMENTS COVERAGE (MEDPAY)
Typically referred to as Med Pay, this policy covers medical bills and funeral costs for the policyholder and any passengers, regardless of who was at fault. Med Pay coverage is particularly helpful in instances where an individual is injured in an accident where they were deemed at-fault. Med Pay will kick in and assist with medical bills related to the accident. If you are not at-fault, Med Pay will still assist with medical bills for injuries related to the accident.
GAP COVERAGE
Gap coverage is an additional option on car insurance policies. It is intended to pay for the difference between the value of a policyholder’s car at the time of an accident and what the policyholder owes on the car. Gap coverage is helpful in the following instance:
For example, if the policyholder is involved in a car crash while driving a vehicle that is being leased or financed, and the vehicle is deemed a total loss, (damaged beyond repair), the insurance company will pay the actual cash value of the vehicle. This could result in a few thousand dollars less than what is owed to the financing company. In this type of situation, the gap coverage will pay for the difference between what is owed to the company so that it does not come out of your pocket.
UMBRELLA POLICIES
Although personal umbrella policies are not necessarily a type of insurance coverage, they are available to people who want more car coverage than the maximum that their insurer offers. If an at-fault party in an accident has a claim made against them that goes over their insurer’s maximum coverage amount, the umbrella policy will pay the remaining amount up to the umbrella policy’s limits.
IF YOU HAVE BEEN INVOLVED IN A CAR ACCIDENT IN CALIFORNIA, CALL TORKLAW!
Many people are unaware of the details of their auto insurance policy until it is too late. When purchasing car insurance, it is always better to be over-prepared, and to expect the unexpected!
At TORKLAW, our goal is to be the primary resource for anyone who has been involved in a car accident and is in need of legal assistance. Our team of experienced attorneys will walk you through every step of the process, and ensure that you are properly compensated for your injuries and damages. We will handle all steps of your claim from inception to settlement.
Call us today at (888) 845-9696 for a free consultation!
