As with most states, California auto insurance law requires all motorists to carry three fundamental liability components.

Bodily Injury Liability (BIL) of $ 15,000 / person

Total Bodily Injury Liability (Total BIL) of $ 30,000 for each accident

Property Damage Liability (i.e. PDL) of $ 15,000 / accident

The insurance industry refers to this as 15/30/15.

To limit your coverage to these minimums, would be looking for trouble. Multi-car accidents and ambulance chasing lawyers commonly drive the cost of an auto accident to several hundred thousand dollars. If you’re at fault and you’ve gone with the minimums, you personally, are now on the hook for the shortfall. Now you must re-mortgage your house, forfeit your savings & probably even more…sound good?

On the basis of experience, I recommend a minimum of 100k/300k/100k…more if you’re on the road often, particularly in the up-market communities of California. Spending a few more dollars here is value for money.

Until now, we’ve talked about liability coverage only. That doesn’t cover injuries to you and/or damages to or loss of your automobile. What we will discuss from here on is not mandated by law in California.

First, let’s think about you. Personal Injury Protection (PIP) pays for injury to you and your passengers no matter who was at fault. I suggest PIP coverage of no less than $ 100,000.

Next, your vehicle. To most people, having both collision and comprehensive insurance is known as full coverage.

The purpose of collision insurance is two-fold; to cover the cost of the repair to your damaged vehicle or if “totaled” to make a cash settlement. You are liable for a predetermined “deductible” amount and the insurer pays the balance.

Comprehensive insurance protects your vehicle against theft & vandalism and damages from fire & smoke, animal impact and Mother Nature.

Another important coverage is protection against uninsured or underinsured drivers. You are not at fault, but he can’t or won’t pay. Your uninsured motorist coverage steps in.

Auto insurance in Southern California introduces “pay-by-mile” program.

California’s Insurance Board has put forth a proposal to allow insurers to charge consumers based on miles traveled. Similar to buying prepaid cell phone minutes…consumers would pay upfront for a specified number of miles to be driven over a limited period of time. A device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.

Consumer advocates are in favor of the proposal because charging for miles driven (as opposed to an insurance company’s projection) should mean savings to low mileage motorists.

And more importantly to some, the program will provide an incentive for motorists to stay away from the road. Environmentalists say this type of car insurance in La Mesa will encourage consumers to drive less…meaning lower fuel usage, reduced pollution & less congestion on the road.

The plan looks like an all around winner to me.

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