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How Does Car Insurance in California Work?

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By Yosi Yahoudai
Founder and Managing Partner

Everyone should know that you must maintain a certain amount of car insurance if you drive on public streets in California. Unless you have been in an accident, you might not understand the ins and outs of insurance coverage. 

A California car accident attorney can handle your injury claim if you got hurt in an accident that was someone else’s fault. This blog will provide a brief overview to answer the question, how does car insurance in California work? 

Required Car Insurance in California

Liability coverage pays for property damage or injuries to other people in accidents for which you are at fault. This coverage does not pay benefits to you or your family members. According to the California Department of Insurance, you must carry at least these amounts of liability insurance coverage: 

  • $15,000 per person for death or injury. 
  • A total of $30,000 for two or more people injured or killed in the accident. If two people are injured or if 10 people get hurt or killed, the liability policy will pay out a maximum total of $30,000.
  • The minimum property damage liability coverage is $5,000. This coverage will pay for damage to other vehicles or structures and objects damaged by the collision. 

These policy limits are the minimum coverage. It is highly recommended that you carry significantly higher liability coverage. If you are at fault in a crash, you will be responsible for the payment of any judgment that exceeds these amounts. You will have to pay them out of your personal resources. 

Let’s say that you caused an accident for which a jury found you responsible in the amount of $100,000. If you have $100,000 of liability coverage, your insurance can pay that judgment. On the other hand, if you only carry the minimum required coverage, your insurance might only pay up to $35,000 for personal injuries and property damage, leaving you responsible for the remaining $65,000 from the judgment. 

California’s “Fault” System for Car Accidents

Some states use a no-fault system for car accidents. In those states, you have to rely on your own car insurance, usually called personal injury protection coverage, even if you did not cause the crash.

California uses the fault system for car accidents, instead, which means that the person who caused the accident through carelessness has to pay for the harm they caused. 

What Different Types of Car Insurance Cover

In addition to the option of buying higher policy limits, there are other types of car insurance available in California. These include:

  • Uninsured Motorist Coverage (UMC)/Underinsured Motorist Coverage (UIM). Your insurance company must offer you this coverage. If you decline this coverage, you must sign a form indicating that they offered it to you and you turned it down. Uninsured motorist coverage can help pay your losses if the other driver caused the accident and did not have insurance. Uninsured motorist coverage also can pay your losses if you get involved in a hit and run accident. Underinsured motorist coverage can help pay your losses that exceed the at-fault driver’s liability coverage. For example, if the at-fault driver only carried minimum liability coverage and your injuries were severe, your UIM coverage could help pay your losses that remain after the at-fault driver’s coverage pays its full policy limits. 
  • Medical payments coverage can cover the medical bills of you or your passengers, regardless of whether you were at fault in the collision.
  • Collision and comprehensive coverage are two types of insurance that cover physical damage to your car. Collision is for damage caused by another vehicle or an object colliding with your car. Comprehensive covers everything else that could damage your car like theft, vandalism, or severe weather, but does not cover normal wear and tear or similar issues. 

A California personal injury attorney can talk to you about your personal injury claim. We offer a free initial consultation. There is no obligation. Reach out to our office today.

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About the Author
Yosi Yahoudai is a founder and the managing partner of J&Y. His practice is comprised primarily of cases involving automobile and motorcycle accidents, but he also represents people in premises liability lawsuits, including suits alleging dangerous conditions of public property, third-party criminal conduct, and intentional torts. He also has expertise in cases involving product defects, dog bites, elder abuse, and sexual assault. He earned his Bachelor of Arts from the University of California and is admitted to practice in all California State Courts, and the United States District Court for the Southern District of California. If you have any questions about this article, you can contact Yosi by clicking here.