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California Minimum Auto Insurance Policies & The Need For Uninsured Motorist Coverage

California leads the nation in a many ways – but auto insurance is not one of them.

There are 42 states that require their drivers to carry insurance of more than $15,000. There are seven (including California) that require only $15,000 in liability insurance and one (Ohio) that requires less. There are two states (Alaska and Wisconsin) that require $50,000 in liability coverage. There are roughly 40 that require drivers to carry between $20,000 and $30,000 in liability coverage. Why is California so far behind? What does this mean to California drivers?

Why California Is So Far Behind

The likely reason is that there is no political will to raise the minimum required insurance. What elected official – especially in California, where the legislature is generally not well received – wants to tell his or her constituents they need to pay more money for their auto insurance? Profiles in Courage this is not.

What This Means To California Drivers

Imagine you work as an IT engineer, making $80,000 per year. An insured driver hits your car, breaking your leg. You miss two weeks of work initially, then bits of work here and there as you do physical therapy. Now let’s say you have a health insurance plan that allows your insurance company to recoup money you recover (most plans have this feature) from any third party injuring you. Let’s also assume that you have some out-of-pocket expenses for pain killers, crutches and other assorted items. Let’s also assume that because of the broken leg you missed a ski trip, or your daughter’s school play, or some other important event. Finally, assume the other driver contends that you were at fault. What do you do? You will need to get an attorney to help you if the other insurance company decides to side with their driver, which is very likely. So even if you “win,” you are never really made whole. A portion of the recovery (settlement, verdict, etc.) goes to you. A portion goes to your health insurance company. A portion goes to your attorney. A portion is used to reimburse you for your out-of-pocket expenses. If the other driver has a minimum $15,000 policy, you are looking at splitting a pretty small pie between a few parties. Does this compensate you for your lost wages? Your pain and suffering? The disruption it has caused to your life? The answer is “no.”

Two Solutions

There are two solutions to this problem. The first is to tell your representative in the legislature to work on raising the minimum liability limits. The second thing you can do is get uninsured or underinsured motorist coverage. This coverage is relatively cheap (as explained in an earlier post) and will protect you if the other driver has no insurance or does not have enough insurance.

If you have been in an accident – regardless of the existence or nonexistence of insurance – you should contact a personal injury attorney right away. The insurance companies have teams of lawyers and claims representatives waiting to deny your claim or play hardball. You can contact Clancy & Diaz, LLP for a free in-person consultation.