California Car Insurance 101 – What you need to know about your auto insurance policy

Car insurance is technical due to the fact that it is a legally binding document and all aspects of your car insurance policy have been thoroughly contested in the court system. By understanding car insurance terminology and concepts, you can shop for California car insurance with confidence and even save some money down the road.

California Auto Insurance Policy Terminology 101

• Limits of liability – This is the part of the policy that shows how much protection you have in case of bodily injury or property damage accidents. In California, the state requires a minimum of $15,000 for injury or death to one person, $30,000 for injury or death to more than one person, and $5,000 for property damage. Your auto insurance policy may state limits of 15/30/5 or, if you have higher limits, it may state 100/300/100 or 250/500/100 or many other variations. If you do not have liability insurance, your driver’s license may be suspended, your vehicle registration may be suspended, you may be fined, your vehicle may be impounded, and in the event of an accident, you will be personally responsible for compensating any damage. you caused
• Uninsured/Underinsured Motorist Coverage (UM/UIM) – This auto insurance coverage is often misunderstood by consumers and is an important part of your California auto insurance policy. If another driver causes an accident in which you are injured, and they have low liability limits or, worse, no insurance at all, your UM/UIM coverage will kick in to pay your medical bills. This is coverage for YOU, not the other driver.
• Medical payment or personal injury protection coverage – This coverage is considered “no-fault” coverage and pays for medical expenses for you or your passengers in your car. What most consumers don’t know is that this coverage may apply if you are injured as a pedestrian or while getting in or out of a vehicle.
• Broad or other collision coverage – This coverage protects your vehicle from any damage other than a collision with another vehicle or object. The exception is a collision with a bird or animal, which falls under comprehensive coverage. Examples of covered claims are hail, fire or flood.
• collision coverage – This coverage pays for damage to your vehicle when it hits or is hit by another vehicle or object. If you are involved in a car accident, your collision coverage is the protection that will pay to repair your vehicle.
• Roadside assistance or towing coverage – Insurance companies use different descriptions for this coverage and benefits may differ between companies. This coverage will provide reimbursement if your vehicle needs towing or other roadside assistance, such as a flat tire.
• rent reimbursement – In the event your vehicle breaks down and needs to be in the repair shop, this coverage will pay for a rental vehicle for you to drive. Limits are usually set daily and a total limit, such as 30/600, which would provide coverage at $30 per day up to a limit of $600.
• Deductible – This is the amount you choose to pay before the insurance company pays any amount for comprehensive or collision claims. Deductibles allow you to lower your California auto insurance premiums by choosing a higher deductible.

These are the most common terms found on your California auto insurance policy. Each auto insurance company has its own additional features and benefits that are unique to your policy, so it’s important to read your policy and understand what coverages you actually have. By understanding the basics of how your California auto insurance policy works and the coverages provided, you can shop for California auto insurance with confidence and ensure you get the coverage you need at a price you can afford.