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Lena Melkonian, Esq.
Is Your Auto Insurance Properly Covering You?

Is Your Auto Insurance Properly Covering You?

Accident liability insurance is mandatory in California. The insurance you purchase covers your legal liability for bodily injuries and property damage caused to another person or their property where you are at fault in an automobile accident.

California law requires a minimum automobile coverage of $15,000 per person, $30,000 per accident and $5000 for property damage (15/30/5). This means if you are at fault for an accident, your insurance company will pay a maximum amount of $15,000 to one person in any one accident for their injury or death. The maximum of $30,000 is a combined figure which is paid for bodily injuries or death of two or more persons in the same accident. The $5000 represents the maximum your insurance company will pay for property damage to another’s property.

For example: You run a red light at an intersection, and T-Bone another car who entered the intersection on a green light. The other car has 3 people in it, who get injured and hospitalized. According to your coverage, your insurance company would pay a maximum combined $30,000.00 to all 3 of the injured persons. The $30,000 can be divided equally ($10,000 to each) or split up differently. If the injured parties do not accept the limits of your insurance policy, they can come after your personal assets.

Most people, especially those who own property or have assets, carry more than the State’s minimum insurance limit. For example, $100,000/$300,000/$50,000 coverage.Some people even have an umbrella policy which is an extra level of protection to your existing auto or home policies by giving you coverage limits beyond your auto or home coverage limits. Having greater coverage protects you and your assets.

Some people, however, tend to purchase only the minimal required coverage because they might not be able to afford a higher coverage or do not think it is important. Yet, it is wise to get coverage that is high enough to protect your assets.

The more you own, the higher liability coverage is what you should have because you have worked hard to achieve your success and assets. If you financially cannot afford to purchase a higher coverage limit – make sure you have comprehensive and collision coverage as well as uninsured motorist coverage to cover your own injuries and damages.

What is Comprehensive and Collision Insurance Coverage:

Liability coverage does not pay for the repairs or cost to your own car. That is why you should purchase comprehensive/collision coverage for your own car.

Comprehensive coverage covers the cost of miscellaneous damages to your car not caused by a collision – such as if your car gets stolen (theft), catches fire, vandalism, or other events not caused by you. Collision coverage covers the cost of damage to your car which resulted from an accident. If your vehicle is new, or leased, you should have these coverages. Finance companies require physical damage coverage. Comprehensive coverage has limits – a maximum that your policy will pay to cover a claim. Typically, it is the actual cash value of your vehicle. Some people choose not to buy collision coverage. If the other party who is at fault for an accident is uninsured or is a hit and run driver, and you do not have the proper collision coverage, then there is no insurance coverage to pay for the damage to your car.

Uninsured and Under insured Motorist Coverage (UM/UIM):

If an at-fault driver is uninsured or a coverage issue exists with their own insurance company (such as the driver is excluded on the vehicle’s insurance policy) or their insurance company became liquidated/bankrupt, your uninsured motorist (UM) coverage can be used if you have it. If you have UM coverage, then don’t fret. A claim is made to your insurance company to cover your injuries and damages. Or if the responsible party’s insurance coverage was too little and you have a higher coverage, your uninsured or under insured motorist coverage steps into the shoes of the responsible party so long as you have the appropriate coverage and your policy limits are adequate. Since this coverage protects you, buy an adequate amount of coverage. Don’t buy the minimum offered. After all, you are buying insurance to cover YOU. Get proper coverage and protect yourself.

Medical Payments Coverage (Med-Pay)

Med-pay coverage is optional insurance but is another good coverage. It protects you regardless of who is at fault for the accident. The coverage pays your medical expenses, including that of your injured passengers. Different med pay coverages are offered. Some are primary while others are secondary med-pay which is in excess to your health insurance. Med pay is paid from your own insurance company not from the third party’s (the other person) insurance. Med pay is purchased for a given limited amount. For example, you can purchase a $1000, $2000, $5000, $10,000 (or more) med-pay coverage. Many med-pay coverages are reimbursable meaning that if you recover money from the responsible party, you must reimburse your insurance company back the money they paid out for your medical bills. Your attorney may be able to negotiate the amount to be reimbursed to your insurance.

When buying insurance coverage, take your time and know what coverages you are purchasing. . Insurance coverage is an important matter and choosing the right coverages should not be done in a matter of minutes. Research your coverage options. Ask your insurance agent to explain all available coverages to you in great detail. Or, feel free to call me. I will be happy to spend some time with you and discuss what coverages are important, or to review your existing policy. Be sure you are properly insured and covered. After all, insurance is not only meant to pay for the injuries and damages of others, but it is to protect you.