Hi Auto Insurance: California Coverage Explained

California and Hawaii have very different auto insurance requirements. California law states that all drivers and owners of a motor vehicle shall at all times be able to establish financial responsibility. This can be done by purchasing auto liability insurance, making a cash deposit with the DMV, or obtaining a surety bond. The minimum liability coverage in California is $15,000 for bodily injury per person, $30,000 total per accident, and $5,000 for property damage. On the other hand, Hawaii's auto insurance coverage requirements include bodily injury liability coverage of $20,000 per person and $40,000 per accident, basic personal injury protection of $10,000, property damage liability coverage of $10,000, and uninsured/underinsured motorist coverage of $20,000 per person and $40,000 per accident. It is important to note that uninsured/underinsured motorist coverage can be rejected in writing in Hawaii.

Minimum liability coverage

In California, drivers must carry minimum coverage auto insurance, which includes liability insurance. Liability insurance protects you financially if you are found to be at fault for an accident. It helps pay for medical bills and property damage repairs for those involved in an accident you caused. However, it's important to note that liability coverage does not cover damage to your car or your own medical bills.

The minimum liability coverage in California is currently set at $15,000 for bodily injury or death per person and $30,000 per accident. Additionally, there is a minimum of $5,000 for property damage per accident. These limits are mandated by California law and are the minimum insurance limits for a standard auto policy.

While these are the minimum requirements, it is recommended that drivers consider their individual needs and opt for higher coverage limits. California is a "pure comparative negligence state," which means that if you are found to be at least 1% at fault for an accident, you may be responsible for paying some or all of the medical and car repair bills for anyone else involved. Therefore, having higher liability limits can provide better protection in the event of a more severe accident.

Furthermore, the minimum coverage may not adequately protect your assets in an accident. For example, if you cause an accident resulting in injuries and car damage to another driver, you will likely be responsible for their medical bills and car repair costs. If their medical bills amount to $45,000 and their car damage is $20,000, the current minimum liability coverage will only cover the first $30,000 in medical bills and $15,000 in repairs, leaving you with a significant out-of-pocket expense.

Starting January 1, 2025, the minimum liability coverage limits in California will increase to $30,000 for bodily injury or death per person and $60,000 per accident, with a minimum of $15,000 for property damage per accident. These new limits will provide better protection for drivers, but it is still important to consider your individual needs and assets when determining the appropriate level of coverage.

Collision coverage

One of the key benefits of collision coverage is that it offers peace of mind. With this coverage, you can drive knowing that your car is protected in the event of an accident. You won't have to worry about paying out of pocket for repairs above the cost of your deductible. Collision coverage also provides coverage for your loss if your damaged vehicle is deemed a total loss. In some cases, you may even pay nothing at all for repairing or replacing your vehicle if you have additional coverage options alongside your collision insurance.

When deciding whether to opt for collision coverage, it's important to consider factors such as the age and value of your car. Collision coverage is particularly relevant for newer, more expensive vehicles, as well as older cars that still maintain a good value relative to your deductible and monthly rate. If you're leasing or financing your car, collision coverage may be required by your lender.

The cost of collision coverage can vary depending on the value of your car. It's generally recommended that if the cost of collision coverage is more than 10% of your car's actual cash value, you may be spending more than necessary to protect the vehicle. Additionally, choosing a higher collision deductible can lower your monthly premium, as you'll be covering more of the repair costs yourself when needed.

Comprehensive coverage

In California, comprehensive coverage is not required by law. However, if you finance or lease an automobile, your lender can demand that you have this coverage. It is also important to note that comprehensive coverage does not cover mechanical breakdown, normal wear and tear, or maintenance.

When purchasing comprehensive coverage, you may have to pay a deductible. This is the amount of loss that you must pay before your insurance company covers the rest. For example, if a storm causes $1,500 of damage to your car and you have a $500 deductible, you must pay the first $500, and then your comprehensive coverage will pay the remaining $1,000.

Uninsured motorist coverage

UMC helps solve the problem of drivers who are unable or unwilling to pay for their own insurance. It also takes the burden off private health insurers and government programs like Medicare and Medi-Cal to pay for your car accident injuries.

Underinsured motorist coverage (UIM) is also a mandatory part of your car insurance policy in California unless you sign a written waiver. It kicks in if your damages after a car accident are more than what the at-fault driver's policy covers. UIM pays you the difference between your total damages and the at-fault driver's policy limit (up to your policy limit).

Note that your UIM payment gets reduced if you have other insurance sources that can cover your losses, such as workers' compensation insurance or the at-fault driver's employer's insurance.

The minimum UMC/UIM policy allowed under California law is:

• $15,000 for bodily injury coverage or death per person
• $30,000 for total bodily injury or death per accident (to all people in the other vehicle combined)
• $3,500 for property damage

However, the default UMC/UIM offered by California insurers is typically:

• $30,000 for bodily injury coverage or death per person
• $60,000 for total bodily injury or death per accident (to all people in the other vehicle combined)
• $3,500 for property damage

It is highly recommended to purchase as much UMC/UIM as possible, with a $300,000-$500,000 policy suggested as ideal.

Medical payments coverage

Med Pay is particularly useful if you have no health insurance, or if your health insurance has high deductibles or co-pays. Even if you have good health insurance, Med Pay can be beneficial as it also covers passengers in your vehicle, regardless of whether they have health insurance. Unlike many health plans, Med Pay has no limit on the types of services or providers you can use. Additionally, Med Pay coverage is "per incident," meaning there is no yearly limit or cap on what you may claim, as is the case with many health insurance policies.

In California, the minimum limit for Med Pay coverage that you can buy is $1,000 for each person injured. However, most insurers offer higher limits, typically $2,000, $5,000, $10,000, and $25,000, and some large insurers offer Med Pay coverage of up to $100,000. The amount of Med Pay coverage you should purchase depends on your budget and what other types of insurance you have.

It is important to note that Med Pay does not cover costs related to property damage, expenses not related to the accident, or accidents not involving a vehicle. Additionally, if you were at fault for the accident, your insurer has the option to raise your rates.

Frequently asked questions