Automotive Journal

As with most states, California state auto insurance law requires all drivers to carry three fundamental liability components.

Bodily Injury Liability (BIL) of $ 15,000 / person

Total Bodily Injury Liability (Total BIL) of $ 30,000 for each accident

Property Damage Liability (i.e. PDL) of $ 15,000 / accident

The insurance business knows this as 15k/30k/15k.

To limit your coverage to these minimums, would be looking for trouble. Multi-car collisions & legal fees commonly boost the cost of an automobile accident into the hundreds of thousands of dollars. If you’re at fault and you’ve gone with the minimums, you personally, are now on the hook for the shortfall. Now you must re-mortgage your house, forfeit your savings & probably even more…sound good?

Based on experience, I recommend a bare minimum of 100/300/100 and more if you’re on the road often…particularly in the numerous elite communities of Southern California. Spending a few more dollars here is value for money.

So far, we’ve discussed only liability coverage and that doesn’t apply to injuries to you and damages or loss of your vehicle. The rest of what we will talk about is not required by California statute.

First, let’s look after you. Personal Injury Protection (PIP) provides injury, death and disability coverage for you & your passengers. I recommend PIP coverage of no less than $ 100,000.

Next, your vehicle. To most people, full coverage means collision and comprehensive.

Collision insurance has a two-fold purpose; to cover the repair cost of your damaged vehicle or, if “totaled”, to make a monetary settlement. You must pay for a predetermined deductible, & the insurer pays for the rest.

Comprehensive covers your car for theft and vandalism and damages caused by fire, animal impact and acts of God.

Another important coverage is protection against uninsured or underinsured drivers. It’s not your fault, but he can’t pay…your uninsured driver coverage kicks in.

Southern California auto insurance may allow “pay by the mile” plan.

CA’s Insurance Commissioners have tabled a plan allowing insurance companies to charge based on actual miles driven. Just like buying prepaid minutes for your cell phone…you would pay in advance for a specified number of miles to be traveled in a fixed period of time. A monitoring device installed in the car will allow insurance companies to observe a driver’s car usage and charge accordingly.

Consumer protection groups are pushing for the proposal because paying for driven miles, as opposed to the insurance company’s projection, should allow cost savings for low mileage motorists.

And possibly more important, it will serve as an incentive for drivers to stay off the road. Environmentalists predict this type of car insurance in La Mesa will encourage consumers to drive less…meaning lower fuel usage, reduced pollution and less congestion on the road.

The program looks like a winner to me.

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