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Car Insurance: The Complete Guide

Car Insurance: The Complete Guide

You cannot legally drive or purchase a car in the US without car insurance. This is how you do it:


Required car insurance coverages:

Bodily injury liability

$15,000 per person

$30,000 per accident

Property damage liability

$5,000 per accident


In English, that means in the event of an accident, your insurance will pay a maximum of $15,000 for one person’s medical bills, and if more than one person is injured, the most they will pay is $30,000. Your insurance will also only pay $5,000 towards property damage. However, it’s important to know that California is considered an “at-fault state,” which means there are no restrictions on accident-related lawsuits.


It’s important to mention that minimum coverage only covers other people’s damages. If you don’t buy any additional insurance, you’ll have to cover your own damages yourself. Comprehensive and collision insurance, which cover physical damages to your vehicle, isn’t mandated by law, but are required by lending companies if your vehicle is leased or financed.


So what are my other options?


There is, of course, optional coverage that you can purchase which isn’t mandatory, but highly recommended. Uninsured/underinsured motorist coverage covers you if the other person involved in a car accident isn’t insured (and 15% of California drivers aren’t).


Medical payments insurance is also highly recommended and will cover the medical bills of you and your passengers regardless of fault.


Other types of optional coverage include towing and roadside assistance and rental reimbursement, which covers the cost of a rental car while yours is being repaired after an accident.


If you want to make sure you’re getting the best coverage possible for the lowest cost, talk to an insurance agent.


There is a penalty on getting caught driving with no insurance. If you’re a California driver caught on the road uninsured, you’ll face a fine of up to $200, and up to $500 for a second offense.


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