Common Question 12

Question: Why automobile insurance is important to you

I am not a fan of insurance companies – I fight them every day. However, I recognize that insurance has benefits for each of us. To understand what type of insurance is best to have, it is important to understand what types of insurance are available, and what will happen without insurance coverage.



The laws of the State of California require that every motor vehicle on the public roadways be covered by some form of liability insurance. This is insurance that will pay to compensate a person who is injured or whose property is damaged in an accident that is your fault.

The minimum coverage limits allowed by law are:

  • $15,000.00 per person,
  • up to $30,000.00 per accident, and
  • $5,000.00 for property damage (such as a damaged automobile). This is usually abbreviated as: “15/30/5”.
  • With this minimum insurance, if you injure someone in an automobile accident, your insurance carrier will pay:
  • one person for injuries of up to a maximum of $15,000.00
  • If two or more people were injured, they will be paid a total of no more than $30,000.00
  • no one person can receive more than $15,000.00
  • Repairs to their vehicle or other damaged property will be paid up to a maximum of $5,000.00.

If you have only this minimum insurance, you will be complying with the law, and will have insurance to pay the other person (up to the stated limits) if you are involved in an accident that is determined to be your fault. You will have no insurance to protect yourself or your own vehicle.


You may find yourself injured in an accident with a person who has no insurance, or who has insurance with very low limits (like the minimum). If the accident is the other person’s fault, you may be glad that you purchased Uninsured/Underinsured Motorist insurance.

This type of insurance:

  • protects you and those in your car by covering injuries caused by an uninsured driver
  • pays you as though it were the insurance of the other driver who caused the accident
  • protects you and those in your car, so you may want to buy insurance with higher limits than the minimum 15/30/5.
  • uninsured motorist property damage covers repairs to your vehicle up to $3,500.00.

Underinsured Motorist insurance comes with Uninsured Motorist Insurance. It will cover you:

  • if your injury claim is worth more than the limit of the other driver’s insurance;
  • you can be compensated for the full value of your claim, up to the limit of the higher of the two insurance policies (yours or the other guy’s). For example:
    • if you have a limit of $25,000.00
    • the other driver has a limit of $15,000.00
    • your injury claim is worth more than the $15,000.00
  • after collecting the limit of the other policy, you can claim up to another $10,000.00 from your own policy.

Remember, with Uninsured/Underinsured Motorist insurance, you still need to prove the value of your claim, just as though you were making a claim against the other driver’s insurance. Your own insurance company will not be “on your side”, but will treat you as though you were “the other guy” and will seek to pay you as little as possible. You may benefit from the assistance of an attorney who specializes in personal injury law. When an accident is not your fault, making a claim against your own Uninsured/Underinsured Motorist insurance should not cause your insurance rates to increase.


Medical Payments coverage through your automobile insurance is designed to pay

  • the medical bills of all persons in your car in the event of an accident, no matter who was responsible for the accident
  • even if the accident is your fault, Medical Payments coverage will pay for your reasonable, necessary medical treatment required as a result of the accident, up to the limit that you have purchased.
  • limits usually run from $1,000.00 to $25,000.00 per person.
  • for example, if there are four people in your car who are injured in an automobile accident
  • with $1,000.00 Medical Payments limits, the insurance will pay for up to $1,000.00 of medical treatment for each person
  • This insurance can cover you and the members of your household even when not in a car, if you or they are involved in an automobile-related accident, such as a pedestrian or bicyclist hit by a car, or even a fall while getting into or out of a vehicle.
  • This type of insurance coverage is not very expensive and can save you a lot of money if you are injured in an accident.
  • When shopping for insurance, be careful, as some medical payment coverage has a deductible or pays only a percentage of the medical bills
  • Even if you have another health insurance plan, Medical Payment coverage will allow you to see a doctor outside your health plan, and may allow you to receive the treatment you need faster than from your regular health plan.
  • Many Medical Payment insurers require repayments of the benefits if you collect from another driver’s insurance. Even so, you may not need to repay the full amount, leaving more compensation for you.


  • Collision coverage pays for the repair of your car if it is involved in a collision. Usually, you must pay the first $50.00 to $1,000.00 of the cost of the repair as your deductible.
  • Remember to select a deductible amount that you can afford to pay in the event of an accident. Some people lower their insurance rates by choosing a high deductible, but find when their car is damaged that they cannot come up with the money to pay the deductible, so the insurance coverage does them no good
  • Comprehensive coverage pays for the repair of damage to your car caused by other than a collision; for example, by theft or vandalism.

If your car is newer or valuable, you may wish to protect it by having Collision and Comprehensive coverage. (If your car is worth very little, it may not be worth insuring with this kind of coverage). If your car is financed, your finance contract probably requires that you have both Collision and Comprehensive coverage.

If you would like us to evaluate your accident claim, please complete and submit a Case Evaluation Form.