The California State Minimum for Auto Insurance Is Inadequate - Here's Why


Everyone wants cheap insurance. I get clients asking all the time for the least amount of coverage allowed by law. The absolute minimum, just basically a piece of paper that says insurance. At our brokerage, we do not sell those kinds of policies. I would be lying if I said I was not tempted to just take the easy sale - but it is not how we operate. 15/30/5 - The California State Minimum for Auto Coverage - is not adequate coverage. For anyone.

Most states - California is one of them - require liability insurance in order to operate a vehicle. Anyone who tries to go uninsured is subject to fines and having their license and registration revoked. As extremely stressful and unpleasant as this sounds, people still try to get by without auto insurance.

Going underinsured, and buying a cheap insurance policy that meets the minimum coverage limits required by the state of California is always going to be a much better choice than going fully uninsured. However, going underinsured is still not a great idea - your family and your assets are not fully protected. This means every time you get behind the wheel with 15/30/5 coverage, you are putting your future, and your family’s future on the line.

15/30/5 sounds like boring technical jargon to most people outside of the industry. Every state has different requirements for Auto Liability Insurance - In the state of California, the minimum is what is referred to as 15/30/5. Drivers must carry liability insurance for $15,000 for bodily injury/ liability/death to one person, $30,000 maximum for all injuries in one accident, and $5,000 for property damage liability maximum for one accident.

Your insurance company will only pay up to these limits if you are found to be liable in an accident, which means you would be responsible for any costs over and above these limits. Hospitals are not cheap. If you cause even a minor accident, it would be easy to go far beyond these limits. Accidentally hit a BMW and the driver and passenger end up in the hospital? Think of how much it costs to repair/replace that BMW, and how much an ER visit and subsequent health care will run. Guess who is getting their wages garnished for up to 10 years to pay all of those hospital bills and auto repairs above and beyond $30,000? You. You are on the hook for all of it after your insurance pays out. One accident with 15/30/5 coverage puts your entire future at risk. We refuse to put clients in that position, and always recommend 100/300 coverage. It may cost a little bit more, but it is a small price to pay for actual coverage to protect you and your family’s future.


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