Types of California Liability Insurance

There are two basic types of liability insurance that you may be required to purchase if you reside or drive in California. There are other specific types of liability insurance for business owners, landlords and other special situations, but the remainder of this article will focus on liability insurance for California homeowners and drivers. Liability insurance covers claims that are based on bodily injury or damage to property.

Liability Insurance for Bodily Injury Claims

In regard to California auto insurance, the law requires all drivers and vehicle owners to carry a minimum amount of bodily injury insurance to cover any physical injury they may cause in a motor vehicle accident. The minimum amounts required by the state are $15,000 for any injuries to one person and $30,000 for all parties that may have been injured in an accident. These are only minimum amounts and most drivers should consider higher limits to be more adequately protected.

California homeowners insurance is not mandated by the state, but any prudent homeowner should have liability insurance as part of their total homeowners insurance policy. Such coverage can protect you from claims and lawsuits by people who are injured while on your property.

Liability Insurance for Damage to Property

Car accidents can cause a lot of damage, and the state requires a minimum of $5,000 in insurance coverage for required repairs if you were the responsible party that caused the accident. Just like the liability coverage for bodily injury is artificially low, so, too, is the case with property damage.

Homeowners are not required to carry liability insurance, but in order to protect themselves from being exposed to a large, uncovered risk, it is wise for all homeowners to carry some liability insurance.

Things You Don’t know about Liability Insurance that can Cost You

On the surface, liability-only insurance sounds great to a driver who wants to save money. It provides the legal minimum state-required coverage at an affordable price. Unfortunately, those financial savings may not offset the ultimate cost that a liability-only policy may impose on an underinsured driver.

Liability insurance is auto insurance that covers a limited amount of bodily and property damage that you are at fault for while operating your vehicle. For example, if you experience a collision with another vehicle due to your own negligence while driving, liability insurance pays for a portion of the other driver’s losses, such as vehicle repairs and medical bills. It does not, however, pay for repairs to your own vehicle or medical expenses that you incur due to the collision. This could leave you with a significant bill, and in some cases, without transportation altogether.

Carrying the minimum amount of auto insurance can cost you even more than your own repairs and medical bills too. If your coverage maximums don’t cover all of the expenses that another driver incurs due to a collision, you could face a lawsuit. In most U.S. states, you are ultimately responsible for the bodily and property damages you cause while driving, so a judge could force you to liquidate some of your cash and assets in order to pay for the damages your insurance does not cover.

It’s always a good idea to be prepared. Rather than skimp on your auto insurance coverage to save money, try achieving an affordable full-coverage premium by maintaining a good driving record, raising your policy deductible and combining your auto and homeowner’s insurance policies with the same insurer. You’ll still save money without risking your financial security every time you get behind the wheel of your car.

Understanding Your State’s Insurance Limits

Insurance coverage, requirements and limits vary from state to state. Depending on where you live, you may only be required to carry liability insurance for your car or basic coverage for your home. Before a disaster strikes, you want to make sure you are fully covered and you can get life back to normal quickly.

For example, Texas automobile insurance limits are 30/60/25. The 30 and 60 refer to bodily injury liability limits and the 25 refers to property damage. So, if you live in Texas, and you have an accident, each person would receive up to $30,000 for bodily injury, but the maximum limit for the accident is $60,000. You would also be covered for $25,000 in property damage. Make sure you have enough coverage so you will not have to pay out-of-pocket after an accident. To purchase more coverage for an affordable price, consider raising your deductible.

When looking at insurance for your single dwelling home or condo, you may be tempted to accept the lowest limits allowed by your state. You may actually feel better if you have additional coverage to make sure you are able to replace your home and your personal property quickly. You may need to replace you expensive laptop computer so you can get back to work. If you don’t have enough insurance coverage, this may be something you have to do without.

Overall, whenever you are looking for insurance coverage, do some research so you can be a well-informed consumer. You do not have to pay a lot of money for insurance if you shop around for a great deal. Go online and get several quotes and also make sure you understand your insurance needs.

What Kind of Coverage Does a High Mileage Car Need?

If you’re driving a high mileage car, you may want to consider what kind of insurance you have and what you’ll need in the future. While high mileage cars may be older and may not be worth as much money, they are certainly valuable as transportation to their owners. Auto insurance for these vehicles should generally include only liability insurance. Liability is a requirement in most states. Other coverage options, such as comprehensive, aren’t usually the best choices for a high mileage car. A claim made against that coverage could easily equal the value of the vehcile. If that occurs, the vehicle is considered "totalled" for insurance purposes, and wil no longer be insurable.

As your auto acquires more mileage, things are more likely to go wrong with it. That’s true no matter what make or model your car is or how carefully you drive and maintain it. Because of that, it’s a much better idea to keep your vehicle insured properly. Another coverage option you most likely don’t need on your high mileage auto is collision coverage. Unless your vehicle is worth a lot of money or you absolutely couldn’t afford to replace it at all, you don’t need to keep collision insurance on it once it becomes a high mileage vehicle.

In addition to liability insurance for your auto, though, you may want to look at mechanical breakdown options as well as towing and rental car reimbursement. If you have those options, you’ll be able to get financial help if your car should break down. While a vehicle of any age can have mechanical problems and need to be towed, it’s statistically more likely for an older car with more miles on it to suffer problems. Insuring against those problems can give you peace of mind.

Will my auto insurance pay for a stolen item out of my car?

Having an item or items stolen from your car can be extremely upsetting and frustrating — and the situation is often made far worse because of worry about whether your auto policy coverage will reimburse you for the damages. It may seem like a given that your car insurance coverage would pay you back for losses of all types, but this is simply not the case — unless you have the proper type of coverage!

The Coverage Types

There are basically three different types of car insurance coverage, and each type has different purposes. Liability insurance is the type that is legally required and is designed for the protection of other drivers on the road in case you were to be the primary cause of an accident. If you were the person who caused an accident to happen, or if you were mainly the person at fault and the other driver contributed to the accident in only a minor way, your liability coverage will reimburse the other driver for any vehicle and personal damages. This type of insurance will not cover your own damages but is purely for the protection of others.

Collision coverage is designed to work along with liability insurance. It fills the gap in cases where you need a vehicle repair or medical help after an accident that you caused. The liability coverage will cover others who were impacted while the collision coverage will handle the damages caused to your own property. This type of insurance isn’t legally required but it is highly advisable since your own vehicle would be largely uncovered for damages otherwise.

Finally, comprehensive coverage is the policy type you need to make sure you can get reimbursed for items stolen from your car. Not only does comprehensive coverage deal with the times that your car is stolen, it also deals with vandalism of your vehicle, as well as break-ins. If you had personal property in your vehicle and you are holding comprehensive coverage, you will normally be able to file a claim to get reimbursed for the value of the items that were taken.

How to Determine if you Need Mexican Auto Insurance Coverage

Your auto insurance policy covers you while you are driving in the United States. Not all policies provided coverage if you cross the border into Mexico. In addition, the coverage that is provided is less than you have for driving in the U.S. You also need to be aware of the requirements for insurance set by the Mexican government.

Liability coverage

While your auto policy may protect you and your vehicle while driving in Mexico, you must have additional liability coverage. If you are found to be at fault, you will be liable for any injuries or property damages. The Mexican government has strict requirements for liability insurance and failure to have adequate protection can result in legal action.

It is also important to note that some portions of the country do not require Mexican drivers to have liability coverage. This means that in the event of an accident, the other driver could be at fault but not have any liability insurance. Without your own coverage, you will not be compensated for damages or injuries.

Limited distances

Your policy may provide you with coverage for a limited amount of travel into Mexico. This protection may only apply for driving a few miles across the U.S. border. If you travel further south, even by only a few miles, you will no longer be covered. This can present a significant risk if you become lost or loose track of how far you have traveled.

Leased and rented vehicles

If you lease your vehicle, you are required to obtain a permit from the lender before traveling into Mexico. The lender will require proof of sufficient Mexican auto insurance. Rental vehicles may offer collision coverage but any liability protection does not extend into Mexico.

You should carefully review your auto insurance policy with your insurance agent before traveling across any country borders. You can face serious financial risks and legal consequences if you do not have the sufficient amount of insurance required. In addition, you should inquire about the availability of legal assistance in the event of an accident.

What Liability Limits Should I Have on my Homeowners Policy?

In addition to providing money to repair or rebuild your home if it is damaged in a covered incident, homeowners insurance also includes liability coverage. This type of insurance pays for claims made against you when someone is hurt while on your property. They may fall down the stairs, get hurt on your trampoline, or get bitten by your dog. The right amount of coverage to purchase depends on several factors.

Consider Risk Factors

You should definitely increase the standard liability limits if your home includes at least one of the major risk factors. In particular, dog bites are behind 1/3 of personal injury liability claims, so you should increase your liability limits from $100,000 to $300,000 if you have a dog, particularly if it is a breed that is known to be aggressive. You also may want to increase your limits if you frequently have people over to your home, particularly if they use a pool, hot tub, trampoline, or other feature that increases risk of personal injury.

Consider Your Net Worth

It’s wise to increase the liability limits on your homeowners policy if you have a high net worth, and therefore a significant amount of assets to protect. Add up your annual salary, equity in your home, the value of your other assets, and your investments. If these total more than $300,000, you may want to go up to the maximum liability coverage allowed on your homeowners insurance policy. This is because you have more at risk to lose, so you want the insurance company to pay out more in a claim before you are personally liable to cover the rest.

Consider Umbrella Coverage

If your assets are worth more than, say, half a million dollars, then it is probably wise for you to add umbrella coverage. This is a type of liability insurance that kicks in once the liability coverage on your homeowners or auto insurance policy has been exhausted. You can usually purchase one million dollars of coverage for just a few hundred dollars per year, and this provides additional peace of mind for you.

How Are You Covered Under Minimum Auto Liability Insurance?

Under minimum auto liability insurance, a requirement of all states, individuals have very little protection. Under most state laws, drivers must carry a specific amount of auto liability insurance. This insurance provides protection to other drivers who you may be involved in an accident with. It provides you, as the driver, with protection from the financial hardships of trying to pay for this type of damage on your own. However, there are numerous limitations to know about.

What Is Covered?

The first thing to know about liability insurance for your auto is that it provides coverage for damages you cause or are otherwise responsible for after an incident. It may cover damage to another vehicle or the property of another person. If you run over someone’s mailbox, the repairs to the mailbox are covered. If you are in a car accident with another vehicle, the costs related to the repairs for that vehicle are covered.

What’s Not Covered?

Most of the time, these insurance products do not provide you with a large amount of coverage in terms of your own property. For example, the damage to your vehicle form hitting another car or running over the mailbox are not included. This also means any damage to your health is not included. These you will need to pay for yourself unless you have additional policy protection.

How Much Is Covered

It is also important to realize that under minimum auto liability insurance, the insurance company covers damages up to the amount of coverage you have. If you hit a $50,000 car and ruin it but your policy is only for $30,000, you are personally, financially responsible for that other $20,000 worth of damage. For this reason, it is a good idea to have more than the minimal amount of insurance. You likely need to have more than what your state requires as minimum.

Are you sure the insurance coverage you have is enough? In many cases, it will not be unless you take the time to talk to your agent about your specific needs. Having enough insurance is critical. It is also necessary to have the right provider for your policy needs. Do not overlook the importance of this type of insurance. It keeps you legally able to operate a vehicle, but it also gives you financial protection from many "what if" situations that could occur.

Is Hazard Insurance Covered under Homeowners Insurance?

Hazard insurance is part of your home owners insurance policy. This is the portion of your plan that will take care of fire or other hazards in the event of disaster. The other portion of the plan is liability insurance. This will take care of medical expenses if someone is injured while visiting your home. It is important to have both hazard and liability insurance coverage. If your home is destroyed, you want to repair or replace it as quickly as possible.

Although you do not want to think about your home being devastated by a fire, flood or other disaster, if it does happen, your hazard insurance will cover the expense of either repairing the damage or even rebuilding your home. Homeowners insurance may not be required by law, but if you have a mortgage on your home, your lender will probably require this type of protection. Since hazards vary from state to state, you will want to look at the policy and make sure you are covered for all types of disasters that are common for you area. Some areas may require special hazard coverage for flooding or hurricanes. Make sure when you compare quotes, you understand the type of protection you need.

When speaking with an agent, you can ask "Is hazard insurance covered under my homeowners insurance policy?" This will help you determine the type of plan you need and still find a policy you can afford. The best way to make sure you have a great plan is to compare rates. Do not just choose the first quote you find, when you compare both price and coverage, you might be able to get a better deal. Knowing you have top of the line insurance coverage will ensure peace of mind.

Why Liability Insurance is Required in Most States

Chances are, if you live in the U.S., you are required by your state’s laws to purchase minimum car insurance protection in order to own or operate a motor vehicle. In most states, minimum insurance laws require that drivers only purchase liability coverage, rather than a more comprehensive policy. There are several reasons why minimum liability insurance is required.

Protecting Other Drivers

Liability insurance is required to protect other drivers from any bodily injury or property damage losses that you cause. In most states, you are legally responsible for the harm and loss that you cause another person, and auto insurance helps guarantee that victims have access to the medical treatments, auto repairs and property replacement they deserve following an accident.

Protecting You

Minimum liability insurance not only protects victims of an accident you cause, but it also protects you. Regardless of whether you have auto insurance, you can still be held legally responsible for the losses you cause another person. If you do not have insurance, a victim may sue you directly, which could result in a liquidation or seizure of your personal assets if you do not have the cash to pay a judgment out of pocket.

Considerations

It is never a good idea to drive a vehicle without adequate insurance coverage. Unfortunately, even state minimum coverage may not be enough to protect you in the event of an accident. Talk to your insurer about the cost of increasing your coverage to provide full coverage protection for both yourself and others you are liable for. And as always, be sure to shop and compare premiums to be sure you are getting the most coverage at the most affordable rates. The rates you pay for state minimum coverage at one provider may buy you much more coverage through another.