California law requires all drivers and vehicle owners to carry liability insurance, but it does not require you to have enough liability insurance to truly protect you in the event of a serious accident. The state mandated minimum coverage is just 15/30/5 which means $15,000 for bodily injury to a single individual, $30,000 for all individuals hurt in a single accident and $5,000 to cover any property damage you may have caused.
If you own a home, you probably have California homeowners insurance and a portion of your premium goes for liability coverage. Do you know how much liability coverage you have? Do you know how much liability coverage you need?
California Tort Law Holds You Personally Liable
Any claims beyond the limits of your insurance coverage may result in an attempt to claim the difference by the injured party. To protect yourself from being personally liable, you should carry enough liability insurance.
What is the Right Amount of Liability Insurance?
The right amount of liability insurance you should carry depends largely on your net worth and how averse you are to risk. If you have a million dollar house and other substantial assets, you would probably carry enough liability coverage so those assets are not put at risk in the event that you are found liable for injury or damage to another party.
What Happens if I Get Sued?
If you are involved in an automobile accident and found to be at fault, your insurance will protect you up to the limits of your policy. Your insurance company will also assist you in the event that the damaged party decides to sue you. Legal defense in any type of liability case can be very expensive. Insurance can cover those costs. Even if you are completely innocent, you may still need to hire an attorney and spend thousands in fees just to clear your name. No matter how careful you are, you should always carry adequate liability insurance – just in case.