Guide to California Auto Insurance

California law specifically requires any automobile being driven must have auto insurance, however how much is enough? Minimum requirements for California are $15,000 for individual bodily injury, $30,000 bodily injury total for both you and your passengers and $10,000 of property damage. This is called Liability insurance. However is $30,000 enough to cover all of your medical expenses?

Let’s say that in a rush to get to work you ran a red light and plowed into another car. You hit him right in his door making him spin out and into a stoplight. You blacked-out from the force of the airbag deploying. The police are called and ambulances are on their way.

After both of you are rushed to the hospital you have a concussion from hitting your head while the other driver suffered a broken neck and arm of which will require surgery. After your recuperation and filing a claim with your insurance company, you come to find out that the other driver has no medical insurance and has filed a lawsuit against both you and your insurance company for loss of wages, medical bills and damage to his car, which has been totaled out. The total amount he is suing for is $250,000.

You pull your policy and realize that your coverage only covers you up to $100,000 for this accident. If he wins how are you going to come up with the other $150,000? Are you going to sell your home, cash out every retirement fund you have and sell off everything you own? What about your wife and children?

So really, how much coverage is enough? In my opinion, you should be covered for a minimum of two to three times your salary and assets. If you make $60,000 per year and have assets of $50,000, your total coverage should be no less than $175,000. This will ensure that you have the best coverage possible should the absolute worst happen.

So perhaps now is the time to pull out your insurance policy and start shopping it around. There are a number of websites that can give you a free, over-the-net quote from multiple insurers in a matter of minutes. The more you shop around the better chances you have of increasing your coverage and saving you money, and that could be the difference of being able to retire or financial bankruptcy.