A PROJECT OF THE County of San Diego Health & Human Services Agency

Car Insurance

California State law requires that both owners and operators of cars be able to demonstrate financial responsibility for any damage or injury caused by auto collision, no matter who is at fault. The most common form of financial responsibility is automobile liability insurance. The state requires minimum amounts of both personal liability and property damage insurance, which must be carried by everyone using the streets and highways of California. The minimum amounts are: $15,000 for death and injury to any person; $30,000 for death or injury to more than one person; $5,000 for property damage. Personal liability (also called bodily injury liability) is that which is payable in the event of a person being injured in a collision your insurance will pay for medial bills and other related costs if you caused this person's injuries. Property damage insurance will pay for damaged cars, buildings, fences, etc. resulting from an accident caused by you.

There are other basic types of insurance that you may also choose to purchase. These types of insurance are not required by state law.

Medical Coverage - Pays for medial services and/or funeral expenses for anyone riding in the insured car. This coverage makes immediate payments without bothering to establish who was responsible for the accident. If the driver is found to be at fault, it is the insurance company's responsibility to recover the money from the responsible party.

Comprehensive Insurance -  Pays you to fix or replace your car if it is stolen, catches on fire, is broken into or vandalized. This coverage is usually expensive and come with what is called a "deductible". The deductible is the amount you must pay before the insurance company makes any payments. The minimum amount for a deductible is usually $100. The higher the amount of the deductible, the lower the cost of the insurance premium. The money you pay the insurance company for your coverage is called the premium. Premiums can be paid monthly, quarterly (every 4 months) or annually (once a year).

Collision Coverage - Pays for the damage to your vehicle if you caused the accident. This coverage is also expensive and usually comes with a deductible, which works just like the comprehensive coverage. In fact, it is common that insurance companies require you to buy comprehensive coverage before they will sell you collision coverage. You may find that an older car is not worth the cost of covering with either comprehensive or collision coverage.

Uninsured and underinsured motorists bodily injury coverage - uninsured coverage reimburses you and anyone in your vehicle for any bodily injury and medical expense or death from an auto accident caused by: a driver with no insurance; a hit-and-run driver; or a driver of a stolen car. It does not cover property damage.  Underinsured coverage provides bodily injury coverage when the negligent driver has some insurance, but it is insufficient to cover your bills. Underinsured motorist coverage pays the balance -- up to the limit on your policy.

If you buy a new car or a newer used car and borrow money from either the dealer or a bank, you will be required to purchase comprehensive and collision coverage by the lender. This protects the bank or the dealer if the car is damaged in an accident. It also protects you. In the event of an accident, you will still be required to pay back the money you borrowed even if you can no longer drive the car. In fact, you are still responsible for any amount stilled owed over and above what the insurance company may pay for the damaged vehicle.

The amount you pay for auto insurance depends on things like your driving record, your age, where you live and the kind of car you drive. Girls historically have a better driving record than boys, and therefore insurance is slightly cheaper for girls. For students with proof of good grades, many insurance companies offer a discount. Driving carefully also pays off. After you receive a ticket for a moving violation or have an accident, your insurance rates may go up even higher.

When purchasing auto insurance, shop around for the lowest prices. Be sure and compare coverage, premium rates (the amount you pay for the insurance), and deductibles (the amount you are expected to pay before the insurance company pays its part). You can find companies selling auto insurance listed in the yellow pages of the phone book under "Insurance".

Auto insurance is one of life's necessities. If you can't afford to pay for insurance, you can be sure you won't be able to afford the consequences of driving without insurance and getting caught.

Documents You Must Keep in Your Car

The following documents are required to be kept in your car:

  • Current car registration
  • Proof of insurance
  • Operations manual for your car