Auto Insurance Coverages - A Guide from BG+W for California Drivers

By Angela Rossi, Esq.

Every California Driver is required to have automobile insurance. However, auto insurance policies and coverages may differ. Thus, it is important that you check your policy to learn the details of each coverage and to determine which coverages you do or do not possess and need. This article shall discuss the basic types of coverage available and the areas each protects.

The coverage summarized below provides only an overview of available coverages and the common definitions thereof. You must consult your own policy and insurance agent for specific information, coverages and exclusions.

9 Things You Need to Know About Your Auto Insurance Coverage

1. Bodily Injury Liability:

Protects you if your auto accident causes bodily injury to others up to the limits shown on the auto insurance policy. It will pay for the other person’s physical/emotional damages, medical bills, and lost wages, as well as provide you with a defense lawyer if you are sued.

You cause an accident injuring 4 people. Your policy limit is 30/60 (which means a maximum payment of $30,000 per person and $60,000 for the entire accident). If the value of the claims made against you are $10,000, $20,000, $30,000, and $40,000, your carrier can not pay any individual more than $30,000 nor more than a total of $60,000 for all four claims. You are responsible for the remainder. However, if sued, your attorney and the defense costs are all paid by the insurance company.

2. Property Damage Liability:

Protects you if your auto accident causes damage to the property of others up to the limits shown on the policy and provides you with a defense lawyer if you are sued.

Under the above scenario, the other vehicle is valued at $28,000 and you have $15,000 in PD coverage. The insurer will pay only $15,000 and you are responsible for the rest. If sued, your defense is paid for by the insurer.

3. Uninsured Motorist:

Pays you and other insureds, including occupants of your vehicle, for bodily injury (physical and emotional distress, medical bills, lost wages, etc.) caused by the negligence of an uninsured motorist or hit-and-run driver. You file the claim with your insurer, who stands in the shoes of the uninsured motorist.

A driver without any insurance rear-ends you. You are injured (value of claim: $23,500). You file a claim with your insurer by proving the other driver was uninsured. As your UM limit is $30,000, you recover the entire $23,500. If you claim the value was $50,000, you collect only $30,000.

4. Underinsured Motorist:

Pays you if your damages are greater than the negligent driver’s “bodily injury liability” auto insurance coverage. The benefits do not apply until you have obtained payment of the negligent driver’s maximum bodily injury coverage. At that time, you file the claim with your insurer, who stands in the shoes of the underinsured motorist, but your insurer maximum payment responsibility is limited to the difference between the amount already paid by the other driver’s policy and the limits of your underinsured motorist coverage.

Negligent Driver (“ND”) hits your car and you are hospitalized. ND has $15,000 of bodily injury coverage, but your claim has a total value of $50,000. After ND insurer pays its $15,000 policy limits, you file a claim on your underinsured motorist (UIM) coverage. If your UIM limit is $25,000, your carrier will pay you $10,000. If your limit is $50,000, you should receive $35,000 from your insurance company. However, if your coverage limit is $100,000, you still receive $35,000.

5. Medical Payment:

“Med pay” covers the reasonable expenses incurred for necessary medical and funeral expenses caused by a motor vehicle accident up to the auto insurance coverage limit and without regard to fault. All participants in the accident–i.e., you, passengers, and the other driver– may make such a claim, even if negligent.

You (and your passenger) collide with another car, but fault is disputed by the parties. Your auto insurance policy has full coverage health insurance, but your passenger’s does not. You each sustain $1,000 in bills ($500 for one office visit and $50 per treatment at 10 sessions). Your passenger would recover $750 as only $250 is allowed for a reasonable office visit expense.

6. Collision:

Pays you for the cost of repairing the accidental damage to your vehicle caused by colliding with another vehicle or object, regardless of fault, minus a reduction for your deductible. If your vehicle is a total loss, you receive the current market value of the vehicle less the deductible. Your insurer, after payment to you, may pursue the negligent driver to recover its cost and your deductible.

A negligent driver (“ND”) hits your car, causing a total loss. The current market value of the car is $5,000. You receive $4,500 if you have a $500 deductible. You may file a claim or pursue litigation against ND for your $500 lost deductible. If you are at fault, the same analysis applies, except the ability to recover your deductible vanishes.

7. Comprehensive:

Pays you for accidental damage to your vehicle caused by something other than collision, minus your deductible. Perils, such as fire and theft, as well as broken glass and damage resulting from contact with an animal or falling objects, are all covered. If your vehicle is a total loss, you receive the current market value of the vehicle less the deductible.

Your window is broken and the stereo is stolen. Your deductible is $100. The cost to repair the window and replace an identical stereo is $700. Your insurer pays $600.

8. Towing and Labor:

This coverage pays reasonable costs incurred for up to one hour of mechanical labor at the place of breakdown or towing to the nearest qualified repair shop if the vehicle does not run or is stalled on or immediately next to a public road.

9. Rental Reimbursement:

If your vehicle is unavailable due to a covered collision or comprehensive claim, you receive partial compensation for a replacement rental vehicle. The amounts covered per day and the length of coverage vary.

Final Takeaways on Understanding Your Auto Insurance

If you are ever in an accident, you should immediately review your auto insurance policy to determine which coverages are applicable for your losses so that expedited claims and recovery can occur. Also, consult an attorney after any accident to review your rights, remedies, and coverages, regardless of fault. A qualified insurance attorney can assist you in submitting any of the above claims, including pursuing the claims after submission if you are unsatisfied with the claims handling procedure or the offers to compromise made by the insurance adjuster.

Angela Rossi About the Author

Angela Rossi, Esq. is an experienced attorney who has over three decades of solid expertise practicing law. She is an accomplished litigator both in and out of the courtroom, with experience that includes countless trials and binding arbitrations. Her law practice includes product liability, premises liability, security guard law, construction defect, trucking company defense, and personal injury. In her construction defect practice, Ms. Rossi is highly skilled in defending organizations of all sizes, from small subcontractors to general contractors and large developers. She has also been a volunteer arbitrator through the Los Angeles Superior Court.