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Will California’s Future Include Increased Compensation for Car Accident Victims?

Posted by Inna Gorin | Sep 20, 2022

In California, vehicle owners must have auto liability insurance. If a driver were to get into an accident, this insurance is meant to cover the other party's car repairs, medical bills, and any other costs they may face. The minimum liability coverage allowed in California is termed “15/30/5” – the insurance will pay the other party:

  • $15,000 for death or bodily injury,
  • A total amount of $30,000 for the death or bodily injury of everyone hurt in the accident, and
  • $5,000 for property damage, which includes the other party's vehicle and stationary objects that were also damaged.

It is important to remember that this is the minimum amount of car insurance California will allow, but additional coverage, while optional and more expensive, offers greater protection. 

California's Comparative Negligence Law

California is one of many states that employ a comparative negligence law. Essentially, it means that both drivers may share the fault for the accident. After the insurance claims are made, insurance providers will determine the percentage that each driver is at fault for the accident. The drivers will then be responsible for paying that amount. For example, if Driver A rear-ended Driver B, but Driver B had been stopped at a green light, Driver A could be 70% at fault for the accident, while Driver B was 30%. Driver A's insurance would pay Driver B 70% of the damages, and Driver B's insurance would pay Driver A 30%.

If you have greater liability insurance, your percentage of the damages will be paid out of your policy. But if your insurance does not cover enough of the damages, you will have to pay those fees from your own pocket. Therefore, it is important to have as much liability insurance as you can afford. 

Coverage Add-Ons

California also allows vehicle owners to add supplemental coverage to their policies to protect themselves further. The most popular supplemental coverages have been listed below, though this list is not exhaustive.

Medical Payment Coverage

Medical payment coverage, or “Med Pay,” covers medical bills and funeral expenses for the policyholder and their passengers. Policyholders and their families can also claim payments under this supplemental coverage if they are a pedestrian hit by a vehicle, injured while in someone else's car, or insured on public transportation. 

Uninsured Motorist Coverage/Underinsured Motorist (UMC/UIM) Coverage

UMC/UIM coverage pays for the policyholder and their passengers' injuries because of an accident caused by another driver. This type of supplemental coverage applies when the driver at-fault has no liability insurance or their coverage is too low to pay the injured individual's bills. 

UMC/UIM coverage does not pay for damage to the driver's vehicle or other property damage. Additionally, it must match the policy holder's liability coverage or 30/60 coverage, whichever is less. That means if a driver has the minimum 15/30/5 coverage, their UMC/UIM coverage must, at the very least, be 15/30/5 as well. 

Collision and Comprehensive Coverage

In California, collision and comprehensive coverage tend to be offered together. Collision insurance will pay for damage to your vehicle if it hits something else while moving, and comprehensive insurance will pay for damage to your vehicle that is caused by something other than a collision that is outside of your control. For example, if your car is broken into, there was a fire, or a flood, comprehensive insurance would pay for the damages.

California Car Insurance Rate Increases

The California Department of Insurance has been denying requests from insurance companies to increase their rates since the beginning of 2022. In fact, Californians have been enjoying a rate freeze since 2020. But now that rates are going up across the country, as are the costs for auto insurers, it is likely that official rate increases are just on the horizon.

There are several reasons why auto insurance could increase in California, including:

  • Wildfires have significantly increased in California over the last few years, which has, in turn, increased the number of wildfire-related claims. This creates losses that the insurance company needs to recover by raising rates for vehicle owners.
  • Inflation impacts operating costs for insurance companies, which are passed on to you at your next policy renewal.
  • Supply chain disruptions have affected the number of new cars being built and increased the value of used cars. This increase in value means that if your used car is stolen or totaled, insurance companies must pay out the inflated value. 

If insurance rates increase, it will also mean higher payouts for car accident victims. To ensure you are not paying these higher costs out of pocket, getting the highest liability insurance protection you can afford is important.

About the Author

Inna Gorin

Inna Gorin, the founding Partner of Injury Justice Law Firm modeled the Firm after her ideals and principles of what skilled, aggressive and tenacious representation of individual clients should embody. Ms. Gorin's mission is to level the playing field, and provide her clients with the same level...


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