How Much Limited-Liability Car Insurance Do You Need in California?
As of April 2010, California drivers paid the fifth-highest annual car insurance premiums in the country, or $2,510.87 per vehicle, according to Insure.com. With drivers paying approximately $1,100 more per year than the national average, many have turned to minimum coverage, which in California is limited liability insurance.
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Limited-Liability Coverage
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California drivers must purchase an auto insurance policy with the state's minimum liability limits, which provide coverage if your vehicle injures another driver or passenger, or causes damage to any other cars or property on the road. Liability does not cover you, your passengers or your own vehicle, but this will be covered by the other driver's plan if he is insured. If the other driver is not insured, you may sue for damages under California's tort law, which was put into place to help drivers seek damages when the other party's vehicle was not insured with the state's minimum liability limits.
Minimum Requirements
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A 15/30/5 minimum liability coverage plan is required of all California drivers, which covers $15,000 in damages if you injure one person; $30,000 if multiple persons are injured; and $5,000 if you damage another vehicle or property on the road.
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Alternatives to Insurance
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If you do not want to purchase a limited-liability coverage plan from an auto insurance company, the state of California's Department of Motor Vehicles provides other options. You can prove your financial responsibility with a $35,000 cash deposit with the DMV, a DMV self-insured certificate or a $35,000 surety bond from a California-authorized bonding company.
Drivers on Your Policy
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You do not need to place every member in your household or family on your auto insurance policy, as this may cause your premiums to rise if a high-risk driver is added. However, if the excluded driver uses the vehicle, your limited-liability coverage policy will be inactive while he operates the vehicle.
Considerations
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According to the website AutoInsurance.org, some insurers may require more than limited liability coverage, particularly if your vehicle is financed. When shopping around for a new auto insurance policy or considering a switch to another insurer, ask about the company's coverage requirements before locking into your new rate.
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