Question: I know I have to have insurance in California. How much insurance do I have to have?
Answer: How much you have to have and how much you should have are two different questions. Let’s start with the first one. In California, you are only required to carry liability insurance. Some people call this PD/PL. It pays the other person if you are involved in a crash and damage their car or property. In California, the stated minimum is $15,000 per person, $30,000 per accident with $5,000 in property damage.
However, and you knew there had to be a however, if you qualify for the low cost auto insurance program, the minimum is $10,000 per person, $20,000 per accident and $3,000 in property damage. These numbers are bare minimum numbers and have not kept up with inflation. For most people, this is NOT enough insurance.
As I write in my free book, Consumer’s Guide to Buying Car Insurance, you should buy significantly more insurance. If you cannot afford to go out and buy a new car, you should have comprehensive and collision in case your car is totalled in a crash or if your car is stolen. Most people should also carry uninsured motorist coverage.
In California, uninsured motorist coverage provides you with protection if you are hit by a driver who is either not insured or has liability limits less than your limits. (This is technically called underinsured motorist coverage, but they are sold together.) Your uninsured motorist limits are equal to or less than your liability limits. So, if your liability limits are $15,000 per person, $30,000 per accident, you cannot have uninsured motorist limits higher than that.
Since uninsured motorist coverage protects you, it makes sense to carry as much as you can afford. Thus, you should increase your liability limits to whatever limits you want for uninsured motorist coverage.
This is a complicated topic. Many insurance agents do not fully understand it or appreciate its importance. I offer a free insurance review for anyone who emails me and asks for it. Just send me your declarations page. And, of course, you can ask for your free copy of the Consumers Guide to Buying Car Insurance.