Information regarding California Automobile Insurance

Knowledge is everything. The information below will help you to understand automobile and vehicle insurance. Insurance protects you from potential losses that could financially ruin you without it. For help call us at 800-816-1529.

• If you have already been involved in a car or other motor vehicle accident in the state of California, you should immediately stop reading and call our law firm at (800) 816-1529 Ext. 1 for a free telephone consultation. We will let you know over the phone if we believe you have a case and if we can assist you.
• If we believe we can be of assistance to you and you decide to retain our services, we will send you the documents necessary to retain our law firm by email.
• If you do not have health insurance or a primary care physician, we can immediately refer you to a qualified doctor in your area for medical care.
• Yes, all of this can be accomplished with a single phone call to our law firm. (Yes, even if you do not have medical insurance.) We make every effort to simplify the process for you.

MINIMUM INSURANCE REQUIREMENTS IN CALIFORNIA

While operating a motor vehicle on California roads, you are required by law (Proposition 213) to carry minimum liability insurance coverage of ,000 for property damage, ,000 for bodily injury per person, and ,000 per incident.

If you do not have minimum liability insurance coverage, you will NOT BE ENTITLED TO GENERAL DAMAGES (pain and suffering, emotional distress, loss of enjoyment of life, etc.) and you risk losing your driver’s license and paying a fine. Even if you were not at fault for the accident!

The majority of personal injury attorneys will not represent you on a contingency fee basis unless you had liability insurance at the time of the accident, as the value of your case is limited to out-of-pocket losses such as Property Damage, Medical Expenses, Medication Expenses, Lost Wages, etc. The Law Offices of Norman Gregory Fernandez & Associates takes cases for drivers who were uninsured and not at fault in a vehicle accident. For more information call 800-816-1529.

TYPES OF INSURANCE PROTECTION

When it comes to purchasing automobile, motorcycle, and other motor vehicle insurance, there are numerous options. As the proverb goes, you typically get what you pay for. This section is not intended to be a guide to auto insurance or other forms of motor vehicle coverage. However, we will discuss the various types of auto insurance coverage in a general sense. 

Liability Insurance Protection

As stated previously, this coverage is mandated by law. This insurance will cover any damages you may have caused to others or passengers in your vehicle, up to the coverage limit, in the event of an accident for which you are at fault.

Some policies cover any vehicle you drive, including rental cars, while others only cover a specific vehicle.

Check with your insurance provider about any restrictions on your coverage, and read your policy to confirm what you are told.

Due to the exorbitant cost of automobiles and medical care in the modern era, we advise that you purchase the maximum amount of liability insurance coverage possible.

A simple automobile collision may cause $20,000 in property damage and $30,000 in medical expenses. If you carry only the minimum insurance coverage required by law, you may be responsible for the remainder of any damages you cause.

Even if the accident is your fault, some liability policies prohibit members of your household or immediate family from “suing” you or recovering from your liability policy.

Again, we recommend that you contact your insurance provider. You must ensure that your coverage extends to family members and passengers who may be injured in an auto accident.

Comprehensive and Collision (Comp/Coll) Coverage

This type of coverage will cover up to the “Fair Market Value” of your vehicle in the event of an accident for which you are at fault.

It will also cover theft up to the vehicle’s Fair Market Value.

Even if the accident was not your fault, the majority of Comprehensive and Collision insurance policies cover vehicle damage. Check with your insurance provider, as stated previously.

If the cost of repairing your vehicle exceeds its Fair Market Value, the insurance company will consider your vehicle a “total loss” and will only pay you the Fair Market Value.

What then is the Fair Market Value? FMV is the amount that your vehicle is actually worth on the open market. Many individuals are confused about this issue. You may have paid $35,000.00 for your car and owe $30,000.00 on it, but as soon as you drive the car or vehicle off the dealer’s lot, its value automatically decreases. Although you may have paid or owe the above amounts for your vehicle, the Fair Market Value of your vehicle may only be $15,000!

Insurance companies determine the value of your vehicle based on a variety of factors, including, but not limited to, the following: Year, Make, Model, Mileage, Condition, what similar or identical vehicles are selling for in your area, etc.

When a car is totaled or its repair costs exceed its Fair Market Value, policyholders frequently discover the hard way that the amount they receive from their insurance company falls far short of the amount still owed on the vehicle.

This is a common occurrence in today’s market, where the average price of a new car is $30,000, and when the cost of repairing simple bumper damage can exceed $5,000. We always recommend purchasing Comprehensive and Collision Insurance. Without this coverage, you will receive nothing for property damage if the accident is your fault, and you will be at the mercy of the other driver’s insurance company if you are not at fault. Consult your insurance provider and review your policy for any coverage restrictions.

GAP Insurance Protection

This type of insurance covers the difference between the Fair Market Value of your vehicle, as discussed in the section on Comprehensive and Collision, and the amount still owed on the vehicle.

When you purchase a new or used vehicle on credit from a dealer, you are frequently required to purchase not only Comprehensive and Collision insurance, but also GAP insurance, so that the finance company knows it will be paid in full if the vehicle is totaled.

If you owe money to a third party for a car, regardless of whether it is required or not, we always recommend purchasing GAP Insurance coverage.

As previously discussed in the Section on Comprehensive and Collision Coverage, you do not want to be stuck paying thousands of dollars on a car loan after an accident if your car has been declared a total loss.

We cannot count the number of times accident victims learn the hard way that their insurance company will not pay enough on a property damage claim to cover the outstanding balance on their vehicle.

Nobody wants to be stuck paying thousands of dollars for a vehicle they no longer own. If you still owe money on your vehicle, you should obtain GAP insurance.

Underinsured Coverage

This type of insurance will cover the difference between your actual damages and the negligent party’s insurance payout.

In other words, suppose you are hit by a person with minimum insurance coverage (10k/15k/30k) who is also at fault for the collision. Under normal circumstances, you will be able to recover no more than $15,000.00 from their insurance company for your bodily injuries, out-of-pocket expenses, etc.

Say your actual medical expenses and out-of-pocket loss total $100,000. What are your intentions? If the person who hit you does not have insurance or sufficient assets to compensate you for your losses, what happens? It is unlikely that you will ever collect the $95,000.00 difference from them even if you obtain a judgment.

If you do obtain a judgment, they may declare bankruptcy and receive a complete discharge of the debt owed to you.

In many cases, the at-fault party’s coverage is insufficient to cover our clients’ actual damages, leaving them in the catch-22 situation described above.

We believe that it is better to err on the side of caution at all times. We always recommend purchasing Underinsured Motorist Coverage for at least $100,000. More is always better. This is your method of protecting yourself against an at-fault party’s inadequate coverage.

Most Uninsured Motorist insurance policies in California also include under insured coverage. Check with your insurance provider to ensure coverage.

Uninsured Motorist Bodily Injury Coverage (UM/BI)

The name is self-explanatory. This type of insurance will cover your “non-property” damages if the “at-fault” driver lacks liability coverage.

Due to the large number of people driving without insurance in California, especially since the economic downturn, we believe that this type of coverage should be mandatory.

This policy also covers hit-and-runs. We recommend purchasing as much UM/BI coverage as you can afford, but no less than $100,000.

In many cases, if you are involved in an accident with an uninsured driver, this coverage will be your only option for recovering your losses.

Do not operate a motor vehicle in California without UM/BI coverage.

Uninsured Motorist Property Damage Coverage (UM/PD)

This is the same as the UM/BI discussed above, except that this insurance will cover the Property Damage to your vehicle if you are hit by a negligent or hit-and-run driver.

Some Comp/Collision insurance policies will cover you if your vehicle is damaged or totaled by an uninsured driver who is at fault, but others will not!

Always err on the side of caution and purchase insurance to protect yourself in this situation.

We have witnessed numerous accident victims lose their vehicles due to the fault of a hit-and-run driver or an uninsured driver, leaving them without a vehicle and saddled with enormous vehicle payments because they lacked the proper insurance.

We always recommend insuring your body and property against uninsured motorists and drivers who flee the scene of an accident.

Similar to Comprehensive and Collision, this coverage will cover your vehicle up to its actual cash value.

Even if you have paid or owe $30,000.00 on your vehicle and purchase a $30,000.00 UM/PD policy, you will only be covered for the Fair Market Value of your vehicle.

Rental Car Insurance

This type of coverage will pay you a specified amount per day to rent a vehicle in the event of an accident.

Check with your insurance provider to ensure that you will be covered whether you or the other driver is at fault.

Occasionally, insurance companies require that you pay for the rental car out of pocket and then submit receipts for reimbursement.

Typically, this type of coverage only pays $20.00 to $30.00 per day, up to a maximum of one dollar, or for a maximum of thirty days.

In many instances, the cost of renting a vehicle and insuring it against loss will exceed the limits of your rental car insurance policy. However, we always recommend purchasing rental car insurance coverage.

We cannot count the number of times clients who were not at fault in an accident have lost their only mode of transportation and are unable to get around.

If the at-fault driver’s insurance does not immediately cover your rental car expenses, you will be responsible for the entire cost of the rental car until your vehicle is repaired or you acquire a replacement vehicle.

We recognize this is unfair. This is why we always suggest purchasing rental car insurance.

Medical Insurance Coverage (Med Pay)

This type of insurance covers your medical expenses if you are involved in an accident involving a car, motorcycle, truck, or other motor vehicle.

Numerous individuals already have Standard Medical or Health Insurance.

Nevertheless, medical insurance typically does not cover chiropractors, or there are co-payments, deductibles, and/or medication costs that are not covered.

It is essential to obtain as much Med Pay coverage as possible.

Typically, when you are injured in a motor vehicle accident, your insurance company will pay you first with Med Pay. Typically, they will pay this amount without question when presented with medical bills. We recommend purchasing this protection.

Insurance Deductibles

Most Comprehensive/Collision and Uninsured Motorist coverages have deductibles, meaning that you are responsible for the first $500, $1,000, or $2,000 in damages before your insurance kicks in to cover the rest. You can even pay for insurance coverage with no deductible.

Typically, a body shop will not release your vehicle until the deductible has been paid.

Let’s assume you have Comp/Collision coverage and are involved in a minor collision that results in 0.00 in property damage and a ,000.00 deductible.

Your insurance company will accept the claim, but since you have a $1,000 deductible, you will receive no payment because you are responsible for the first $1,000.

Deductibles are a matter of personal choice. Typically, your premiums will be lower if you have a higher deductible, but you will also have to pay a higher price or receive a lower settlement.

If you can afford it, we advise purchasing a policy with a low deductible.

After an accident, we have seen clients with high deductibles lose their jobs. They were unable to retrieve their vehicles from the auto body shop until the deductible was paid.

You get the idea; the entire purpose of insurance is to protect you against loss. When you have a job and money, it may be preferable to pay a bit more for a lower deductible than to risk not being able to cover the deductible during difficult times.

Managing your temporary loss of income Other Disability Insurance Plans and State Disability Insurance

If you are injured in a car, motorcycle, truck, or other motor vehicle accident, you will likely miss a significant amount of work.

Personal Injury cases are not resolved immediately, particularly if litigation is required.

Cases can occasionally take one to two years or longer to resolve.

California State Disability Insurance (SDI)

If your doctor has placed you on inactive status, we strongly advise you to apply for California State Disability Insurance (SDI). SDI will not cover the entirety of your lost wages, but it is preferable to receiving nothing if you are unable to work.

After two weeks of being disabled, you are eligible to apply for SSDI, and your doctor will need to complete the necessary forms for the State.

Additionally, you may be entitled to sick pay and/or vacation pay from your employer.

We recommend contacting your employer, if possible, to provide them with your doctor’s off-work order and to request your accrued vacation pay and sick pay to provide you with money in the interim while you wait for Social Security Disability Insurance to begin paying.

There are numerous options for private insurance that will cover your entire salary if you become disabled. We strongly advise purchasing insurance against becoming disabled due to automobile accidents and illness.

If your employer terminates you because you are unable to work and you are not eligible for Social Security Disability Insurance, you may be able to recover unemployment insurance benefits from the state; however, these benefits are typically lower than SDI.

While you wait for your case to be prosecuted, do whatever you can to generate income, or you can return to work.

Unemployment Insurance

If you were employed and, in an accident, and lost your job for some reason. California unemployment insurance may be able to help if you cannot obtain California Disability Insurance.

Unemployment will provide income, which is lower than your normal pay, but it is income nonetheless every two weeks, until you are able to get a new job.

Usually, you can qualify for unemployment so long as you were employed previously, and you were not terminated for cause.

You have nothing to lose if you do lose your job and you do not qualify for disability insurance to try for Unemployment compensation from the State of California. Simply go online and make an application for unemployment here. 

Get Help Now

The Law offices of Norman Gregory Fernandez & Associates has almost 3 decades of experience handling personal injury cases all over the state of California. We have handled thousands of cases and obtained millions of dollars in settlements and judgments for our clients. Call now for a no pressure free consultation with an actual attorney. 800-816-1529 extension 1. 

You can download our California Accident App for iOS and Android by clicking here and visiting our California Accident App page. This application will allow you to record and transmit all information related to your Injury accident case to our office.