California law requires every driver to have basic insurance that covers the expenses you may incur if you damage property or injure or kill someone in the case of an accident. The purpose of the law is to make every driver financially responsible for any damages that he or she might cause to others while driving.
This type of coverage is known as “basic California Auto Insurance coverage.” While the idea of such an insurance requirement is well intentioned indeed, it falls short of what the reality of driving in California demands.
Here’s how much basic coverage really covers:
- $15,000 per person in one accident.
- $30,000 for two or more people in one accident.
- $5,000 in damage property.
Here are the problems with this type of insurance.
First of all, it only covers other people. What about you? What if you broke an arm or ended up in the hospital, creating bills for very high amounts that are not covered. And let’s not forget other types of damage that you can get, such as lost salaries and distressed.
Now, imagine that the other driver sues you. It doesn’t matter if his claim is real, made up, or frivolous. In any case, you’ll have to defend yourself in court, and if you want to stand a chance, you’ll have to get a lawyer. As you know, lawyers don’t come cheap and their fees alone could eat up your savings in a very short amount of time.
And of course, there are situations that don’t involve a car accident but you need auto insurance anyway. The most common one is car theft, but there is also vandalizing. Imagine that you save for years to buy your dream car. You’re not going to want to lose all that money just because you parked on the street. Or you could just drive your car around very specific places where you know the risk of car theft is low, but then you wouldn’t have a very practical car, now would you?
Then, there is the sad reality that, despite the requirements of California’s Financial Responsibility Law, many people drive around uninsured or with an expired insurance policy. In case of an accident, they will not be able to cover for your loses. Sure, you can get them fined or locked up, but that won’t fix your car or get a new one if you lost your car completely.
That’s why a lot of people are willing to pay the extra money for better insurance. And in opinion, it’s worth it.