What Is Minimum Liability Coverage and Why Are People Unhappy with It?
Each state has laws that specify the type of insurance people need if they want to drive a car. If a person intends to buy the smallest amount of insurance, this kind of plan is called minimum liability coverage, meaning their policy insures them up to the smallest possible legal amount. For example, in California, minimum liability coverage requires all drivers to have insurance that gives at least:
- $15,000 for a single death or injury
- $30,000 for death or injury to one or more people
- $5,000 for property damage
People can certainly opt for a policy which offers a larger umbrella, but they sometimes choose the cheapest option because they think it will save them money in the long term. These individuals couldn’t be more wrong.
The average person will file a car accident claim once every 17 years or so. Collisions may only result in a scratch on the bumper, but, if the accident destroys both vehicles involved, those with minimum liability coverage will get only $5,000 for the expenses. The $5,000 could get the policyholder an old, used car, but he or she still has to pay damages for the other automobile if the policyholder was the at-fault driver. For example, if the other vehicle was a new Mercedes-Benz, the cost of replacing the car would begin around $39,500 (not including the extra bells and whistles). And, that’s only property damage.
Medical care can be exorbitant, particularly if an injured person requires long-term care and needs to miss work as a result of the accident. Minimum liability coverage will insure up to $30,000 for multiple individuals, but if a large van full of people was involved in the incident, how expensive do you think their collective bills would be? Even severe car accidents involving only one person can accrue medical costs from $503,638 to $992,867 if it caused a catastrophic injury.
Underinsured drivers are a problem on the road. While California requires insurance companies to offer underinsured and uninsured coverage in their policies, the state doesn’t mandate that people opt into the coverage. Policyholders may reject this option on the assumption most drivers on the road have insurance under California law. People may not understand that underinsured driving is legal and can cause them serious problems. If the underinsured can’t pay for your medical bills, you’ll have to rely on your own coverage. And, if your own insurance doesn’t cover the total cost of your health care, you’ll have to pay out of pocket.
If you’ve been in an auto collison with an underinsured driver, make sure you have excellent legal representation. Our Santa Clarita car accident attorneys understand your compensation is of the utmost importance. We have more than 20 years of experience advocating for accident victims. Call us at (661) 441-3446 or fill out our online form with your case details. We look forward to speaking with you in a free consultation.