Understanding Car Insurance

California state law requires all drivers to be covered by an auto insurance policy, but choosing the policy that best suits your needs can be difficult.  Not all insurance providers will explain the differences to you, and not all auto insurance policies are created equal. If you are involved in an accident, either an accident you caused, or if you are injured by another driver, the details of your auto insurance policy will greatly affect your ability to recover financially. 

When choosing between insurance carriers and car insurance policies, you should ask specific questions about what the insurance policy covers, and what it does not. For example, what happens if you are injured by someone without insurance? What might happen if you are injured by someone with minimal coverage, but your medical bills are much more expensive than what the at-fault driver's insurance covers? Asking the right questions will help you decide what policy is best for you. 


A basic understanding of common insurance industry terms will be helpful:

• MedPay (Medical Payment Coverage)

This coverage will pay for medical bills you incur as the result of a car accident. For example, if someone hits you and you have to go to the hospital, MedPay or Medical Payment Coverage will cover your costs. Most minimal coverage insurance policies do not include MedPay, and it is usually an add-on.

• Liability Coverage

If you cause an accident, this coverage will pay the costs of the other party's injuries and pain and suffering (general damages). Most insurance policies have two numbers, such as 15/30, 25/50, 100/300, etc. The first number is the maximum amount a single individual may recover from your insurance policy if you hurt them. For example, if you carry 15/30 coverage and you hurt someone, the maximum the insurance company will pay the injured party is $15,000. The second number is the total amount that the insurance company will pay to all injured parties. For example, if you cause an accident that injures ten people, the second number ($30,000 in a 15/30 policy) is the total amount that must cover all injured parties. Keep in mind that even though that is the max the insurance company will pay, you may personally still be responsible. If you injure someone and they have large medical bills, they can sue you and if the court awards them something greater than what you are insured for, you will be on the hook. For example, if a court awards someone you hurt $50,000, but you only have 15/30 coverage, you will be responsible for paying $35,000.

• Uninsured Motorist Coverage (UM)

 This protects you from individuals who drive without insurance. If someone hits you and they don't have insurance, who is going to pay your bills? With uninsured motorist coverage (UM), your bills will be paid for by your own insurance. 

• Underinsured Motorist Coverage (UIM)

This coverage covers you against personal losses you incur from an accident someone else causes that exceed the at-fault driver's insurance policy. For example, if someone with a 15/30 policy injures you, and your bills are $50,000, if you have UIM coverage, your insurance kicks in and pays when the at-fault party's policy is exhausted. In this example, after the full $15,000 is paid by the at-fault party's insurer, your UIM kicks in and may pay the additional $35,000. When and if UIM kicks in differs state by state, so checking in with a personal injury attorney licensed in the state you were injured in is always a good idea.

• Property Damage Coverage  

This coverage means your insurance company will pay for your damaged car, but this is subject to a deductible, which means you will first have to pay the deductible before your insurance will pay for the damage. If the damage to your vehicle is less than your deductible, you will have to pay to repair your car out of pocket.

The Lions Injury Lawyers deal with the differences in auto insurance policies every day. If you are injured, the numbers in your insurance policy suddenly become extremely important. We give free case evaluations to anyone injured in an accident, and we explain how things are likely to play out with the at-fault insurance company. Auto insurance is not straight-forward, and there are literally hundreds of exceptions (tricks) that auto insurance providers can use to deny payment. If you have questions about your insurance policy, or if you were injured in a car accident, give us a call at (949) 329-5000 today to discuss your California car accident injury case.