Insurance offered through California's Low Cost Auto Insurance (CLCA) program offers the lowest liability policy limits:
- Injury: $10,000 per person, $20,000 per accident
- Property damage: $3,000
If you get hit by a negligent driver with this bare bones coverage, that means that the most his or her insurance carrier will pay for your injuries is $10,000. If more than one person in your car was injured, the most the other driver's carrier will pay is a total of $20,000, to be divided between all of the injury victims. The most the other driver's carrier will pay for your property damage is $3,000. (I.e., the most the other driver's carrier will pay for the repair or total loss of your car and for a rental car is $3,000.)
If it was a multi-car accident and the at-fault driver had this bare bones coverage, there is a high probability that the at-fault's driver's policy limit will not be enough to cover everyone's injury claims. Additionally, the at-fault driver would have only $3,000 in coverage to pay everyone's property damage claims.
The negligent driver is still legally liable for all of your damages (medical bills, lost wages, and property damage), however, the fact is, if they had insurance through CLCA, then they had to meet CLCA's low income eligibility requirements. It would thus likely be futile to try to go after them personally.
Importance of Uninsured/Underinsured Motorist Coverage
Your only hope if you get hit by a driver insured through California's Low Cost Auto Insurance program is that you have uninsured/underinsured motorist coverage. If you do, your "underinsured motorist coverage" will kick in and apply to the accident, provided that the other driver's injury policy limits are insufficient to cover the value of your claim.
Example of How an Underinsured Motorist Claim Works
Let's say you get hit by a driver with only $10,000 per person in liability injury coverage, and you have $25,000 per person in uninsured/underinsured motorist coverage on your car. Let's say the value of your claim is about $50,000. Here's what would happen. The other driver's insurance carrier would pay the $10,000 policy limit. Since you have $25,000 in underinsured motorist coverage, you could go after another $15,000 under your policy. You don't get to claim the full $25,000 in underinsured motorist coverage from your carrier. In California, your policy and the other driver's policy don't "stack," i.e., you don't get to claim his or her $10,000 + your $25,000. Instead you deduct his/her policy limit from your policy limit, which leaves the amount you can go after from your insurance company.
High Uninsured/Underinsured Motorist Policy Limits are Critically Important
Because the drivers who cause car accidents often have no auto insurance, or the minimum liability limits, the only way to protect yourself and your family is to carry high uninsured/underinsured motorist policy limits. At McGee, Lerer & Associates, we recommend that everyone carry at least $100,000 per person/$300,000 per accident in uninsured/underinsured motorist limits. Even better: $250,000 per person/$500,000 per accident.
If you don't have that coverage, we strongly encourage you to call your insurance agent TODAY and increase your coverage. It will surprise you how little your premium will increase to get this coverage.
Good to Know: Your uninsured/underinsured motorist coverage will even protect you and your children if you or your children get struck by a negligent uninsured driver or underinsured driver while you or your children are in someone else's car. It will also cover you and your children if you get hit by a negligent uninsured or underinsured driver while you or your children are biking or walking.
Read more about uninsured/underinsured motorist coverage here.