The Good ,The Bad and The Ugly of Auto Insurance

By Dale Gribow
 
We all know about the legal requirements of having auto insurance and most of us purchase it to protect ourselves and our loved ones from liability in case of an accident. However few of us have any idea what we are getting… or not getting and what we legally need.
 
When we study for our California Driver’s License, the booklet we review for the test explains that our Driver’s License is a Privilege and NOT a Right. With privileges come responsibilities and the need to follow the driving laws as set forth in the California Department of Motor Vehicle’s Code.
 
California has a financial responsibility law that specifies how much auto insurance a driver must have in order to legally drive on California roads. The minimum needed today is $15,000/$30,000. That covers the driver of the at fault car for up to $15,000 for any one person, and $30,000 total for all the people in the other car… with no one person getting over $15,000.
 
Of course if the damages to the not at fault driver are valued at more than $15,000 the other side is still responsible for the additional amount above $15,000. The not at fault driver can sue the at fault driver and after a verdict they can attach wages and assets and renew the judgment every 10 years. The only way out of that responsibility is for the at fault driver to file bankruptcy.
 
One of the ways to protect yourself is to purchased UM, Uninsured Motorist coverage. This will kick in when the other driver only has an amount that is not enough to cover all your damages. Thus if the at fault driver has a $15,000 policy and your injuries are worth $100,000 you would make a claim against your own policy under the Underinsured portion of the UM Policy for the difference of up to $100,000 total. If the other at fault party has NO insurance you would make a claim against the Uninsured motorist portion of the UM policy.
 
Some of us want higher limits of protection and unnecessarily pay to get a $1,000,000 liability policy… which is very expensive.  One of the tricks that you should discuss with your insurance man/woman is to find out what limits are required by the insurance co before they allow you to purchase an UMBRELLA policy. I believe I have a $250,000/$500,000 policy which was needed before I could purchase an umbrella.  I purchased an umbrella policy for a few hundred dollars a year for a million to 3 million of additional protection. This is a lot cheaper than getting the same coverage by buying one policy for that $1,000,000 + amount.
 
The liability portion of your auto policy protects you from the DMV’s requirement of minimum coverage. It pays for claims related to bodily injury and for property damage to third parties caused by the covered driver. However any loses such as bodily injury or property damage sustained by the driver are NOT covered under liability insurance.
 
If you fail to obtain liability insurance, you can be fined, ordered by the court to do community service etc and even lose you driving privileges for up to one year.
Here in the greater Palm Springs area we read in the Desert Sun and Coachella Valley Weekly about CHECKPOINTS. They not only site Drunk Drivers but during the stop they request a copy of your Driver’s License and proof of insurance. They also run you for warrants for outstanding tickets or not paying fines on ANY vehicle code violation. This also happens when you are stopped for any traffic infraction. If they learn you are not covered by insurance you can lose you privilege to drive for one year. They can also impound your car for 30 days and take it to a tow yard where you will have to fork over hundreds of dollars to get your car back after 30 days.
 
Insurance should be purchased to protect you from the “big hit” in case you are at fault. Not only does it protect you financially but it does so legally. If you are in an accident and do not have insurance you license will be taken away for a year.
 
After an accident we are all required to fill in an SR1. Even if you do not the other side will and then with computers will advise DMV of your accident and inquire of your insurance in effect on the date of the accident.
 
If you have any questions regarding this column or ideas for future columns please contact Dale Gribow Attorney at Law at our NEW number 760- 837- 7500 and or our new email of dale@dalegribowlaw.com. Thank you Steve M for the suggestion for this week’s column. For the rest of you please be patient as you have given me great suggestion for future articles.