San Francisco Accident Attorneys

We usually think of having auto insurance as a necessary evil required by law. But the truth of the matter is that insurance serves a dual purpose: On the one hand, it ensures that a person injured by your carelessness (“negligence”) while driving will have a source to pay for his or her medical bills, lost wages, pain and suffering, and other damages. On the other hand, auto insurance protects your home, savings, and other property and assets from having to be sold or paid to the injured party. We may complain about the cost of insurance, but it is a lot cheaper than having to pay for an injured victim’s injuries and losses out of your own pocket.

California’s “financial responsibility” law requires every driver of a passenger car, truck, SUV, or other motor vehicle to have insurance that meets certain minimum limits. (There are several other ways than obtaining auto insurance to satisfy the financial responsibility law—for example, filing a bond with the Department of Motor Vehicles (DMV) or by depositing $35,000 cash with the DMV—but, with rare exception, the individual driver has auto insurance so we will limit our discussion to that.)

At a minimum, your auto insurance must provide limits of bodily injury coverage of $15,000 per person injured in the accident to a maximum of $30,000 per accident, and $5,000 for property damage per accident. This is known as the traditional 15/30/5 policy. Under the bodily injury provisions of your insurance policy, if you injure or kill one person in an auto accident that you caused, the most your insurance covers is $15,000. If two people are injured or killed in the accident, the most either can obtain from this type of policy is $15,000. If three or more people are injured and/or killed in the accident, the most the policy will pay is $30,000, with no single person allowed to collect more than $15,000. If you seriously injure three or more people in an accident, how they distribute the $30,000 is up to them. If they cannot agree on how to divide the money, the best and lowest cost option is for them to mediate the claim.

Bodily injury coverage extends to all hospital and medical services and supplies, emotional damages, pain and suffering, and economic damages such as lost wages. Property damage insurance covers damage to the other party’s car and its contents. In an auto insurance policy, property damage insurance usually applies only to damages to the vehicle itself, and not its contents. However, homeowner’s or renter’s insurance generally covers the contents of your car that are damaged or destroyed.

The minimum amount of insurance coverage for property damage that you must have is $5,000. With the prices of new cars and the costs of repairing them as high as they are, $5,000 is only sufficient to cover the damages in a low-impact fender-bender.

If all you have is the bare minimum policy limits of $15,000 per person, $30,000 per accident, and $5,000 property damage, the chances are that will not be enough to pay for all of the injuries and damages resulting from an accident for which you are at fault. If you were responsible for the accident and your insurance policy limits are not sufficient to fully compensate the person you injured for all of his or her injuries and damages, the injured person may seek compensation from your other property and assets, such as your house, other real estate you own, your savings, your investment portfolio, and other assets you have. The 15/30/5 limits were set decades ago and are insufficient to fully cover many accidents happening today. That is why it is important that you have higher limits.

The amount of your limits depends in large part upon how much property you have and how much money you make a year. If you rent, have no savings in the bank, and work at a job that pays minimum wage, then maybe you can get away with a 15/30/5 policy. But if you own your home, have significant savings or a good-paying job, then you should seriously consider having higher limits, such as at least $100,000 per person, $300,000 per accident, and $50,000 property damage. You may even want to consider increasing your bodily injury insurance protection to $250,000 per person and $500,000 per accident.

For maximum protection, you should have an “umbrella policy” giving you protection up to one or two million dollars or more. Umbrella policies are generally one of the best values in insurance, providing you with a million dollars’ worth of coverage for only a few hundred dollars a year. Many companies will offer you umbrella coverage only if you have all of your cars and your home insured by them as well. If you think that umbrella coverage might be good for you, but your homeowners insurance and auto insurance are with different insurance companies, be aware that it is not necessary for the policy to expire before you can change it.

For instance, if you have a six-month policy but at three months into the coverage you decide to change insurance companies for the purpose of getting umbrella coverage (or any other reason, for that matter), you can change insurance companies. The old insurance company must refund to you any money you may have paid in advance for the cancelled period. Thus, if you pay all of your six-month premium up front and cancel the policy after three months, the insurance company must refund three-months’ worth of premiums.

“Uninsured motorist” (UM) coverage provides you with coverage in case you are injured by a motorist who does not have any insurance. This means that if you are injured by a driver who does not have insurance, your own insurance policy will pay for your injuries and damages, up to the policy’s limits. You determine the limits of coverage of uninsured motorist coverage when you obtain a motor vehicle insurance policy or renew it. Uninsured motorist coverage does not mean that it will cover the injuries suffered by the uninsured motorist or pay damages to his or her property, regardless of which of you is at fault.

Suppose you are seriously injured in an accident—your bodily injuries result in over, say, $50,000 in bodily injury damages—but the person who hit you has only the minimum 15/30/5 policy, meaning the most you can collect from his or her insurance company is $15,000, leaving you $35,000 in the hole. How do you protect yourself in such a situation? By having “underinsured motorist” (UIM) coverage. Underinsured coverage means that the person who injured you has insurance, but the limits are not enough to fully compensate you for all of your injuries and damages. UM and UIM are usually sold as a package deal.

In California, “collision insurance” protects you in any type of collision: if you are struck by a car, if you are driving down the highway and hit a deer, or if you are driving and swerve to avoid the deer and crash into a tree, all situations are covered by collision insurance. Collision insurance covers damage to your car whether due to your own carelessness or the acts or carelessness of another. “Comprehensive insurance “ covers you for damage to your car not caused by a collision, such as when it is stolen, vandalized, damaged or destroyed by fire or flood, a windshield is broken, or otherwise, such as when your car is damaged by someone pushing a shopping cart into your car or “keying” it.

Insurance rates (“premiums”) are determined by a number of factors: your zip code, your age, the number of years you have been driving, your driving history (such as the number of accidents you have caused and traffic tickets you have received in the last three years), the type of vehicle you drive, whether you’ve been convicted of a DUI, the number of miles you drive each year, whether you use your vehicle to commute to and from work, whether you are a full-time student and if so whether your grades are a “B” (3.0) or better (good student discount), the types of coverage you want (such as uninsured/underinsured motorist coverage or collision and/or comprehensive coverage and the amount of the deductibles), and the amount of coverage (for example, $15,000 bodily injury limits per person versus $100,000 policy limits per person). Other factors are whether you are insuring more than one car (a multi-car discount) and whether you are having the insurance company insure your house as well as your vehicles. Also, the rates are not set by laws but rather by the insurance companies themselves, so you might save several hundred dollars or more by shopping around.

The area you live in—your zip code—is the most important factor in determining most drivers’ rates. If the drivers in your zip code get into more accidents than drivers in a neighboring zip code, your insurance rates will be higher, regardless of your driving history. This can result in two people with identical driving records living across the street from each other but in different zip codes paying significantly different premiums than the other.

There are several things you can reduce your insurance premium. One is to reduce the bodily injury limits of your policy if they are greater than the traditional 15/30/5 policy. We do not recommend this, however, because if you have any assets to speak of, have the minimum 15/30/5 policy limits, and get into an accident that causes significant injuries or death, the injured party (or his or her heirs) will go after your personal assets. Comprehensive and collision insurance can be costly. To reduce your insurance premium, you may wish to increase your “deductible”—the amount you have to pay out of your own pocket before insurance kicks in. For example, rather than having a $250 deductible, you may want to have a $500, $750.00, or higher deductible. If your car is older, you may think about dropping collision and comprehensive coverage altogether.

If you have a high-risk driver in the household, such as a student with a couple of speeding tickets, you may want to specifically exclude that driver from operating your more expensive car and permit him or her only to drive your older car. Be advised, however, that if the excluded driver does in fact drive the car he is excluded from and gets into an accident, your insurance will not cover the damages and you will be on the hook personally.

If you let another person drive your car and that person causes an injury, you can be held liable under California’s “permissive user” law up to $15,000 per person, $30,000 per accident, and $5,000 property damage. (Of course, there is not limit on how much the injured party or parties can recover from the negligent driver.) But if you were independently negligent in letting this person drive your car, the injured person(s) may be able to recover monetary damages from you in excess of the permissive user limits; there are no pre-set limits to the amount the injured person or the heirs of a deceased person can recovery from you.

For instance, if you lend your car to a driver you know or should know has been drinking and is impaired, you can be held legally responsible (“liable”) for “negligent entrustment.” Negligent entrustment is not limited to just drivers impaired by alcohol or drugs. If you let someone who has a history of getting into accidents, driving recklessly, a number of tickets, or know of any other facts that make this person an unsafe driver, you may well be held liable for negligent entrustment if you permit that person drive your vehicle and he or she causes an accident.

There are two broad types of automobile insurance policies: owners’ policies and operators’ policies. An owner’s policy insures the registered owner of the vehicle (the “insured”) and any other person using the vehicle with the insured’s express or implied consent (“permissive users”) against damages arising from the ownership, maintenance, or use of the vehicle. An operator’s policy, on the other hand, insures the named person for damages caused by that person while using any vehicle he or she does not own; if the insured operator buys a car, the operator must purchase an owner’s insurance policy before the expiration of ten days from the date of purchase.

If a peace officer pulls you over for a suspected violation of the law, you must produce proof of insurance (or other form of financial responsibility) upon request. Note that a peace officer may not stop you where you have not done anything wrong and the stop is for the sole purpose of determining whether or not you have insurance. The failure to provide the peace officer with proof of insurance upon request is an infraction, the first violation of which can result in a fine of from $100 to $250. Subsequent convictions within three years of the original convictions for failing to have insurance are punishable by not less than $250 nor more than $500, plus penalty assessments.

However, if you are unable to prove to the court at the hearing that you had insurance at the time the peace officer stopped you but just didn’t have proof of it with you, the court may order the car to be impounded for the failure to provide the peace officer with proof of insurance or other financial responsibility. The impounded car may be released to the legal owner if the legal owner is a dealer, bank, credit union, acceptance corporation or other licensed financial institution legally operating in California. The lender (legal owner) may not release the vehicle to the registered owner unless and until the registered owner presents proof of insurance on the vehicle and pays all towing and storage and other costs related to the impounding and storage of the vehicle.

If you do not have insurance and cause an accident that results in bodily injury, death, or property damage more than $750 (i.e., an accident that must be reported to the DMV), your driver’s license will be suspended until you have paid in full any judgment against you (up to the minimum limits of 15/30/5) and show proof of financial responsibility (insurance). Your driver’s license will be suspended for one year, and to get it back at the end of that year, you must show proof of insurance.

An uninsured driver’s license can be suspended for one year. The person must surrender all of his or her driver’s licenses to the court and may not receive it back until one year has passed and the person provides evidence of insurance (or other form of financial responsibility). Instead of suspending the person’s driver’s license completely, the judge may restrict the person’s driving privileges to driving that is required in the person’s scope of employment, if driving a motor vehicle is necessary in order to perform the duties of the person’s primary employment. If the person violates the restrictions on driving, the court may suspend or revoke the person’s driver’s license.

If a person’s driver’s license is suspended for failure to have insurance, the DMV must notify such person that he or she may apply for a restricted license, but it will be necessary to give proof of financial responsibility (“insurance), and payment of fines and reissuance fees, that will allow the person to drive to and from work, and during the course of his or her primary employment, during the one-year suspension period. If a person whose license has been suspended for not having insurance has serious health problems, or is a member of that person’s immediate family, the DMV may issue a restricted license for the purpose of allowing the driver to drive a motor vehicle for the purpose of receiving medical or mental health treatment of a prolonged and repetitive nature for the applicant or member of his or her immediate family with serious health problems, providing the applicant obtains, files, and maintains proof of insurance on file with the DMV.

To determine what type of insurance you should carry, speak with an insurance agent who can help you choose which policy is right for you and your family.

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