Find out how California's Low Cost Auto Insurance Program could prevent you from receiving the compensation for medical bills and property loss or damage you are entitled to after an auto accident.
Imagine that you are driving to work on the freeway, just as you would any other morning. Suddenly a car crashes into you, the impact causing you to collide with the truck in front of you, triggering a six-vehicle pile-up. You sustain serious injuries requiring thousands of dollars in medical attention; you miss months of work, and your car is totaled. When you seek compensation for these expenses from the driver who initially caused the accident, you may discover that the driver’s insurance policy will only cover a small fraction of your medical bills and is insufficient to compensate for your property loss.
“This occurs every day in Orange County and Los Angeles,” explains a California injury lawyer. “In the past few years, as unemployment numbers have continued to peak, many individuals are driving with no auto insurance or with extremely low liability policies.”
Under California’s Low Cost Automobile Insurance Program, the minimum amount for which a low-income driver must be insured has been lowered. The minimum required policy prior to 2009 was already insufficient: drivers were only required to carry a minimum policy of $15,000 in bodily injury liability per a person; $30,000 in bodily injury liability per accident; and $5,000 for property damage liability per accident. Instead of raising these numbers to amounts that would actually cover the damages an accident victim usually suffers in a collision, the state lowered them. Low-income “good” drivers can now obtain a policy that only pays out $10,000 for bodily injury liability per person; $20,000 for bodily injury liability per accident; and $3,000 for property damage liability per accident.
What does this mean for you? If you are involved in anything more than a minor collision, the negligent driver’s insurance policy probably will not cover even half of the expenses related to the accident, according to a California injury lawyer. You will only be able to recover $3,000 for property damages, including for costs related to repairing the car, such as vehicle towing and storage and car rental. In most cases, the compensation will not be enough to even repair the car.
If you were injured in the accident, $10,000 is the maximum amount of compensation you will receive for medical expenses, pain and suffering, and lost wages. In the aforementioned scenario, in which six vehicles were involved in the accident, including the negligent driver, you and the four other accident victims would have only $20,000 in bodily injury liability insurance available to compensate for all of the injured party's losses.
The low-income “good" drivers that qualify for this program are not required to have a clean driving record, either. According to the California Department of Insurance’s website, a “good” driver is defined as having “no more than one at-fault property damage only accident or more than one point for moving violation in the past three years.” Individuals responsible for past accidents are eligible for automobile insurance that will hardly compensate for the damage they could cause to other drivers in the future.
How can you protect yourself? As the liability coverage of many of the drivers you share the road with decreases, obtaining collision and uninsured motorist insurance—if you do not already have it—will ensure that you are protected in the event of an accident. The collision insurance will compensate for the property repair and replacement costs not covered by the liable party’s policy. The uninsured motorist insurance will help protect you in the event that your medical expenses exceed the responsible party's policy.
During these difficult economic times, an increasing number of drivers either do not have car insurance or have extremely low liability policies. We must protect ourselves by ensuring that we are sufficiently insured, as accidents are always unexpected and unfortunate—even more so now that we must bear most of the burden.
James Ballidis is a California injury lawyer and the author of numerous books on personal injury law. For legal advice or to request a copy of one of his books, feel free to call 866-981-5596.