Minimum insurance requirements in California are silly in today's economy.
Posted on Dec 09, 2009
In the last two months the lawsuits I've been handling have included an extremely emotional and difficult wrongful death case, and an auto accident in which a client's neck disc was herniated after impacting a windshield. While very different in many respects, they did have one thing in common: the Defendant had far too little insurance given the damages involved. In the auto accident case, California only requires liability insurance of fifteen-thousand dollars. This limit was set years ago, and has not been adjusted for inflation. While a person may obtain underinsured motorist coverage (it is never a good idea to decline such coverage through your own auto policy), one shouldn't have to. The law should require a reasonable minimum of insurance. Given that modern medicine is prohibitively expensive, fifteen-thousand dollars is, frankly, ridiculous.
In the wrongful death action, the Defendant was a now defunct company but working on a 15 to 20 million dollar construction project. That company only carried insurance of only one-million dollars. Given the scale of the project, this is also unacceptably low. Unfortunately, no statute requires that it carry more.
You may ask: "why not simply go after the Defendant, rather than his insurance?" There are several reasons. Defendants that do not own property and have no money in bank accounts brings to mind the proverbial "can't squeeze blood from a turnip." It also is expensive to prosecute a case to verdict, and that cost is paid by the client through what little they can recover. The California legislature, rather than spending time working on pay raises for themselves, should institute a minimum insurance requirement immediately.