Auto insurance, from the statutory floor upward

California law starts the auto conversation before any coverage question does. You must show financial responsibility for any vehicle that you own, in case of injury to other people or damage to their property, and the Department of Insurance notes that most people show it by buying auto liability insurance. Driving without insurance is illegal, and liability coverage is also required to register a car. Other routes exist — a cash deposit of $35,000 with the Department of Motor Vehicles, or a surety bond for $35,000 from an insurer licensed in California — but the Department records that most Californians maintain financial responsibility by buying that liability policy instead.

The three figures the statute fixes

The minimum limits for a standard auto policy are stated by the Department as $30,000, $60,000 and $15,000, and each of the three answers a different question.

$30,000

For the death or injury of any one person. If one person is injured in the accident, the coverage pays up to $30,000.

$60,000

A total, for the death or injury of more than one person in any one accident. If two or more people are injured the coverage pays up to $60,000, it will not pay more, and the injured people share the money.

$15,000

For damage to the property of other people — someone else’s car, or objects and structures your car hits.

Those are the minimum limits the law requires. If you cause an accident that costs more than the limit purchased, you are responsible for the damage beyond it. The Department’s own guidance on going higher is a rule of thumb rather than a figure: you may want higher liability limits than the law requires, and in general, the more assets you have, the more you could lose in a lawsuit.

Who liability coverage is not for

Liability coverage helps pay for injuries or damage that you cause to others. Separately, the Department states that liability coverage does not pay for injuries to you or the people in your household. The Department points to medical payments coverage for that gap: it covers the cost of medical expenses if you or your passengers are injured, can pay for immediate care no matter who is at fault, and can be bought with a minimum limit of $1,000 for each person injured, with higher limits available on request.

Collision and comprehensive, read from the definitions

The two physical damage coverages are easy to mix up and easy to settle, because the Department defines both. Collision covers damage to your car caused by physical contact with another vehicle or an object, such as a tree, rock, guardrail, or building. Comprehensive covers damage to your car caused by something other than a collision; the guide gives fire, theft, vandalism, windstorm, flood and falling objects as examples, and says it does not cover mechanical breakdown, normal wear and tear, or maintenance.

Notice what neither definition mentions: motion. The Department’s glossary illustrates collision with a parking-stall example, reimbursing you for damage to your automobile sustained in a collision with another car or with any other object, movable or fixed, and offering as its worked case a driver who accidentally backed into another object while pulling out from a parking stall and damaged the bumper and fender of the covered automobile. Reason from the definitions rather than from instinct, and read the policy language itself for the case in front of you. Both coverages provide compensation based on the market value of your car. Separately, among its ways to lower costs, the guide suggests thinking about dropping comprehensive or collision cover on an older car.

When the other driver has nothing

Uninsured and underinsured motorist coverage answers the accident that is not your fault. The insurance company must offer it, and declining requires signing a waiver saying the coverage was offered and turned down. Uninsured motorist bodily injury pays for injuries to you and any person in your car when an uninsured driver is at fault, with limits the same as your liability limits. Underinsured motorist covers limited costs for bodily injury when the other driver does not have enough insurance. Uninsured motorist property damage pays for damage to your car when an uninsured driver is at fault in the accident, with a limit of $3,500, and only where that driver is identified — the Department adds that you may not need it if you have collision coverage. A collision deductible waiver pays your collision deductible when an uninsured at-fault driver damages your insured vehicle.

The Good Driver rule, and the three ways a policy ends

Every automobile insurance company must offer coverage for Good Drivers. The Department defines a Good Driver as a person who has been licensed for at least three consecutive years and has no more than one point on their driving record, and adds a consequence with teeth: Good Driver rates must be at least 20% lower than a non-Good Driver’s rates would be at the same company.

Once a policy is issued there are only three reasons it can be cancelled or non-renewed — fraud or material misrepresentation, non-payment of premium, or a substantial increase in the hazard insured against. Costs vary even in the same area. The guide’s advice is to get several quotes in writing, ask the complete name of the company that will issue each policy, and check that it is licensed to do business in California.