John and Mary Doe, along with their children, are driving down the road when suddenly, a vehicle being driven by Jeff makes an illegal left turn in front of them causing a crash. John and Mary both suffer serious neck and back injuries, while the children suffer from facial lacerations. Jeff was compliant in California and carried a $15,000/30,000/5,000 liability insurance policy. John and Mary bring claims against Jeff for injuries to their family and for their car damage. Jeff's insurance company offers to pay the family the entire amount of Jeff's available insurance, $30,000, to all the family members for their injuries, and $5,000 for the car damages. Unfortunately, however, the medical bills collectively incurred by the family is $35,000, and it cost $13,500 to fix the family car. Nevertheless, Jeff's insurance will only pay the family the limits of Jeff's liability policy, leaving John and Mary with substantial debt.
For over 50 years, California minimum liability auto insurance limits have remained the same, never having been adjusted for inflation. To be compliant with California law, a vehicle owner must have carried minimum liability limits of $15,000/30,000/5,000 (Commonly known as a 15/30/5 policy.) The $15,000 is available to one person for their injuries, the $30,000 is available to pay multiple injured people, and the $5,000 is available for property damage. Thus, for John, Mary, and the kids, the family would have to share the $30,000, and would only receive $5,000 for the car damage. Obviously, these amounts are extremely low today given the cost of medical bills, auto repairs, and lost wages. But this common scenario happens every day in California.
Finally, beginning on January 1, 2025, the California State minimum liability limits have been increased. Consumers have been advocating for increases to the state minimums for decades, and most states in the country have substantially higher minimal liability limits than California. The new CA state limits are $30,000/$60,000/$15,000, doubling the liability limits for bodily injuries, and tripling the limits for property damage. This is a welcome and long overdue increase for California consumer protection.
Going back to John, Mary, and the kids. Under the new state minimums, the family would now be entitled to share up to $60,000 for their injuries, and up to $15,000 to repair their vehicle. Over the next several years, these limits will also be increased to even higher minimal limits.
On an equally important note, in order to fully protect you and your family, consumers should carry high limits of uninsured/underinsured motorist coverage. In the above accident scenario, if John and Mary carried a $100,000/$300,000 uninsured/underinsured motorist policy, the family would have an additional $240,000 available to them for their injuries. The family would receive $60,000 from Jeff's insurance company, plus up to $240,000 more from their own uninsured/underinsured motorist insurance policy, for a total of up to $300,000 to the family. It is also worth noting that to buy this much uninsured/underinsured motorist coverage is very inexpensive, at about $100/year.
Edzant Price LLP encourages all drivers to review their own auto policies and to carry a minimum $100,000/300,000 of uninsured/underinsured motorist. Purchasing $250,000/500,000, or more, is strongly recommended.
