• Q: What is Liability Coverage?
  • A: Liability is one of the fundamental forms of coverage addressed in most automobile insurance policies. Understanding the purpose of automobile liability insurance will help you decide how much coverage is needed to cover losses for which you are legally liable.
    • Legally Liable: Automobile insurance can include liability insurance coverage for accidents involving bodily injury and/or property damage for which the policyholder is legally liable. In other words, liability protection is the coverage that pays for injuries and damage sustained by a third party and/or their property for which you are responsible.
    • Bodily Injury (BI): If you cause an accident and someone is injured, your liability coverage as part of your automobile insurance will pay for their injuries. Minimum amounts of liability are often required by state law, however higher limits are usually available. Policies with split limits (i.e. 25/50/10) of liability separate the amount of coverage available for each injured person and the amount of coverage available for the accident. For example, a policy with split limits of 25/50/10 means $25,000 is the maximum amount payable by the policy for the bodily injury per person; $50,000 is the maximum payable by the policy per accident (the third number deals with property damage, which is discussed below). Other policies have a combined single limit (e.g. $100,000).
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  • Q: What are the California (CA) Auto Insurance State Minimum Requirements?
  • A: The state of California (CA) requires minimum liability limits are $15,000 bodily injury liability per person, $30,000 per accident, and $5,000 for property damage. Insurance requirements vary from state to state.
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  • Q: What Happens After I File the Claim With My Insurance Company?
  • A: Your insurance company will contact you for additional information, such as a detailed account of the facts, or a written or recorded statement. An examination under oath may be requested. As part of the investigation, other drivers and witnesses may be contacted. If you have medical payments or an uninsured motorist claim, you must provide documentation of your injuries, medical expenses, lost wages, et cetera.
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  • Q: Will my California (CA) Auto Insurance Policy automatically cover me when I purchase a new vehicle?
  • A: Coverage may apply for newly acquired vehicles, but you should check with your agent prior to purchase. Most companies have strict limitations on the types of vehicles to which coverage will apply, the type of coverage that will apply and the amount of time that may lapse before coverage will not apply.
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  • Q: Will my California (CA) Auto Insurance Policy cover me when I rent a car?
  • A: Many auto insurance companies will extend liability coverage to a non-owned vehicle when rented for personal use. However, restrictions may apply. Similarly, there may be restrictions to the coverage offered by the rental car company. Before taking your next trip, contact your agent to ensure that a restriction does not ruin your family vacation.
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  • Q: What will the insurance company pay on a Physical Damage Claim under a Standard Auto Policy?
  • A: Generally, the company will pay the lesser of
    • The amount necessary to repair the vehicle or
    • The actual cash value (ACV) of the vehicle.
    Read your policy to be certain of what is and isn’t covered. Pay particular attention to exclusions. For example, there is usually no coverage for stereo equipment, a telephone, or tires and wheels unless the equipment was permanently installed by the automobile manufacturer. Coverage is usually available for such special equipment for an extra premium charge.
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  • Q: What Is Actual Cash Value (ACV)?
  • A: Actual Cash Value - Unless otherwise defined in the policy, actual cash value in California means fair market value. The fair market value of an item is the dollar amount that a knowledgeable buyer (under no unusual pressure) is willing to pay, and a knowledgeable seller (under no unusual pressure) is willing to accept.

 

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