If you drive a car, you have to have auto insurance. It's that simple. Why? Because, State of California require at least $15,000 Per Person $30,000 Per Accident liability coverage and $5,000 Property Damage coverage for all vehicles registered in the state.. But, beyond state legal requirements, when you look at the facts and figures of automobile accidents, you'll realize that auto insurance is one of your most valuable and important expenditures.

What is Bodily Injury Liability?

If you or someone else who is covered on your policy is legally responsible for causing injury to the occupants of another car or a pedestrian, the Bodily Injury Liability coverage part of your policy will pay for their medical bills, lost wages, expenses, pain and suffering, etc. up to the limits you purchased.

What is the difference between Bodily Injury coverage and Medical Payments?

Basically, Bodily Injury liability coverage pays for the medical expenses of pedestrians and occupants of another vehicle if you are legally responsible for causing the accident. It would also pay other expenses such as lost income, pain and suffering. Medical Payments coverage reimburses you and any passengers in your vehicle for medical expenses that are incurred as a result of an accident, no matter who is considered legally responsible for the accident.

What is collision coverage?

Collision covers repair or replacement of your vehicle for any direct and accidental loss resulting from an upset, or colliding with another object, except an animal (which would be handled under your comprehensive coverage). Collision pays for the repair or replacement of your car at its current market value, less your deductible. Many experts recommend skipping collision coverage if your car's resale value is less than $3,000. However, you should only skip collision if you can afford to replace your car should it become totaled in an accident.

You will need collision if you are leasing or buying a car and have a lien holder (i.e., bank, finance company, etc.). In addition, you can purchase collision without having comprehensive coverage, but most insurance companies will not let you purchase comprehensive (which covers loss from theft, fire, vandalism, etc.) without collision.

What is comprehensive coverage?

Comprehensive provides coverage for damage done to your vehicle in any situation other than an accident. For example, theft, vandalism, fire and colliding with an animal would be covered under comprehensive. A number of experts recommend you pick the highest deductible you can afford, as this will give you the best premium savings.

You will need comprehensive coverage if you are leasing or buying your car and there is a lien holder (i.e., bank, finance company, etc.). Since the cost of comprehensive coverage accounts for a large portion of your premium, many experts suggest you think about dropping comprehensive coverage if your vehicle is worth less than $3,000. However, if you drop your comprehensive coverage and your car is stolen, vandalized or catches fire, you will need to repair or replace it yourself.

What is Uninsured Motorist Coverage?

Uninsured Motorist coverage for Bodily Injury covers you for injuries that you and your passengers sustain as a result of an uninsured driver. It also provides coverage for hit and run accidents where you are the victim. Uninsured Motorist coverage for Property Damage covers you for damage to your vehicle as a result of a negligent, uninsured driver. Most states have different limits for this coverage. It is applicable only if the other driver is at fault. You'll need written proof that the driver is uninsured. This could be a letter from the other party stating that they are uninsured, or a police report which states that the other party is uninsured and at fault.