Auto Accidents and Insurance Claims
When you are in an auto accident in California––whether it’s with another passenger vehicle, a commercial truck, semi-truck or another commercial vehicle, or even a pedestrian, motorcyclist or bicyclist––you will most likely deal with an insurance company first to try to obtain compensation for both property damage and bodily harm. Understanding California’s auto policies is an important step to understanding or anticipating what you may be able to recover in a settlement, during litigation, if needed, or jury award.
Here, we try to outline these auto policies as clearly as possible, but during negotiations for compensation, much of it will come down to the details of the insured’s policy, and this can vary from person to person or organization to organization. Also, you have to remember you are dealing with an insurance company that has years of experience and many adjusters and lawyers on its side. Adjuster is an appropriate title because that’s what this employee does: adjust the terms and compensation in their favor, not yours. Plus, the lawyers use intimidation tactics to reduce or avoid payment altogether––that also includes your own insurance company that you paid to protect you and your loved ones.
We do our part to make sure you retain the best attorney for you and your circumstances. Review the below summary of auto insurance policies and then contact us today to get started on your personal injury claim or lawsuit.
California’s Minimum Auto Insurance Coverage
California requires all vehicle owners and drivers to either purchase minimum auto insurance coverage or demonstrate financial responsibility. This minimum auto insurance liability coverage does not cover your own injuries or property damage when you cause the accident. Likewise, if you are struck by another driver, their minimum liability coverage (if they followed the law and have it) will cover your injuries and property damage up to the insured amount also referred to as liability limit.
In California, the minimum liability coverage for standard auto insurance policies is listed below.
- Minimum Bodily Injury Liability Limit for One Injured Party: $30,000 minimum for the death or injury of any one person in an accident (was $15,000 before 2025). This means you can demand up to $30,000 in bodily injury damages (from the at-fault party) if you are the only one injured and your medical bills and other expenses add up to it. You cannot, however, demand more than the limit if your expenses exceed it. You could, alternatively, sue the at-fault driver or at-fault entity––if it’s feasible, and it’s only feasible if they have assets to cover all your losses.
- Minimum Bodily Injury Liability Limit for Multiple Injured Parties: $60,000 minimum for the death or injury of more than one person in an accident (was $30,000 before 2025). If two or more are injured, they must share the liability coverage and demand only up to $60,000 total from the insurance company of the at-fault party. If their expenses exceed a total of $60,000, then they may have to sue for it.
- Minimum Property Damage Liability Limit: $15,000 for damage to property (was $15,000 before 2025) belonging to other people or entities (e.g., vehicle, traffic sign, fence, etc.).
A driver or vehicle owner can also choose to show financial responsibility rather than purchase insurance. If so, that driver can do one of two things:
1. Deposit $35,000 cash with the Department of Motor Vehicles; or
2. Take out a surety bond for $35,000 from a California-licensed insurance company.
Regardless if drivers take out the minimum liability coverage or undertake one of the two options listed above, they must carry proof of financial responsibility in the vehicle at all times. Though these are the minimum insurance limits required by California law, there are other options, too, that can be purchased to better protect the insured and others. We highly recommend to always maintain higher policy limits since you never know what can possibly happen.
Speak with a lawyer about your case today. Free, no-obligation, and fully confidential consultations.
California’s Optional Auto Insurance Coverage
California’s optional auto insurance coverages include policies that will help drivers cover themselves and others better, especially in situations where they have been injured and the other party (who may be at fault) doesn’t have or doesn’t have enough in the way of auto insurance coverage because they only have the minimum or do not have a current auto insurance coverage. As mentioned, these are optional and not required by law.
Higher Liability Limits
As recommended above, you can purchase higher liability limits than the law requires. This is important especially for people with more assets because if there’s a lawsuit, your assets are at risk. For example, instead of the minimum bodily injury liability limits of $30,000 and $60,000, you could purchase a policy for liability limits of $100,000 and $300,000.
Uninsured Motorist Coverage (UMC) / Underinsured Motorist Coverage (UIM)
UMC/UIM coverage covers a person and his or her passengers when in an accident and the at-fault driver does not have any liability insurance (Uninsured Motorist Coverage) or not enough insurance (Underinsured Motorist Coverage) to cover all the costs and damages. In California, insurance companies are required to offer this type of auto insurance policy, but you can refuse it by signing a waiver. This type of coverage can be divided into separate categories:
1. Uninsured Motorist Bodily Injury (UMBI). UMBI covers the expense of bodily injuries to you and other people who were in your vehicle at the time of the accident and were injured. It only applies in situations where the at-fault driver is uninsured. UMBI limits generally match your liability coverage limits. So, if you purchased a 15/30 minimum liability plan, then you can file a claim with your own insurance company up to the $15,000 or $30,000 limit if you get hit by an uninsured driver. On the other hand, if you increased your liability limits to a 50/100 policy, you can file a claim up to $50,000 for one person’s injury or $100,000 total for more than one person’s injuries so long as they were in your vehicle at the time of the accident.
2. Uninsured Motorist Property Damage (UMPD). UMPD is the same as UMBI except it applies to property damage. If the other driver is identified and does not have liability insurance and if you do not have collision insurance, you can seek coverage for damage to your vehicle up to $3,500 (unless you have an applicable comprehensive and/or collision described below).
3. Underinsured Motorist (UIM) for Bodily Injury. UIM will help cover the costs of your bodily injuries if the at-fault driver’s insurance is not enough to cover the costs. This coverage is limited and dependent on the amount you purchase.
Comprehensive and Collision Insurance (Physical Damage Coverages)
Physical damage coverages include comprehensive and collision. This insurance coverage is not required by law but most lenders and leasing companies require it when you lease or take out a loan to purchase a vehicle. Compensation via either of these types is based on the market value of your vehicle.
1. Collision insurance applies when your vehicle is damaged in a collision with another vehicle or object (e.g., tree, deer, building).
2. Collision Deductible Waiver is a protection plan that pays your deductible when the at-fault driver damages your vehicle and doesn’t have insurance.
3. Comprehensive insurance applies when your vehicle is damaged by something other than a collision but does not include mechanical breakdowns, maintenance needs, or general wear and tear on the car. Examples of qualifying causes of damage include arson, weather, vandalism, and theft.
4. Comprehensive Deductible Waiver is a protection plan similar to the Collision Deductible Waiver above, which however, applies to waiver of the deductible for comprehensive coverage.
Medical Payments Coverage
This coverage is very important for you and your passengers as it applies regardless of who is at fault for the accident leading to the injuries. Under this coverage, medical expenses are paid – for each injurer person – up to the limit that you have purchased (up to $1,000, $5,000, $10,000, even $25,000 and up, depending on your insurance company). You can request higher limits for a higher premium––up to $100,000. There can be one person or four people injured, and each can have medical expenses paid regardless of fault. For instance, let’s assume you were involved in a car accident, and you had 3 passengers in your car. If you had $5,000 Medical Payments Coverage at the time of the accident, your insurance company has to pay (whether you were at-fault or not) the medical expenses for each individual, up to $5,000 for each, namely $20,000 in total.
Endorsements
Endorsements are add-ons to an auto insurance policy. In other words, you can customize your auto insurance policy to include things like:
- Rental reimbursement for situations where you need a car while yours is in the shop for repairs;
- Roadside assistance or emergency road service coverage (e.g., flat tire service, fuel delivery, battery service, towing, lockout service, etc.);
- Insurance for equipment (e.g., custom wheels, a custom stereo system, etc.); or
- Insurance for business use (or commercial auto insurance) which is required for some drivers working for a Transportation Network Company (e.g., Uber and Lyft).
Personal Injuries & First-Party Insureds v. Third-Party Claimants
When it comes to car accidents and personal injuries, there is often some confusion about what it means to be a first-party or a third-party claimant. Part of this confusion simply comes from not understanding exactly which insurance company you should contact after an accident.
It’s important to understand that your auto insurance policy is a contract between you and your insurance company. As the insured or policyholder, you are the first party to the contract and the insurance company or other insurer is the other party to your contract. Insurance claims are usually referred to as first-party or third-party claims. Third parties are non-policyholders protected by the other driver’s liability insurance while first parties are protected by their own optional insurance coverage.
Third-Party Claims
Under third-party claims, a non-policyholder files a claim against another person’s liability insurance for damages and bodily harm caused by the insured. Third-party claims involve three parties:
- the policyholder;
- the insurance company; and
- the third party seeking damages for bodily harm or property damage resulting from the policyholder’s negligence, gross negligence, recklessness, or intentional act.
Here, the non-policyholder is not restricted to the terms of the contract between the policyholder and the insured. That means the third party can seek compensation not only for economic damages such as property damage and medical expenses, but also lost wages, loss of earning capacity, out-of-pocket expenses, pain and suffering, loss of enjoyment, or other types of non-economic damages.
So, if you are in an auto accident and another person or entity is at fault for it, you would file a claim with their insurance company. If there isn’t a just and fair settlement, you can file a lawsuit against the at-fault party, and sometimes against their insurance company as well.
The insurance company will only pay out up to the limit of the auto policy, but it will work hard to reduce or avoid any payouts altogether. That’s why it’s critical to hire a personal injury attorney. Insurer abuse has increased over the years; many of them simply don’t deal in good faith. If it’s just you against the insurance company, then the odds are they’ll take advantage of this through a denial or underpayment.
First-Party Claims
Under first-party claims, policyholders file claims with their own auto insurance company if they have purchased optional coverage like:
- UMC/UIM;
- Collision;
- Comprehensive;
- Medical payments; or
- Endorsements.
In first-party claims, the policyholder can only demand coverage according to the terms of the contract.
So, if you are in an auto accident and you purchased optional auto insurance, you may be able to file a claim with your own insurance company as well as the other party’s insurance company (if the other party was at fault for the accident). But like third-party claims, auto insurance companies are out for themselves and their bottom line. You may think because you are their client that they have your interests as their first priority––that just isn’t the case. They will abuse their power over their clients, and that abuse can materialize as denials or underpayments, too, just as in the case of third-party claims.
An Example of First- and Third-Party Claims
Imagine you have liability insurance as required by law but also have UMC/UIM insurance. You are driving along Highway 101 when the traffic slows suddenly and a car behind you slams into your vehicle. Your head snaps forward but other than that, the only damage is to the vehicle. It turns out, you have a bad case of whiplash that results in high medical bills. You file a claim with the at-fault party as a third-party claimant. The at-fault party’s insurance, which is only the minimum required by law, is not enough to cover your medical bills. So, you also file a UIM claim with your own auto insurance company as a first-party claimant.
These types of cases, however, can become tricky. Consider for example when a third-party claim is settled for less than the limit or goes to litigation, making it uncertain how much a first-party claim might be worth. Ann demands $15,000 in bodily injury damages from the at-fault party’s insurance company and another $5,000 from her UIM coverage, but the at-fault party’s insurance company is willing only to settle for $10,000. Insurance companies communicate with each other, and so this could upset the first-party claim of $5,000.
Retain a Smart, Resourceful Personal Injury Attorney in Los Angeles
When you are injured in an auto accident, you may have options with regard to first-party or third-party insurance claims. It is important to seek legal counsel to make sure you are not unjustly treated and maximize your chances of just and fair compensation. You can contact us to learn more about how we can help you find the right personal injury attorney in Los Angeles.
