Driving your car without insurance may look like a good idea until you’re affected by California Prop 213.
Let’s look at how car insurance can help you drive with peace of mind.
How much car insurance liability should you take?
Because State requirements for car liability insurance are typically low, they can leave you at the risk of open lawsuits if you have limited insurance. Always have liability insurance that is higher than the State minimum to avoid underinsurance.
Besides, where you’ve got assets to protect from lawsuits, such as investments, you need a higher level of coverage. The reason is that you become a lawsuit target if your income and assets have more value. So, in this case, it’s always the best decision to have high liability insurance.
What are other coverage types available?
To have comprehensive auto insurance, you may also consider other coverage types, namely collision and comprehensive coverage, uninsured motorist coverage, and umbrella insurance coverage. Let’s dive into each one.
Collision and comprehensive
A wide array of problems can cause serious damage to your car, such as severe weather conditions, fire, vandalism, and crashes with animals or other objects. If you already have collision and comprehensive coverage, it’ll pay for repairs to your car.
Uninsured motorist coverage
If you’re injured by a driver who has little or no liability insurance, you can seek an insurable claim from uninsured motorist coverage (UM). It’ll take care of your medical bills when someone else causes an accident, but they’ve no insurance or not enough to cover your bills. Should you experience a loss of income such as wages resulting from the accident, UM will also come in handy by cushioning you against the loss.
Umbrella insurance coverage
This type of insurance coverage will help you when you need an extra layer of liability insurance above your auto and homeowner’s insurance. If you’re involved in a devastating accident, the umbrella insurance coverage will offer you increased range.
What penalties can I face If I drive a car without insurance?
For starters, it’s unlawful in most states to drive your car without liability insurance. The State’s law requires car owners to have a minimum amount of insurance coverage. In case you drive without insurance, and you’re caught red-handed, here are the penalties.
The first offense is a $100 to $200 fine plus penalties. A second offense is within three years of the first offense: $200 to $500 plus penalties.
When Can Your Car Insurance be canceled?
In California, there are several reasons for which your car insurance can be canceled.
- You skipped paying your car insurance bill.
- Your driver’s license was suspended or revoked while your policy was still active.
- You made a false insurance claim.
You gave misleading information about you, your household members, or any person who regularly drives your car. Following are the details you may have misrepresented.
- Driving record
- Annual miles that were driven in past years
- Numbers of years of driving experience
- Previous car insurance claims
- Any factor discovered by the Insurance Commission to cause a considerable risk of loss