Auto insurance definitions
Bodily injury liability
Liability coverage is mandatory if you own a car in California. This coverage pays for costs associated with injuries to the other person or people involved. It also provides a legal defense in the event that you are sued for damage. The state minimum limits are 15/30, which can also be read as:
- $15,000 bodily injury coverage per person
- $30,000 bodily injury coverage per incident
We always suggest going higher than the minimum. If damages to the other party exceed this amount, you would be responsible for covering what remains.
Collision + comprehensive is referred to as 'full coverage'. If you have collision coverage, if you are in an accident or collide with another vehicle / property, you will have coverage to fix the vehicle after paying a deductible. Collision and comprehensive are not required by the state, but they may be required by your loan company or leasing company.
It covers for your car in case of natural disaster, vandalism, theft, fire, falling tree branch, or hitting a deer (this one is randomly under comprehensive instead of collision). Glass is also covered here. This coverage is also known as 'comp' or 'other than collision'.
Loan/lease gap coverage
By adding this coverage on, the insurance company will pay for the difference between what you owe on your vehicle and what your insurance pays if your vehicle is declared a total loss.
i.e. You owe $15,000 on your new Toyota, but your car is now only worth $10,000. If your car is totaled, or stolen and unrecovered, you might get a settlement check from the insurance company of $10,000 (the actual cash value of the vehicle), but you still owe an additional $5,000 on your loan or lease. If you have loan/lease gap coverage, this is when it would kick in.
It can help cover accident-related medical expenses for you or your passengers. Consider your health plan: if you have a good health insurance plan, you may not need all the features of medical payments coverage on an auto insurance policy.
Original equipment manufacturer (OEM)
If you want your Mini Cooper to have original Mini Cooper factory equipment put in after an accident, you will want to add this coverage. Without OEM coverage, most insurance companies use after-market parts (not that this is bad--these certified, often equal in quality, and guaranteed by the insurance company). This coverage is only offered by a few carriers.
Rental car reimbursement
If your car is in the shop after an accident, your policy will give you a rental car while your car is getting fixed. You need to have comprehensive and collision on your policy in order to add rental car coverage.
Roadside assistance and towing coverage
Collision + comprehensive cover the vehicle if damaged, but it does not cover the transportation of the vehicle to the repair shop, which can get pretty expensive. Emergency roadside assistance and towing coverage would work at this time and can be added to your auto policy in most cases. It will help with gas fill-ups, battery jumps, tire changes, and towing. Make sure to check if you have basic towing (up to 15 miles) or extended towing (up to 100 miles).
Property damage liability
When you are found at fault after a car accident, property damage liability is what pays for costs associated with repairing or replacing another person's property (i.e. the other person's car, a pole, or a street divider). The state minimum limit is $5,000, however, we suggest going higher than the minimum. If you have a $5,000 coverage limit, if costs go above this limit you would be responsible for covering what remains.