Blog

Buying auto insurance can feel overwhelming, especially when policies are filled with fine print, confusing terminology, and options that aren’t always clearly explained. Many drivers assume they’re protected simply because they have a policy in place, only to find out after a crash that their coverage falls short when they need it the most. Choosing the right auto insurance is about more than meeting minimum legal requirements. It’s about making sure you have meaningful protection for real-world situations.  

This guide is designed to help you better understand what to look for when shopping for auto insurance and how certain choices can affect you financially after an accident. From coverage limits to deductibles and optional add-ons, taking the time to review your policy now can help you avoid costly surprises later and give you greater peace of mind on the road.   

If you have questions about your coverage or want help determining whether your policy truly protects you, contact our firm to speak with an experienced auto accident attorney.  

1. Coverage Amount

Insurance is supposed to help you and pay for damages and losses when you’re involved in a car crash or accident on the road.  Insurance can only really help if you have enough to cover the damages.   

By “enough,” we don’t mean “full coverage.”  There is a myth that many people believe “full coverage” is the most important thing to have with insurance.  However, coverage alone is not enough.  By “enough” we mean the dollar-limit of the coverages you have.   

For example, in California, the minimum liability coverage limits used to be $15,000 per person and $30,000 per accident.  Since January 1, 2025, under Senate Bill 1107, California increased the legal minimum coverage amount to $30,000 per person and $60,000 per total incident. 

Regardless of whether it’s $15,000 or $30,000 – it doesn’t take a lawyer to know that if you’re involved in a serious auto crash where you have ambulance bills, hospital bills, surgery bills, and are unable to work and start losing income – you need more insurance coverage.  

A second myth many people believe is that purchasing higher dollar limits becomes super expensive.  While it is true that buying higher dollar limits is more expensive, the cost increased per dollar becomes cheaper the higher you go.  In other words, buying $50,000 instead of $30,000 may raise your premiums by a couple hundred dollars, but buying $250,000 instead of $100,000 may actually only increase your premiums by $50-100.  

While every person has to balance the cost of the insurance with the amount of coverage, we believe that purchasing $100,000 per person insurance is a bare minimum to ensure you and your family have “enough” insurance to cover your damages in the event of a crash.  

2. UM / UIM Coverage 

According to a 2024 report from the Insurance Information Institute, roughly 20% of California drivers illegally have no auto insurance.  This means that if one of these illegally uninsured drivers hits you and causes a crash, the only insurance that can pay for your injuries and damages is your own.  

This means the one coverage that you do need to worry about is Uninsured Motorist Coverage (“UM”) and Underinsured Motorist Coverage (“UIM”).  While liability coverage will cover your own liability if you mess up and cause a crash yourself – UM and UIM is a backup coverage that will cover your own damages when the defendant doesn’t have enough insurance (because the defendant didn’t listen to my advice in #1, see above).   

The difference between UM and UIM is whether the Defendant has any insurance, or just crappy, low insurance.  UM “uninsured” means the Defendant was illegally driving with zero insurance.  UIM or “underinsured” means the Defendant did have insurance, but the coverage amount (again, see point #1 above) was too small to cover your medical bills, pain and suffering, lost wages, etc.   

For example, if you’re involved in a crash with a UM defendant (completely uninsured) and you have $100,000 in UM coverage, then you will have $100,000 to pay for your damages.  On the other hand, if you’re involved in a crash with a UIM defendant with the new California minimum limits of $30,000, then the Defendant’s insurance would cover the first $30,000, then your insurance would cover the next $70,000, up to your total UIM limits of $100,000.  Unlike many other states, California UM/UIM insurance does not “stack” on top of the Defendant’s insurance. 

3. Coverage Exclusions 

The third item is coverage “exclusions.”  An exclusion is the opposite of “coverage.”  Exclusions are things that an insurance company will specifically not cover in the event of a car crash.  While there are many exclusions, there are two that often come up. 

The first is exclusions for vehicles that are not listed on a policy.  When buying insurance, make sure to consider all vehicles you own.  For example, do you have an older vehicle in your garage that you hardly ever drive?  Do you have an ATV at your cabin that you only drive on vacations?  Did you just buy a new car since your last purchase of auto insurance? 

If you are involved in a car crash with a vehicle that is not specifically listed on your auto insurance, it is very likely that your own insurance will (rightfully) exclude any claims made for your vehicle repair bills, injuries, medical bills, or pain and suffering. 

The second is exclusions for people who are not listed on a policy.  While it is true that California often provides coverage for “permissive users,” if the driver lives with you and is not specifically listed on your auto policy, then they will likely be excluded from any coverage if that driver is involved in a crash with your vehicle.   

This means it is super important to consider all the people who currently, or may at some point, live at your address.  This often means family, children, parents, roommates, etc.  Make sure to add each person who lives with you (if you are ever going to let them drive your car) to your insurance policy.  

4. Deductible 

A deductible is the amount of money you are required to pay out of pocket before your insurance company steps in and pays the rest of a covered claim. For example, if you have a $1,000 deductible and $5,000 in vehicle repair costs, you pay the first $1,000, and your insurance covers the remaining $4,000.  

When choosing a deductible, most people focus only on cost. A higher deductible usually means a lower monthly premium, while a lower deductible typically increases your monthly payment. The key question is not which option is cheapest month to month, but whether you could realistically afford the deductible if a crash happened tomorrow.  

Car accidents are unexpected, and they often come with multiple expenses at once, like vehicle repairs, rental cars, missed work, and other out-of-pocket costs. If you select a high deductible to save a few dollars each month, but don’t have the savings to cover that deductible when you need it, you may find yourself in a financial bind at the worst possible time.  

A good rule of thumb is to choose a deductible amount that you could comfortably pay without having to use credit cards, loans, or emergency funds. Insurance should reduce stress after a crash, not create more of it.

5. Add-On Coverages 

Add-on coverages are optional protections that can be added to your auto insurance policy for a relatively small increase in cost. While not every add-on is necessary for every driver, many of them provide significant convenience and peace of mind when something goes wrong.  

One common add-on is rental car coverage. If your vehicle is damaged and needs repairs, this coverage helps pay for a rental car while your car is in the shop. Without it, you may be stuck paying out of pocket or scrambling for transportation.  

Towing and roadside assistance are other helpful add-ons. This can cover the cost of towing, jump-starts, lockouts, and flat tires. These services are often inexpensive to add and can save you from paying hundreds of dollars at an inconvenient moment.  

Medical payments coverage (often called “MedPay”) helps cover medical expenses for you and your passengers regardless of who caused the crash. This can be especially useful for covering co-pays, deductibles, or immediate medical treatment before liability is sorted out.  

While add-on coverages increase your premium slightly, they often provide added value in terms of convenience and reduced stress. The key is to focus on add-ons that solve real problems you would otherwise have to pay for out of pocket, and to skip those that don’t fit your lifestyle or needs.  

The right auto insurance policy isn’t about checking boxes. It’s about making sure you’re protected when it matters most. Taking a few extra minutes to understand your courage, limits, deductibles, and add-ons now can spare you from financial stress and hard choices later. If you’re unsure whether your current policy truly protects you and your family, it’s worth getting a second look before you ever need to use it.