Understanding auto insurance claims in California

Anyone in California who holds a driver’s license should have a basic understanding of how their insurance policy works.

According to a report from Insure.com, California ranks seventh in the country when it comes to car insurance premiums. The average resident’s rate is $1,762. That is a lot of money to spend – especially when insurance companies have a tendency to try to shortchange policyholders.

Having a policy simply is not enough. People should understand what their policy means and how to ensure that following an incident, the company pays what it should.

What are my limits?

The limit on a policy lists the maximum amount the provider will pay out in the event of a car accident. The State of California Department of Motor Vehicles notes that every licensed driver in the state must have the following minimum limits:

  • $5,000 for property damage
  • $15,000 for one person’s injuries or death
  • $30,000 for injuries or death related to more than one person

The department reports that simply holding collision insurance does not meet the minimum requirements.

What happens after an accident?

When a car accident occurs, the person liable for the incident is responsible for paying for the damages. An insurance policy will cover the cost of property damage and injury, but only up to the policy’s limit amounts. When both parties are to blame, it is possible that the drivers will only be able to recover a portion of what the policy would otherwise pay out. Also, in some cases, the policyholder will be responsible to pay the deductible on the policy.

What if I think my insurance company is not paying my claim in full?

Holding an insurance policy is itself a promise that when someone is in an accident, there will be coverage. In other words, the company must act in good faith to pay the claim. Unfortunately, there is a phenomenon known as bad faith insurance in which the provider unduly denies a claim, does not commit to a thorough investigation, does not disclose all the benefits available or flat-out refuses to give someone the compensation to which he or she is entitled.

California law specifically prohibits these types of behavior as well as making it illegal for an insurance company to refuse to settle a claim and instead forcing someone to go to litigation.

Someone who believes this is taking place should seek help right away. Keep in mind that it is legal for an adjuster to disagree about what a claim should be worth. That can happen and may require the consumer to ask for a second opinion. However, if the adjuster or company is acting in bad faith, stronger recourse may be necessary.

People who have concerns about this issue should speak with a personal injury attorney in California.