Covered For What, Exactly?

"I'm covered" is the most common sentence in insurance and one of the least precise. A minimum-limits liability policy covers a specific set of things to a specific extent. Knowing where the edges are is the difference between confidence and a surprise.

What a minimum liability policy does cover

Injury and property damage you cause to other people, up to the limits set in Insurance Code section 11580.1b — 30,000 per injured person, 60,000 per accident, 15,000 for property damage. It also generally includes your insurer defending covered claims against you.

That is a real and valuable thing. It is also the entire list.

What it does not cover — the four gaps

1. Your own vehicle. At all.

Liability-only means exactly that. If your car is damaged in a collision you caused, damaged by weather, stolen, or destroyed by fire, a liability policy pays nothing toward it. Those are comprehensive and collision coverages, and a minimum liability policy has neither.

2. Anything above the limits

The claim does not stop at your limit; your insurer's payment does. Beyond it, the remainder is yours.

3. You, when someone else has no insurance

If an uninsured driver injures you, liability coverage does nothing — it covers what you cause, not what is caused to you. Uninsured motorist coverage is the one that responds, and it is frequently declined on minimum policies. Check your declarations page for a rejection.

4. Your own injuries generally

Your medical costs after an accident are addressed by health coverage, by medical payments coverage if you carry it, or by a claim against an at-fault driver. Your own liability coverage does not pay them.

Where the confusion comes from

Partly the phrase "full coverage", which is not a defined product but gets used as though it were. Partly the fact that a policy document says "auto insurance" at the top without qualifying what kind. And partly because a form asked whether you wanted the cheapest option and you said yes, which is a reasonable thing to say and does not sound like a coverage decision.

The five-minute audit

Take your declarations page and answer these:

1. What are my three liability figures?
2. Is there a comprehensive deductible listed? A collision deductible? If not, my car is not covered.
3. Does it show uninsured motorist limits, or a rejection?
4. Is there a medical payments limit?
5. Is there rental reimbursement or roadside?

Whatever the answers, you now know what "covered" means on your policy. Most people who do this find at least one line they did not expect.

What to do with the answers

Nothing, necessarily. Some of those gaps may be exactly right for your situation — an old car genuinely may not need collision. The point is that a gap you chose is a decision and a gap you did not know about is a surprise waiting to happen.

Send us the declarations page and we will read it back to you plainly, including which gaps we would leave alone.