Members of the general public generally believe that they can successfully file an insurance claim after any kind of major collision. For the most part, that is a reasonable belief. After all, California law requires every driver to either make a cash deposit with the Department of Motor Vehicles or carry liability insurance.
People assume that they can receive coverage that pays for the damage to their vehicle and their injuries, as well as any wages they cannot earn because of the crash. While those assumptions are theoretically reasonable, people may drastically overestimate what insurance can offer them after a collision. Compensation from insurance alone may not be enough to cover all of someone’s costs.
California’s requirements are surprisingly low
Many people do not buy insurance with the intention of protecting themselves but only out of a desire to follow state law. The amount of insurance required in California falls far below what a crash might actually cost. A driver only needs to have $5,000 in property damage coverage. While the state does require more bodily injury coverage, it is still not enough in many cases.
A crash where one person suffers injuries could lead to as little as $15,000 in available coverage. In crashes where two or more people end up hurt, a policy might offer just $30,000 in coverage. Such minimal policies may not be adequate for those with severe injuries. A crash involving multiple people with moderate injuries could also go well beyond what insurance could cover.
What happens when there are low policy limits?
Someone negatively affected by low policy limits does not have to accept major financial losses. They still have the option of pursuing more thorough compensation. Those who initiate personal injury lawsuits in accordance with California state statutes could seek full compensation for their economic losses after a collision.
While insurance is subject to policy limits based on the coverage someone purchased, a lawsuit can potentially lead to the courts granting someone full compensation based on the extent of the property damage and injuries generated by the collision. There might even be third parties, such as businesses, with some liability for a wreck that transpired. At the end of the day, realizing that insurance may not offer enough compensation may help people feel more comfortable with the idea of taking legal action after a California car crash.