As with most states, California state car insurance law requires all drivers to carry 3 fundamental liability components.

Bodily Injury Liability or BIL of $ 15,000 per person

Total Bodily Injury Liability of $ 30,000 / accident

Property Damage Liability (i.e. PDL) of $ 15,000 / accident

Your insurance agent calls this 15k/30k/15k.

But please understand that to rely on this coverage alone, would be asking for trouble. Multi-car collisions & legal fees commonly boost the cost of an automobile accident into the hundreds of thousands of dollars. If you are at fault and you have gone with the minimums, you personally, must cover the shortfall. So, you must sell your house, empty your bank account and probably alot more…how does that sound?

Based on experience, I strongly suggest a bare minimum of 100/300/100 and more if you’re often on the road…particularly in the many elite communities of the Golden State. Spending a few extra bucks here is money well spent.

Thus far, we have discussed only liability insurance which doesn’t cover your injuries and damages to your car. The remainder of what we will discuss is not mandatory under California law.

First, let’s think about you. Personal Injury Protection (PIP) provides injury, death and disability coverage for you & your passengers. I suggest PIP coverage of no less than $ 100,000.

Next, your vehicle. To most people, having both collision and comprehensive insurance is known as full coverage.

Collision insurance has a two-fold purpose; to cover the repair cost of your damaged vehicle or, if “totaled”, to make a monetary settlement. You will pay for a pre-specified deductible amount and your insurer will pay for the balance.

Comprehensive covers your car for theft and vandalism and damages caused by fire, animal impact and acts of God.

Another important coverage is protection against uninsured or underinsured drivers. You are not at fault, but he can’t or won’t pay. Your uninsured motorist coverage steps in.

Southern California auto insurance may offer “Pay-per-mile”.

California’s Insurance Board has put forth a proposal to allow insurers to charge consumers based on miles traveled. Just like buying prepaid minutes for your cell phone…you would pay in advance for a specified number of miles to be traveled in a fixed period of time. A device installed in the automobile will allow the insurance company to monitor a car’s mileage and charge appropriately.

Consumer advocacy groups are supporting the proposal because paying for miles actually driven (instead of an insurance company’s estimate) should provide savings to low mileage drivers.

And maybe more importantly, the plan will act as an incentive for drivers to stay off the pavement. Environmentalists say this type of auto insurance in La Mesa and other California cities will encourage motorists to drive less…meaning lower fuel usage, reduced pollution and less congestion on the road.

The plan looks like an all around winner to me.