Before the age of online convenience, most people met with a broker before purchasing any kind of insurance policy. One of the roles the broker filled was they advised policyholders on what could happen if they did not have enough coverage.

Unfortunately, with the proliferation of online auto insurance, many drivers purchase insurance plans without consulting with a broker and often select policies with lower policy limits simply to satisfy the requirement of having car insurance. What they may not realize is that being underinsured can be just as harmful as being uninsured and can jeopardize both their financial security and their family’s future.


Car crashes are an unfortunate fact of life. The average American driver will experience three car crashes in their lifetime (or a crash roughly once every 18 years). Even the safest driver who observes every rule of the road can be unexpectedly struck by someone who is reckless or intoxicated.

Whether you caused the crash or were struck by an uninsured driver, you may need to call on your insurance policy to cover the damages. The problem is that many drivers rely on minimum coverage policies, and California has one of the lowest minimum car insurance limits in the country.

These are the current policy minimums for California car insurance:

  • Bodily Injury: $15,000 per person / $30,000 per accident
  • Property Damage: $5,000 per accident

If a driver is seriously injured by an individual with $15,000 policy limits, the at-fault driver’s insurance will not fully cover a trip to the emergency room, much less aftercare or an extended hospital stay. If the injured driver also does not have adequate underinsured motorist coverage, they will be left largely uncompensated for their injuries, including for their medical expenses, lost wages, and pain and suffering.


When monthly premiums put a squeeze on personal finances, some drivers will switch to a policy with lower limits. What these policyholders often do not realize is how much this decision can cost them in the long run.

To illustrate: Juan wants to lower his premiums, so he swaps his $100,000 policy limits for $50,000 policy limits. Shortly after, Juan is at fault in a serious car crash. It is determined that the other driver has approximately $100,000 in damages, including for medical expenses, lost wages, and pain and suffering.

Since Juan’s $50,000 policy is inadequate to satisfy the other driver’s claim,, the other driver files a lawsuit against Juan (not his insurance company)to recover for his injuries. The driver may insist that Juan personally contribute money towards a settlement in addition to the $50,000 insurance. Additionally, if that driver obtains a $100,000 jury verdict, Juan could be personally liable to contribute $50,000 to satisfy the judgment. Juan’s decision to save a little in insurance premiums has placed at risk his savings and his personal property.

The lesson: the more assets you have, the more important it is to have ample policy limits, even if it means paying higher premiums.


There can be other serious ramifications when selecting a policy with low premiums and the other driver is uninsured or underinsured.

Whether the other driver has no policy or you are the victim of a hit and run, you will need to rely on your own insurance company and your own policy to cover the damages. This happens far more often than you might expect. In California, an estimated 16% of drivers are uninsured. That means you have a roughly 1-in-6 chance of making an uninsured motorist claim after a crash. While California insurance companies are required to offer uninsured motorist coverage, some drivers hoping for lower premiums waive this offer and put themselves at risk. These drivers may not be aware of the financial consequences of waiving uninsured motorist coverage. If you are injured by an uninsured driver and do not have uninsured motorist coverage, there will be no insurance whatsoever to cover your damages.

If the other driver has low policy limits that prevent you from recovering the full damages you are entitled to, that same uninsured motorist coverage can be used as underinsured motorist coverage. If you are seriously injured by a driver with minimum $15,000 policy limits and you have $250,000 underinsured motorist coverage, you will have up to $235,000 in coverage through your policy. On the other hand, if you had waived uninsured/underinsured motorist coverage, you will only be able to recover the $15,000 from the other driver.

When it comes to car insurance, it is better to be safe than sorry. The greater your policy limits, the more protections you will have between the other driver and your personal finances. Similarly, if you are ever in a crash where the at-fault driver is uninsured or underinsured, a skilled attorney can help you fight to secure the full damages you need to recover and move forward, particularly if you have protected yourself with large uninsured/underinsured motorist limits.

To schedule a free case consultation with an experienced Walnut Creek personal injury attorney from Casper, Meadows, Schwartz & Cook, please do not hesitate to give us a call at (925) 275-5592 or send us an email.