Insurance Coverage Recommendations from Schurmer Reese Davies

Many of our clients come to us without adequate automobile and homeowner's insurance coverage. California law requires that everyone purchase automobile liability insurance. However, the minimum level of coverage imposed under the law is often not adequate to cover the losses or protect us from claims. Purchasing the right amount of coverage protects you against a loss to your dwelling, personal property, and vehicle. It also provides protection from claims made by third parties for any negligent acts committed by you, someone in your household, or permissive users of your car.

Schurmer Reese Davies aims to educate our clients and friends on the appropriate amount of insurance coverage to protect both the individual and their family. People typically don’t understand how important it is to carry proper insurance limits until it’s too late—often when they’ve been injured in an accident and find they are not adequately insured. We aim to help you and your family have the coverage you need to protect yourselves.

As a general rule, your liability insurance coverage should be three times your household’s net worth. The higher your liability insurance limits, the less likely your personal assets are at risk due to your negligence. The coverage limits listed below are higher than the minimum coverage the law requires and is a good starting point for most households:

• $100,000 per person Bodily Injury Liability
• $300,000 per accident Bodily Injury Liability
• $100,000 Property Damage Liability
• $25,000 Medical Payments Benefits
• $10,000 Loss of Income Benefits (If available)
• $100,000 per person Uninsured/Underinsured Motorist Bodily Injury Liability
• $300,000 per accident Uninsured/Underinsured Motorist Bodily Injury Liability
• $50,000 per accident Uninsured/Underinsured Motorist Property Damage Liability

However, we highly recommend the following coverage for better protection:

• $250,000 per person Bodily Injury Liability
• $500,000 per accident Bodily Injury Liability
• $250,000 Property Damage Liability
• $50,000 or Maximum Coverage Available - Medical Payments Benefits
• $10,000 Loss of Income Benefits (If available)
• $250,000 per person Uninsured Motorist Bodily Injury
• $500,000 per accident Uninsured Motorist Bodily Injury Liability
• $100,000 per accident Uninsured/Underinsured Motorist Property Damage Liability

You can also purchase $1,000,000 in personal liability umbrella coverage and $1,000,000 of additional uninsured/underinsured motorist bodily injury coverage for very little cost, relative to the coverage provided. Liability coverage is important to protect you from any claim that a third party may make against you. Uninsured/underinsured motorist liability coverage is important because it allows you to make a claim against your own policy if a defendant does not have insurance coverage or may not have adequate insurance coverage.

Uninsured/underinsured (UM/UIM) motorist coverage is just as important to you as liability insurance coverage and you should purchase as much UM/UIM coverage as you can afford. There are two types of UM/UIM coverage available under California Law, typically known as “add-on” or “set-off” UM/UIM coverage. Under add-on coverage, your UM/UIM limits of coverage are added on to the coverage available from the at fault party. Under set-off UM/UIM coverage, the at fault party’s liability coverage is subtracted from your UM/UIM limits to calculate the amount of available UM/UIM coverage. Add-on UM/UIM insurance provides the best possible coverage for you.

Medical Payments coverage will pay for any treatment costs related to injuries you suffer in a motor vehicle accident as a driver or passenger. This coverage is very important, especially if you do not have health insurance, or you have high annual co-pays or deductibles under your Health Plan. Loss of income benefits are important because it allows you to recover for loss of income immediately, rather than having to wait until the time of settlement or judgment against the at fault party.

If you own a home or you are renting a home or apartment, you should purchase liability insurance coverage with your homeowner's/renter's policy. We suggest the minimum coverage of $250,000 single limit but prefer coverage of $500,000 single limit. Additionally, we suggest the purchase of the maximum medical payments coverage available. Also, we suggest that you insure the structure and contents to 100% of replacement cost.

You may require other types of insurance coverage not mentioned in this article. To make sure that you are adequately insured, you should consult with an insurance agent and you should review all of your policies and their coverage limits at least annually. Please do not hesitate to reach out to a member of our firm to have any additional insurance-related questions answered.