car insurance: liability limits (loan, lawyers, purchasing)

[max.b]

I thought CA had a law that limited the maximum liability in an accident to the same amounts that were the statutory minimum limits of liability insurance:

• Bodily injury $15k per person, $30k per accident
• Property damage: $5k per accident

In other words, as long as you stay in CA, it doesn't make sense to carry higher insurance, since your liability is limited by law anyway.


So I was surprised to find the following on the DMV web site:

"Since you may be personally responsible for damages above the policy limits, you should consider purchasing liability insurance with higher limits than the minimum required by law."


How could you be personally responsible for damages above the policy limits if your liability is limited by law?

[cb73]

Where are you seeing that there's a maximum liability? I'd not heard of that before.

[NoMoreSnowForMe]

I've never heard of there being a maximum someone could collect. Just that you have to carry at least a minimum amount set by law.

I suppose you might as well think of it as a maximum, too, though, because if someone can't afford more than the minimum, you probably would never collect more than that from them anyway.

[NinaN]

But if you have any assets, you risk losing them if you cause an accident and have minimum liability. Which is why we have very high liability $500K and umbrella. Believe it or not, people here in CA sue a lot.

[ferretkona]

When you regularly drive next to vehicles that cost $100,000 plus you need to cover your butt. One accident and you can find yourself in court handing over the keys to your home. A policy with $100,000 limit only costs about $20 more a year.

[max.b]

To all: Just because you hadn't heard of a law until now doesn't mean that there isn't one, and the person emphasizing the difference between two concepts probably isn't the one confusing them.

My guess is that higher-limit policies are so cheap because they either never pay (total scams), or they pay in other states with different limits (if they exist), or they pay in astronomically rare multi-accident scenarios: if you get in 10 major separate accidents before your car dies, you get detained or your insurance gets cancelled, that $300k limit may come in handy.


Vehicle Code, Section 17151: Limitation of Liability of Owner Bailee or Representative

17151. (a) The liability of an owner, bailee of an owner, or personal representative of a decedent imposed by this chapter and not arising through the relationship of principal and agent or master and servant is limited to the amount of fifteen thousand dollars ($15,000) for the death of or injury to one person in any one accident and, subject to the limit as to one person, is limited to the amount of thirty thousand dollars ($30,000) for the death of or injury to more than one person in any one accident and is limited to the amount of five thousand dollars ($5,000) for damage to property of others in any one accident.

(b) An owner, bailee of an owner, or personal representative of a decedent is not liable under this chapter for damages imposed for the sake of example and by way of punishing the operator of the vehicle. Nothing in this subdivision makes an owner, bailee of an owner, or personal representative immune from liability for damages imposed for the sake of example and by way of punishing him for his own wrongful conduct.

Amended Ch. 862, Stats. 1967. Operative July 1, 1968. Supersedes Ch. 702.

[Curmudgeon]

What you just posted only pertains if you're dead. It doesn't do a thing for you if you live. In CA the minimum we used to carry was $100,000/$300,000 along with a one million dollar personal liability umbrella policy. We still carry that even here in the boonies where people aren't nearly as litigious as in CA..

Scams? No, reality!

Cheap isn't necessarily the best policy.

[max.b]

I researched this a bit further. I am not a lawyer, obviously. Interpret at your own risk. It's possible that you might be liable separately as an "owner" and as a "driver". I don't know for sure. I think the laws are written by lawyers with the sole intent of keeping their own profession in business.

[Curmudgeon]

Originally Posted by max.b

I researched this a bit further. I am not a lawyer, obviously. Interpret at your own risk. It's possible that you might be liable separately as an "owner" and as a "driver". I don't know for sure. I think the laws are written by lawyers with the sole intent of keeping their own profession in business.

I'll take my chances. I wrote law for the state for about 20 years. Mine was clear and unambivalent. No wonder the lobbyists disliked me. No wiggle-room!

Are you here to ask or here to argue?

[max.b]

So I loan a car to a friend, she causes an accident. Do I understand it correctly that she's liable, but if she can't be sued, or doesn't have enough money, I'm also liable, but only up to $30k/$15k/$5k?

I think a lot of people borrow cars (or test-drive cars at the dealership, say) without realizing that the insurance covers the owner, no the operator.

Do I understand this correctly?

V C Section 17152 Liability of Operator


Liability of Operator

17152. In any action against an owner, bailee of an owner, or personal representative of a decedent on account of liability imposed by Sections 17150, 17154, or 17159 for the negligent or wrongful act or omission of the operator of a vehicle, the operator shall be made a party defendant if service of process can be made in a manner sufficient to secure personal jurisdiction over the operator. Upon recovery of judgment, recourse shall first be had against the property of the operator so served.




Amended Ch. 702, Stats. 1967. Effective November 8, 1967.


V C Section 17152 Liability of Operator