Multiple reasons, including government-related factors, the economy, and other things, have caused rates to go up. The Covid-19 virus, market impact, supply chain issues, legislative changes, and increased claims are causing the rate increases.

One reason for the increases is the new liability minimums.

These new insurance minimums, set to take effect next year, are at the forefront, driving these rising rates. Newsom signed SB 1107 into law in September 2022. The bill increases the state’s low auto liability limits, which are some of the lowest in the country. This change comes 50 years after lawmakers set the original minimums in place, and only after much discussion and amendment. Current liability minimums are 15/30/5. If you’re not sure what that means, don’t worry! Let’s break those numbers down. If you were to get into an accident, your insurance covers the other person’s passengers up to $15,000 or $30,000 for bodily injury or death. On top of that, your insurance covers their car or affected property just up to $5,000 per accident. Under the new law, the minimums would rise to 30/60/15, which translates to $30k per person or $60k maximum for bodily injury or death and $15k for property damage. Because the minimums are higher, you may see your rates going up. Don’t panic; we got your back. Here are a few tips to save money while maintaining coverage:

You might wonder why the limits need to go up... It’s complicated, but we’ll try to explain.

One of the reasons that insurance is going up is due to the economy. The cost of cars, goods, services, and even medical care have all gone up thanks to inflation. This means it’s more expensive to get repairs done, the parts are at an all-time high, and the cost of medical care and all that’s involved there are also pretty pricey. (More on this in a later blog). Second, California is a fault-based insurance state... but how does fault-based insurance work? If you crash and it results in an injury or loss to the other person, that person submits a claim to your insurance company. Your insurance company can then choose to investigate to figure out if you were really at fault/are to blame for the other person’s injuries and losses. If your insurance determines that the claim is valid, they’ll pay them out according to your policy limits. But worst of all: the other party can pursue legal action if they’re unsatisfied with how insurance handled things. Even, unfortunately, if you’re not at fault. This can mean having to pay for damages if the courts don’t favor you. Although the rising liability coverage limits can be initially frustrating for drivers, especially if you end up having to pay a higher premium, it’s not without its benefits.

Think about it like this: these coverages are the only protection you have against out-of-pocket expenses for damages, injuries, repairs, and medical care... which the current minimums no longer provide.

As a consumer, understanding these factors is key to managing the cost of insurance. After all, staying up to date on the law is vital in staying within compliance. Our goal is to empower you with this information, helping you find coverage that fits your budget.

As a consumer, understanding these factors is key to managing the cost of insurance. After all, staying up to date on the law is vital in staying within compliance. Our goal is to empower you with this information, helping you find coverage that fits your budget. Our job as agents is to inform you about changing limits and to provide guidance. As these new minimums go into effect, we want to assure you that you’ll be able to lock in your current rates IF you renew your policy with one of our exclusive programs. The state’s liability minimums are going to change... that’s just a fact. Now, it’s a matter of bracing for impact and softening the blow to our wallets. Consumers and agents should collaborate to find tailored solutions within their budget. If shoring back coverage or services is necessary, then so be it. Insurance isn’t a one-size-fits-all game—one driver’s absolute must-have coverage could be a complete luxury to another. Because these needs vary from driver to driver, it’s best to reach out to your agent to discuss your options ASAP so that you can work towards saving money in the long run. The sooner you get in touch, the better: time is running out, but if you act today, you can guarantee your current rates and stave off the increase in the minimums for just a little longer. How? By locking in your rates by changing your current policy to one of our exclusive programs. We know these upcoming changes can be overwhelming, but we’re here to support you, answer questions, and quell any doubts that you may have. Call up or reach out through our chat and our agents will get in touch to go over your options. To find out how Adriana’s Insurance Services can help you drive safely, visit our website or call us at 1-800-435-2997.

We got you covered!