The Limit Tested by Ordinary Accidents

Most conversations about minimum coverage focus on the injury limits, because injury is the frightening part. The arithmetic of everyday driving points somewhere else: the limit you are most likely to actually reach is the property damage one, and it is the one people examine least.

Frequency versus severity

Serious injury accidents are, thankfully, uncommon relative to the number of collisions that happen. Collisions that damage vehicles without seriously hurting anyone are not uncommon at all — they are the ordinary texture of driving in traffic.

So the exposure profile of a minimum-limits policy looks like this: the injury limits protect against a rare and severe event, while the property damage limit protects against a common one. Both matter. Only one of them is likely to be tested in a given decade of driving.

What has changed underneath the number

The property damage figure is fixed in statute at 15,000 dollars under Insurance Code section 11580.1b. It does not adjust for anything. Meanwhile the cost of putting a damaged vehicle back on the road has moved, for reasons that have nothing to do with insurance:

• Driver-assistance sensors and cameras that require recalibration after ordinary bumper work
• Lighting assemblies that are integrated rather than replaceable in parts
• Materials and construction that require specialist repair
• Higher vehicle values generally, which raises what a total loss is worth

We are not going to attach figures to any of that, because we would be making them up. The direction is not controversial, though, and it is the direction that matters here.

The total-loss case

When a vehicle is damaged badly enough that repairing it is uneconomic, the claim is measured against the vehicle's actual cash value. If you are at fault, the value being measured is theirs, not yours. Driving an inexpensive car does not reduce this exposure at all — it is entirely determined by what you happen to hit.

That is the point that changes people's minds most often in our office. Drivers assume their exposure scales with their own vehicle. It scales with everyone else's.

The multi-vehicle version

The property damage limit is a per-accident total. A chain-reaction collision that damages three vehicles shares one limit between them. Freeway driving in California makes that a realistic scenario rather than a hypothetical one.

What to do about it

The single most useful action available to a minimum-limits policyholder is to ask what raising property damage alone costs. It is typically the least expensive of the three limits to increase and it addresses the exposure most likely to arrive.

Direction, not a price — your own number depends on your record, mileage, vehicle and carrier, and the only way to know is to ask.

1. Find your current property damage limit on the declarations page.
2. Ask for the cost at the next two steps up.
3. Decide with the numbers in front of you.

We will run those figures alongside your current coverage so the comparison is concrete rather than theoretical.