Readers should put money aside because residents of Pasadena and the greater San Gabriel Valley will likely be paying more for automobile insurance premiums in 2025.
Currently, drivers are required to purchase policies with 15/30 bodily injury liability policy limits; however, in 2025, because of the passage of SB 1107, they will be required to buy policies with 30/60 limits or greater.
A 15/30 limit means that if a claim is brought against the auto insurance policyholder, then the insurance company can only pay the claimant up to $15,000 per person and $30,000 per accident. Under a 30/60 policy, the insurance company can pay the claimant $30,000 per person and $60,000 per accident. If the claimant were to seek more money from the claim than the policy limit, then they would usually have to collect from the policyholder’s assets through wage garnishment, bank levy or seizure of property.
Will the change really affect local residents?
Our educated guess would be “probably yes.”
There is little to no data about how many residents of Pasadena and the San Gabriel Valley currently have 15/30 policies. But today, people who purchase more than 15/30 policies usually have higher incomes and more assets to protect.
The California Department of Insurance estimates that approximately 26 percent of California drivers overall have 15/30 policies, and 14 percent of drivers are uninsured. This means 40 percent of drivers you are likely to encounter have either 15/30 policies or nothing at all.
Compared to other areas of California, residents of the greater San Gabriel Valley are considered “upper middle class.” Recent data suggests that the estimated median household income in Pasadena is $95,134, the median rent is $1,985, and 59.5 percent of homes are worth $1,000,000 or more.
The local data is even more interesting when compared to California overall. The median household income in California is $91,551, which is slightly lower than in Pasadena; however, the median rent is $1,870, and only 28.3 percent of all homes are worth $1,000,000 or more in California.
While the statistics are similar, the value of an asset like a house is much greater in Pasadena than in California overall. If 40 percent of people in California have either 15/30 policies or nothing at all, then it seems likely these statistics would be roughly equal in Pasadena.
Insuring for the reality on the road
Even though many local residents will be forced to pay more for their premiums, claims will more likely be covered by at-fault drivers. In other words, there are many situations where medical bills might be paid for when otherwise they would not. With somewhere between 600 to 950 auto accidents per year in Pasadena, one or two out of every 100 Pasadena residents will be involved in an automobile accident next year.
While requiring 30/60 limits might be a change in the right direction, an even better move may be for drivers to also purchase 30/60 uninsured motorist coverage (UIM).
This kind of bodily injury coverage comes into play when a driver has no insurance or the opposing driver’s limits are not high enough. This is because, as we said, 14 percent of drivers have no insurance at all. As UIM is typically inexpensive, the out-of-pocket cost would be comparable to the current change, but at a much lower premium rate.
