In the process of understanding and purchasing automobile insurance there are several considerations that should be undertaken. The information provided below is intended to give general insight into some of the most important issues when choosing the right coverage and insurance company. The following items should be considered:
- What type of coverage do I need or want?
- Should I purchase automobile insurance through a broker or directly from an insurance company?
- The California Low Cost Automobile Insurance Program- Is it right for me?
- What can I do to keep my automobile insurance premium as low as possible?
- View a video introducing California's Low Cost Automobile Insurance Program
What Type of Coverage do I Need or Want?
Liability Coverage
When operating a motor vehicle, liability coverage is probably the most important coverage you will need. This is the only coverage legally required by the State of California when driving in order to meet financial responsibility laws. Liability coverage is also legally required to obtain and maintain valid vehicle registration through the Department of Motor Vehicles.
Comprehensive and Collision
If you are financing your vehicle through a bank or finance company you will be required by those institutions to maintain physical damage coverage. Comprehensive and collision coverage protects your vehicle from potential fire, theft, vandalism or accidental damage. When your vehicle is paid off and physical damage coverage is no longer required by your bank or finance company, you may or may not elect to continue with this coverage. In determining whether to maintain physical damage coverage once your vehicle is paid off, the following factors should be taken under consideration: the age and value of your vehicle, what you can comfortably afford to pay for a replacement vehicle without this coverage, and the personal sentiment you attribute to your vehicle. Although this coverage is necessary when financing and may or may not be carried once financing is completed, it is not a legal requirement by the State of California when operating your vehicle on the streets and highways.
Other Types of Coverage to Consider
Medical coverage
This coverage can pay for you and your passengers expenses associated with injuries endured as a result of an automobile accident, regardless of fault.
Uninsured/Underinsured Motorist
This coverage can pay for you and your passengers expenses associated with injuries endured as a result of an automobile accident with a driver who is either not insured, or has insufficient liability coverage limits to pay for your injuries.
Uninsured Motorist Property Damage
This coverage can pay for the damage to your vehicle as a result of an accident with a driver who has no liability insurance.
Rental Reimbursem*nt
This coverage can pay for the expense of renting a vehicle when there is a loss to your insured vehicle under your comprehensive and collision coverage.
For greater understanding of automobile insurance coverage, please review the Safer Driving For Mature Drivers brochure.
Should I Purchase Automobile Insurance Through a Broker, or Directly Through an Insurance Company?
Deciding to purchase automobile insurance through a broker or directly through an insurance company requires an understanding of what a broker actually does. An insurance broker acts as a "Middle Man" between you and the insurance company. The broker works with many insurance companies to find the very best policy and rate for you, the client. In doing so, a broker may charge a broker fee; these fees can vary. Brokers often charge fees for various other transactions associated with the handling of your policy. Using the services of a broker can save you the time and hassle in contacting different insurance companies for individual quotes on your own.
Purchasing insurance directly from the insurance company without the services of a broker can have its advantage. By doing so you can save money by avoiding the broker fee and other fees often associated with purchasing insurance through a broker. A little more effort on your part will be required, but savings can add up. Whether you chose the services of a broker or deal directly with an insurance company, make sure to first review the following information sources:
- Automobile Premium Comparison Survey
This survey compares the premiums between various insurance companies. - Consumer Complaint Study
This study ranks insurance companies by the number of justified complaints filed by consumers.
The California's Low Cost Automobile Insurance Program-Is it Right for Me?
The California's Low Cost Automobile Insurance Program was established by the California Legislature to provide low-income good drivers with the opportunity to purchase affordable liability insurance coverage. This program provides liability limits of $10,000 per person $20,000 per accident bodily Injury liability and $3,000 property damage coverage. The program is available throughout the State and costs less than $400.00 per year. There are a variety of payment options and you are guaranteed coverage if you qualify.
View a video introducing California's Low Cost Automobile Insurance Program (4min. 17 sec.). You will need to have QuickTime installed on you computer. Please follow the link to our Free Document Readersfor more information.
For additional information see California's Low Cost Automobile Insurance Program.
What Can I Do to Lower My Automobile Insurance Premium?
Want to save money? Here are some tips to help you keep your automobile insurance premium as low as possible:
- Always comparison shop, either through the broker you choose or the insurance companies you call directly.
- Consider higher deductibles when getting a new quote or renewing your existing insurance policy.
- Consider purchasing a vehicle that has a low profile, has lower cost to repair, or is listed as a vehicle that is least likely to be stolen.
- Consider if Collision and/or Comprehensive coverage on older cars is necessary.
- Ask your broker or insurance company agentabout multi-policy discounts.
- Consider taking a mature driver's course.
- Review the Automobile Premium Comparison Survey.
- Review the Consumer Complaint Study.
