Auto Insurance
"Automobile insurance is an often misunderstood insurance product. Since the Department of Motor Vehicles (DMV) requires liability insurance in order to register and operate a vehicle, it is of great importance to purchase and to fully understand your automobile insurance policy.
Automobile insurance is simply a contract that helps pay for certain types of financial losses or obligations resulting from the use or ownership of an automobile. To obtain this contract (insurance policy), you pay a specified amount of money called a premium. In return for the premium paid, the insurance company agrees to pay certain expenses and legal liabilities depending on the terms of the insurance policy. Having the right insurance coverage may prevent you from suffering a large financial loss in the event of an automobile accident.
The responsibilities of owning and driving an automobile include following the financial responsibility laws under the Vehicle Code. The most common way to satisfy the financial responsibility for operating an automobile in California is by purchasing automobile liability insurance.
If you choose to meet your financial responsibility by purchasing liability insurance, the DMV outlines minimum limits that you must purchase under Section 16451 of the Vehicle Code.
Financial Responsibility Laws
The statutory minimum limits of liability insurance in California* are as follows:
Bodily Injury Liability
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. With the increased cost of hospital stays, medical care, and car repair, it may be well worth considering the extra premium to purchase higher limits of coverage.
Why Should I Shop Around for Automobile Insurance?
Under California's premium rating law, each insurance company is allowed to calculate its own rates based on its past loss experience and expenses. Since each company's experience will differ, even within the same geographic area, the rates will therefore differ. By calling several companies, or brokers/agents for a rate comparison, you can potentially save money. You will then be able to choose the company with the best available price and coverage to suit your individual needs. There are many sources you can contact to evaluate policies and premiums. Your local telephone directory and the Internet can provide names and telephone numbers for the following organizations:
Selecting a Broker-Agent
Choosing a qualified, professional insurance agent can be as important as choosing your doctor, your accountant, or any other professional upon which you rely. If you are selecting an agent or broker for the first time, your best resources are your relatives, neighbors, co-workers, as well as professional broker-agent associations.
When selecting a broker-agent, you may wish to verify the producer's licensing status with the California Department of Insurance (CDI). You can check a producer's license on the CDI's Web site www.insurance.ca.gov, or you can reach our Department at the contact information given under the "Talk to Us" section at the end of this brochure.
CDI's Producer Licensing Bureau is responsible for issuing insurance licenses and administrating continuing education requirements for producers. As of January 1, 1997, all agents are required to include their license number on business cards, premium quotations, and printed advertisements. This will enable you to check the status of their license with our Department.
The following are excellent questions to ask your relatives, neighbors, or co-workers about their producer when selecting someone to protect you, your family, and your assets from a potential financial loss:
**Broker fee disclosure and agreement**
To charge a broker fee, a broker must have you sign a broker fee agreement, and must give you a special broker fee disclosure. Be sure to read and obtain copies of both of these documents.
(read more here...www.insurance.ca.gov)
Automobile insurance is simply a contract that helps pay for certain types of financial losses or obligations resulting from the use or ownership of an automobile. To obtain this contract (insurance policy), you pay a specified amount of money called a premium. In return for the premium paid, the insurance company agrees to pay certain expenses and legal liabilities depending on the terms of the insurance policy. Having the right insurance coverage may prevent you from suffering a large financial loss in the event of an automobile accident.
The responsibilities of owning and driving an automobile include following the financial responsibility laws under the Vehicle Code. The most common way to satisfy the financial responsibility for operating an automobile in California is by purchasing automobile liability insurance.
If you choose to meet your financial responsibility by purchasing liability insurance, the DMV outlines minimum limits that you must purchase under Section 16451 of the Vehicle Code.
Financial Responsibility Laws
The statutory minimum limits of liability insurance in California* are as follows:
Bodily Injury Liability
- $15,000 for death or injury of any one person, any one accident.
- $30,000 for all persons in any one accident.
- $5,000 for any one accident.
- The maximum limit for one person's injuries, medical expenses, etc. is $15,000 under the bodily injury portion;
- If two or more people are injured, the maximum limit for the accident will be $30,000;
- The maximum limit for damage to other people's property (their car, their fence, etc.) is $5,000.
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. With the increased cost of hospital stays, medical care, and car repair, it may be well worth considering the extra premium to purchase higher limits of coverage.
Why Should I Shop Around for Automobile Insurance?
Under California's premium rating law, each insurance company is allowed to calculate its own rates based on its past loss experience and expenses. Since each company's experience will differ, even within the same geographic area, the rates will therefore differ. By calling several companies, or brokers/agents for a rate comparison, you can potentially save money. You will then be able to choose the company with the best available price and coverage to suit your individual needs. There are many sources you can contact to evaluate policies and premiums. Your local telephone directory and the Internet can provide names and telephone numbers for the following organizations:
- Independent insurance brokers/agents;
- Company agents who represent one company;
- Direct writers: insurance companies that sell direct to the public;
- Web sites.
Selecting a Broker-Agent
Choosing a qualified, professional insurance agent can be as important as choosing your doctor, your accountant, or any other professional upon which you rely. If you are selecting an agent or broker for the first time, your best resources are your relatives, neighbors, co-workers, as well as professional broker-agent associations.
When selecting a broker-agent, you may wish to verify the producer's licensing status with the California Department of Insurance (CDI). You can check a producer's license on the CDI's Web site www.insurance.ca.gov, or you can reach our Department at the contact information given under the "Talk to Us" section at the end of this brochure.
CDI's Producer Licensing Bureau is responsible for issuing insurance licenses and administrating continuing education requirements for producers. As of January 1, 1997, all agents are required to include their license number on business cards, premium quotations, and printed advertisements. This will enable you to check the status of their license with our Department.
The following are excellent questions to ask your relatives, neighbors, or co-workers about their producer when selecting someone to protect you, your family, and your assets from a potential financial loss:
- Have they had a recent claim?
- How did the producer and/or the insurer respond to the claim?
- Has the producer been courteous and prompt in responding to their questions and changes to their policies?
- Did the producer take the time to fully explain the terms and conditions of their policies?
- Does the producer periodically contact them to update coverage?
**Broker fee disclosure and agreement**
To charge a broker fee, a broker must have you sign a broker fee agreement, and must give you a special broker fee disclosure. Be sure to read and obtain copies of both of these documents.
(read more here...www.insurance.ca.gov)
For more information or to get a quote, contact us here.
