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California Auto Insurance - Facts to Know

When buying California auto insurance, there are some things you should know to get the best possible policy at the cheapest rate. Like any other state, car insurance in California is available in many different packages with various types of coverage. With so many consumers buying car insurance online, it's easy to get confused. If you plan to compare online agencies, you must be sure the company offers coverage in your state and provides the type of coverage you need. Otherwise, you can easily compare companies locally to find one that meets your needs.

Know the Insurance Laws about Liability

California (and every other state) has its own laws concerning car insurance, so familiarize yourself with these before comparing agencies. Some things to know include the statutory minimum liability coverage limitation, how to obtain a certificate of self-insurance from the Department of Motor Vehicles in California (if you own a fleet of 25 or more vehicles), and what type of coverage is required from your lending institution.

The minimum limits of liability are required for all automobile drivers and/or owners. If you own a vehicle but do not drive it, you are still required to have liability insurance. There are stiff penalties for nonconformity to California car insurance laws. Also, having liability coverage protects you if an accident occurs that is deemed "your fault." If you don't have this coverage and damage someone's car or if someone becomes injured or killed, you will pay far more than the insurance premiums. It’s not worth the risk.

Coverage Not Required

Some types of coverage that are not required by California auto insurance laws include comprehensive coverage (for theft, weather-related damages, fires, etc.), uninsured motorist insurance, additional medical coverage, and collision. Collision coverage is often required by lenders if you buy a new or used car and finance it with a bank or other lending institution. Though these types of coverage are not required under California law, they are often well worth the investment on newer models, sports cars, or classic cars even if you don’t owe money on the vehicle.

Shopping for California Auto Insurance

When shopping for insurance, compare companies both locally and online. You can find great bargains on insurance by simply comparing car insurance agencies and what they offer. Consider the policies, types of coverage, and premiums for each. Ask about discounts and find an agency with affordable car insurance rates and a good, solid reputation.

If buying online, visit California-based discussion forums and ask around to get suggestions on online companies. Online car insurance agencies can sometimes offer better rates if they operate mainly online. They don't have to pay for fancy buildings or a very large staff, so they can pass these savings on to you. But on the other hand, you have to watch out for fly-by-night companies that promise the moon today, but are gone tomorrow.

You can easily check with the BBB (Better Business Bureau) Online if the company has been in business a while. When buying from a start-up company be prepared to switch quickly (or have a back-up plan) in case the company goes out of business

Get Everything in Writing

When buying any California auto insurance plan, be sure to get everything in writing. Ask for a copy of your complete policy and read it thoroughly to learn about the coverage. Also, obtain as much liability coverage as you can afford - better to be safe than sorry.

Before making your first premium payment, read your entire policy and ask plenty of questions. Some companies will require you to pay by direct withdrawal from your checking account or using recurring credit card billing. If this is so, be sure to get an exact date of payment in writing to avoid confusion.

Buying insurance is an important step both financially and legally, and should never be rushed. Knowing what you need is the first step to buying car insurance in California or any other state.

by Candice Pardue

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