Automobile Insurance Information Guide

(revised February 2018)

introduction to auto insurance

Auto insurance helps pay for injuries and damages that can occur when you own and drive a car or other motorized vehicle. This brochure can help you compare policies and make informed decisions when shopping for auto insurance. can help you understand your auto policy. Your policy is a legal document and it is important that you understand it. Your motor vehicle can be a car, truck, van, motorcycle, or other type of private passenger vehicle.

california law

You must demonstrate financial responsibility for any vehicle you own, in the event of injury to others or damage to your property. Most people show financial responsibility when purchasing auto liability insurance. California law states that “all drivers and all owners of a motor vehicle shall at all times be able to establish financial responsibility and shall carry evidence of the current financial responsibility form for the vehicle in the vehicle at all times.”

Reading: How does car insurance work in california

If you don’t have auto liability insurance, you can be fined, have your license suspended, and have your vehicle impounded.

your auto policy

Your auto insurance policy is a contract between you and your insurance company. explain:″

compare policies

Auto policies can vary widely. Discuss your insurance needs openly with your agent, broker, or insurance company. they can help you, but it is your responsibility to choose the insurance that suits you best.

You should always get multiple quotes. A quote is an estimate of the cost of your premium. compare quotes before buying a policy.

know your policy

It’s important to become familiar with your auto policy before you need it. read it carefully. the declarations page is a helpful summary of your policy.

compare policies

Auto policies can vary widely. Discuss your insurance needs openly with your agent, broker, or insurance company. they can help you, but it is your responsibility to choose the insurance that suits you best. you should always get multiple quotes. A quote is an estimate of the cost of your premium. compare quotes before buying a policy.

know your policy

It’s important to become familiar with your auto policy before you need it. read it carefully. the declarations page is a helpful summary of your policy:

contact the california department of insurance (cdi)

We are the state agency that regulates the insurance industry. we also work to protect the rights of insurance consumers. see page 28 for more information on cdi. contact us at:

1-800-927-4357

www.insurance.ca.gov

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car insurance costs

premium

A premium is the amount you pay the insurance company to purchase your auto policy. the premium covers the term or duration of the policy. the term can be 6 months or 1 year.

Most insurance companies allow you to pay your premium in installments. ask if there is an additional fee to do this.

deductible

Some types of coverage have deductibles. A deductible is the amount you must pay before the insurance company pays anything on a claim.

You usually pay a lower premium if you choose a higher deductible.

Example: Let’s say your comprehensive coverage has a $500 deductible. If a storm causes $1,500 in damage to your car, you must pay the first $500. then your comprehensive coverage pays the rest: $1,000.

limits

Each type of coverage has its own limits. the limit is the total amount the insurance company will pay for a single accident or loss. the insurance company will not pay any costs above the limits.

Example: Let’s say your auto liability coverage is capped at $50,000/$100,000 in bodily injury from one accident. in this case, your insurance will not pay more than $50,000 per person. will not pay more than $100,000 for an accident.

Do I pay a fee to my agent or broker?

Agents are paid by the insurance companies, not by you. If you work with a broker, you will typically pay a broker’s fee. see page 20.

Do all insurance companies have the same costs?

not. costs vary, even in the same area. When shopping for car insurance, you should compare costs and coverage from multiple companies. see pages 14-15.

I can’t pay my premiums. what can i do?

California has a low-cost auto insurance program for income-eligible drivers. see pages 22-23.

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California law and liability coverage

Liability coverage helps pay for injuries or damages to others when you are at fault. If you own and drive a vehicle, you must comply with the financial responsibility laws of the State Vehicle Code. the most common way to do this is to purchase auto liability coverage.

Liability coverage does not pay for injuries to you or your family members. can buy medical payments coverage for you and your family.

minimum liability coverage

By law, the limits below are the minimum insurance limits for a standard auto policy. you must have this amount of coverage.

minimum limits of liability for bodily injury

• $15,000 for the death or injury of any person. if one person is injured in the accident, your coverage pays up to $15,000.
• a total of $30,000 for the death or injury of more than one person in any one accident. if 2 or more people are injured, coverage pays up to $30,000. coverage will not pay more. injured people share the money.
• This coverage applies to injuries you cause to another person.

minimum limits of liability for property damage

• $5,000 for damage to other people’s property.
• This pays for damage you cause to someone else’s car or objects and structures your car hits.

must purchase liability coverage.

driving without insurance is illegal. Additionally, you must have liability coverage to register your car. Your insurance company tells the California Department of Motor Vehicles (DMV) if you buy auto insurance or if you stop paying your premium.

what if I don’t have liability coverage?

If you don’t show proof of insurance when asked, you will be fined. if you do not have any insurance, your license may be suspended and your vehicle may be impounded. remember, driving is a privilege, not a right.

How do I prove I have liability coverage?

Your insurance company will send you a card to show proof of insurance. lists the vehicles insured and the name of the policy holder. it also shows the policy number and the start and end dates of the policy. keep this card in your car.

what if I cause an accident that costs more than my liability limit?

can be sued for additional costs. you may lose your savings and even your home.

Should I get higher limits than the law requires?

You may want higher liability limits than required by law. In general, the more assets you have, the more you could lose in a lawsuit. you should discuss your situation with your agent, broker, insurance company, or financial advisor.

Are there other ways to prove financial responsibility besides taking out insurance?

Yes, there are several ways to demonstrate financial responsibility. For more information, visit the dmv website at www.dmv.ca.gov.

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other types of coverage

These are other common types of coverage. you may not need all of them.

uninsured motorist coverage (umc)/underinsured motorist coverage (uim)

This covers you if you are in an accident with a driver who has no liability insurance or is underinsured.

The insurance company must offer you this coverage. If you choose not to buy it, you must sign a form, called a waiver. the form says you were offered coverage and turned it down.

medical payment coverage

This covers the cost of medical expenses if you or your passengers are injured. This coverage can pay for immediate medical care, no matter who is at fault.

physical damage coverage

Comprehensive and collision coverage provides compensation based on the market value of your car. if the value is low, you can’t choose these.

additional types of coverage (endorsements and attachments)

if you have a car loan:

If you have a loan, you usually need to insure your car. If you don’t buy insurance, the loan company can buy it and charge you. It usually costs less if you get your own comprehensive and collision coverage.

Car insurance won’t pay your loan if your car is damaged and its market value is less than what you owe. Auto dealers and lenders may offer guaranteed auto protection (gap) insurance for this purpose.

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coverage summary

liability coverage is for accidents that are your fault.

• Bodily injury liability pays for bodily injuries you cause another person.
• Property damage liability pays for property damage you cause to someone else.

California law requires you to have this coverage. see pages 6 and 7.

Uninsured/Underinsured Motorist coverage is for accidents when the other driver is at fault and is uninsured or underinsured.

• Bodily injury coverage pays medical expenses for you and your passengers.
• Property damage coverage pays the cost of repairs to your car that are not covered by collision coverage up to $3,500. you may not need this if you have collision coverage.

You must be offered this coverage, but you can choose not to purchase it.

medical payments coverage pays limited medical expenses for people injured in the car you are driving when you are in an accident, whether you are at fault or not.

you may be offered this coverage

physical damage coverage pays the cost to repair or replace your car, less your deductible.

• Collision covers damage to your car from an accident with another car or a physical object, such as a deer.
• Comprehensive coverage covers damage to your car from events other than a collision, such as theft, fire, or vandalism.

This coverage is required by lenders or leasing companies.

additional types of coverage

• towing and road service.
• rental reimbursement pays for a car rental when your own car is being repaired after a covered accident.

You can choose to purchase these coverages. they are not necessary.

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buy car insurance

Car insurance costs and coverage vary. you should always get multiple quotes. A quote is an estimate of your premium amount.

an agent or broker can help you determine your insurance needs, get quotes, compare policies and get the best discounts. Take notes of your conversations. if you want, bring a trusted family member or friend with you.

compare policies:

1. use the worksheet on pages 16-17 to decide what type of coverage you want.

2. Request a quote from each insurance company in writing.

3. compare quotes.

4. ask for the full name of the insurance company that will issue each policy.

If you think you have been treated unfairly, call the California Department of Insurance at 1-800-927-4357.

save money on your policy:

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worksheet: how much insurance do I need?

These are some of the common limits you can buy. check what you want.

Liability Coverage: Bodily Injury Limits

limit per person/limit per accident

Liability Coverage: Property Damage Limits

Uninsured Driver: Bodily Injury

These limits are typically the same as your liability coverage: bodily injury limits.

Uninsured Driver: Property Damage

the limit is $3500.

Underinsured Driver: Bodily Injury

These limits are typically the same as your liability coverage: bodily injury limits.

medical payment coverage limit per injured person

physical damage coverage

integral-

most common deductibles

• $100
• $200
• $500
• $100
• $200
• $500
• $100
• $200
• $500

collision-

most common deductibles

• $200
• $500
• $1,000
• ______
• $200
• $500
• $1,000
• ______
• $200
• $500
• $1,000
• ______

coverage for special equipment

item:__________________________cost:_________________________________

item:__________________________cost:_________________________________

exemptions or exclusions

exemption/exclusion:______________________cost:_____________________________

compare quotes from different insurance companies

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fill out an application

You will need to provide certain information when you apply for auto insurance. the insurance company uses the information to decide whether to insure you and for how much.

• how you use your car, for example for business, commuting or family trips
• how many miles do you drive in a year
• the years, makes, models, and vehicle identification numbers for all automobiles in the household
• the amount you paid for the cars
• insurance requirements if you have a loan or lease
• how long have you been driving
• the names, ages, marital status, and driver’s license numbers of all drivers in your household
• driving history for all drivers in your household, including accidents, insurance claims, and traffic tickets, but not parking tickets
• Most insurance companies will request a motor vehicle report from the dmv – this is the official status record of your accidents, traffic violations and suspended licenses

before signing anything:

• Please take the time to review your application before you sign it.
• do not sign any form you do not understand.
• do not sign any blank forms.
• ask for copies of all forms and other documents for your records before you leave the office of the agent, broker, or insurance company.

When you receive your new policy, review it.

make sure the information is correct and that the coverage is what you purchased. contact the company immediately if you find an error. send the changes to your agent, broker and/or insurance company in writing and keep a copy. Don’t be afraid to contact the insurance company directly to make sure your agent or broker has applied for the coverage you wanted. use “certified mail/return receipt requested” to make sure your letter was received.

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work with an agent or broker

in california, you can buy insurance from an agent, broker, or insurance company. you can get insurance quotes online, by phone, or by mail.″

choose an agent or broker

Choose your agent or broker carefully. Can the agent or broker be trusted? Do you feel that they will put your interests first?

You can search for agents or brokers in your local yellow pages or online. or ask for names of relatives, friends, neighbors, or co-workers. ask:

check license:

Verify that the agent or broker is licensed to sell auto insurance in California. go to www.insurance.ca.gov/license-status/ and enter the name of the agent or broker. or call the California Department of Insurance at 1-800-927-4357.

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if you have an accident

Immediately report accidents to law enforcement and your insurance company. You can request a free booklet from CDI called “So You’ve Had an Accident, What’s Next?” This brochure explains what to do when you have an accident.

Your insurance company may send a person called an adjuster. the adjuster investigates and assesses your damages and losses. if there is damage to your car, they may refer you to a body shop, or you can choose your own.

what if both drivers are at fault?

In many accidents, both drivers share the blame. the police, insurance companies, or the courts decide comparative negligence. this establishes the share of responsibility of each driver.

If I am injured in an accident, does my health insurance pay anything?

Usually your health insurance pays for your immediate medical care. then your health insurance company will usually try to recover money from your car insurance or the other person’s car insurance.

When one insurance company tries to recover money from another insurance company, it’s called subrogation.

does my car insurance company charge me more if i have an accident?

If the accident is not your fault, your insurance company does not charge you more. If you are at least 51% at fault, your premium may increase when you renew your policy. this increase is called a surcharge.

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low cost auto insurance program of california (clca)

if you can’t afford standard auto insurance

The law says you must have auto liability insurance. however, if you have a low income, it may be difficult to pay the premium. California has a program to help you.

This program helps income-eligible, good drivers get insurance. The premium for liability coverage varies depending on the county in which you live. check our website for current rates.

• The liability limits for this program are lower than the limits usually required by the state. but these limits comply with state financial responsibility laws. the limits are:

• $10,000 bodily injury or death per person

• $20,000 for accidental bodily injury or death

• $3,000 property damage per accident

Your annual income must be 250% or less of the federal poverty level.

Your car must be worth $25,000 or less.

You must have a valid California driver’s license.

You must be at least 16 years old.

If there is a single male driver in the household between the ages of 19 and 24, the premium is higher.

there are 7 payment plans available. there is no broker fee.

For more information, visit www.mylowcostauto.com. or call 1-866-602-8861.

low cost auto insurance (clca) program worksheet

Use this worksheet to write down your car insurance costs from the Low Cost Car Insurance Program (CLCA).

• bodily injury limit for each person/each accident is $10,000/$20,000.
• $3,000 property damage limit
• Uninsured motorist bodily injury limit for each person/each accident is 10,000/$20,000.
• medical payment limit is $1000

totals

if you have a history of high-risk driving

the california auto assigned risk plan (caarp)

If you’ve had multiple accidents or speeding tickets, you may not be able to find a standard company to insure you.

If you compare prices, be sure to carefully compare costs and coverage.

You can also get liability insurance through the California Automobile Assigned Risk Plan (CAARP).

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common terms

Actual Cash Value (ACV): Unless otherwise defined in the policy, Actual Cash Value in California means Fair Market Value. The fair market value of an item is the dollar amount that an informed buyer (no unusual pressure) is willing to pay and an informed seller (no pressure) is willing to accept.

Adjuster: The person at your insurance company who investigates and assesses your damages and losses.

agent: A person or organization licensed to sell and service insurance policies for an insurance company.

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notebook: A short-term agreement that provides temporary auto coverage until your auto insurance policy starts.

broker: A person or organization that is licensed to sell and maintain insurance policies for you.

broker fee agreement: the contract between you and your broker. lists the fees for your broker’s services.

cancellation: when you or your insurance company cancel your policy early. they might do this because you didn’t pay your premium. you may be canceling your policy because you no longer own or drive a car.

claim: your request to an insurance company to cover an accident or other loss.

collision coverage: Pays for damage to your car caused by physical contact with another vehicle or an object, such as a deer, tree, rock, railing, building, or a person.

commission: the fee an insurance company pays an agent or broker when they sell a policy.

comparative negligence: the percentage of responsibility that each driver shares in an accident when both drivers are at fault.

Comprehensive coverage: Pays for damage to your car caused by something other than a collision, such as fire, theft, vandalism, windstorm, flood, falling objects, etc. .

declarations page: Usually the first page of an insurance policy. lists the full legal name of your insurance company, amount and types of coverage, deductibles, and vehicles insured.

deductible: The amount of loss you must pay before your insurance company pays anything. only comprehensive and collision coverage have deductibles.

endorsement/rider: a written statement that changes the coverage or details of an insurance policy.

exclusion: These are the specific things that your insurance policy does not cover or limits coverage. For example, your policy may not cover certain types of perils, people, property, or locations.

Gap Coverage: Pays the difference between the fair market value of your new car and the balance you owe on your loan or lease.

insured: the person who can receive covered benefits in the event of an accident or loss. also called the policy holder.

insurer: the company that issues your insurance.

Liability coverage: insurance that helps pay for injuries and damages caused to third parties by accidents that are your fault.

Limit: The maximum amount of money your insurance company will pay for your loss.

medical payments coverage: covers limited medical costs for you or others in your car, when you have an accident.

Non-renewal: This is when you or your insurance company do not renew your policy at the end of its term.

Policy: This is your contract with the insurance company. explains your coverage. it also establishes the rights and duties of both you and the insurance company.

premium: the amount you pay to buy an insurance policy.

private passenger car: four-wheel motorized vehicles for use on public highways, such as cars, trucks, pickups, and vans. they must be registered with the state.

quote: an estimate of your insurance premiums based on the information you provide to the insurance agent, broker, or company.

rescission: the cancellation of a policy at its start date. If this happens, the insurance company does not pay for any of your losses and your premiums are refunded. this can happen if you knowingly provided false information when you applied for the policy.

subrogation: When an insurance company pays money for a claim and then tries to get another insurance company to pay you back or reimburse you.

surcharge: an additional charge that an insurance company adds to the premium. This usually happens because a covered driver has had an accident or traffic violation through their fault.

Uninsured/Underinsured Motorist Coverage (UMC): Provides coverage for a policyholder involved in a collision with a driver who does not carry liability insurance or whose limits of liability are too low to pay all damage .

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find more information

For information on the insurance department, see page 32.

california auto assigned risk plan (caarp)

state insurance information for high-risk drivers

1-800-622-0954

california low cost auto insurance program

information on the state-sponsored pilot program for good drivers who are income eligible

1-866-602-8861

www.mylowcostauto.com

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disclaimer

1. this brochure is for informational purposes only.

2. the actual terms of an insurance policy and related law prevail over the information provided in this brochure.

3. in the event of a dispute, the insurance policy prevails and a court of law will rely on the policy as written to resolve the dispute.

4. the policy is the only document that describes what the insurance company will pay.

5. The information contained in this brochure does not create any rights or obligations on the part of the insured, the insurer, the agent, the broker or the state.

6. This brochure is not intended to be a substitute for the actual insurance policy.

summary in English

car insurance

This brochure provides valuable information on the following topics:

• introduction to car insurance• car insurance costs

• liability coverage and california law

• other types of coverage• summary of coverage

• shopping for auto insurance

• worksheet: how much insurance do I need?

• complete the application

• working with an agent or broker

• in case of an accident

• the state of california’s low-cost auto insurance program• if you have a history of high-risk driving

• common terms

• find more information

• disclaimer

This brochure is available in Spanish on our website at insurance.ca.gov. select translate spanish on the right side of the screen. Select the Choose Consumer Insurance Types tab, then select Auto.

talk to the insurance department

We are the state agency that regulates the insurance industry. we also work to protect the rights of insurance consumers.

contact the california department of insurance (cdi):

call:

Consumer Hotline 1-800-927-4357

phone 1-800-482-4833

write:

california department of insurance

300 south spring st., south tower, ninth floor, los angeles, ca 90013

Visit us in person:

300 south spring st., south tower, los angeles, ca 90013

8:00 am to 5:00 pm, Monday through Friday, except holidays

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Source: https://amajon.asia
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