California Insurance Resources
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CA Car Quotes and a lower premium in two easy steps:
Things to Consider When Choosing Your California Insurance Company:
The California Department of Insurance publishes a long list of information for consumers regarding facts, laws, and tips on buying auto insurance. Some important information provided by the CA Department of Insurance is covered below.
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.
It is important to get quotes from different companies. You may not realize it, but the insurance rates you pay for your car can vary dramatically depending on the insurance company you choose. You should always compare before deciding on a policy.
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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?
It is critical that you choose a producer with whom you feel comfortable. You need to be able to have an open exchange about the coverages and services that are available, so you can determine what best fits your needs. It is not the responsibility of the broker-agent to determine either the type or amount of coverage you need, so good communication is the key.
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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.
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Policy Rights
When I Apply for Insurance, What Kind of Information is Obtained?
Your insurance company or agent will require that you disclose certain personal information on the application to determine your eligibility for insurance coverage and establish the price of coverage. If you are applying for automobile insurance, the company will collect information such as your driving record, use of automobile, mileage driven, and years of driving experience.
For automobile insurance, most insurance companies will order a Motor Vehicle Report (MVR) for all the drivers listed on the insurance application. The MVR is the state’s official record of driving information obtained from the DMV. It is used to verify accidents, traffic violations and license suspensions for all potential drivers listed on the application.
A California Insurance Proof Certificate (SR22) filing is required in cases of unsatisfied judgments, major convictions, license suspensions and failure to have liability at the time of an accident. Your insurance company files this form with the DMV. The filing requirement period can be up to three years. Most major convictions of traffic offenses, such as hit and run, reckless driving, and driving under the influence will remain on your record for seven years from the violation date. Most minor convictions will remain on your record for three years.
The SR22 form should not be confused with the SR1 form, which is the California Traffic Accident Report Form. Whenever you are involved in an accident, the DMV requires that you file the SR1 form within ten days of the accident date, if there is any bodily injury, or property damage that exceeds $750.
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What Other Coverages are Available?
Insurance companies must offer the following coverage with every automobile policy:
- Uninsured / Underinsured Motorist: Provides liability insurance when the party at fault does not have the state required minimum liability coverage, or the minimum liability coverage is insufficient to cover the injuries sustained in the accident. Likewise, uninsured motorist property damage covers possible reimbursement for damages your car sustains (BI and PD).
Most insurance companies will also offer the following optional coverages:
- Medical Payments: Provides for the payment of medical and similar expenses without regard for liability.
- Physical Damage (collision and comprehensive): Neither of these cover mechanical breakdown or normal wear and tear. Collision covers damage to your vehicle caused by collision with another vehicle or with any other object, regardless of fault. Collision insurance covers vehicle upset (overturn), but does not cover bodily injury or property damage liability. Comprehensive coverage covers damage to your car caused by reason other than collision, such as fire, theft, windstorm, flood, vandalism, etc.
- Endorsements/Riders: Special equipment (i.e. after-market additions such as premium stereos, tires, and other misc. equipment), towing, and rental reimbursement.
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What Else Should I Keep in Mind?
- Inquire about discounts (such as multi-car, airbags, anti-theft device, etc.) and/or surcharges the company applies. All companies will not offer the same type of plans, nor have the same underwriting rules (eligibility/acceptability guidelines). Therefore, it is critical to ask for this information.
- Make sure you know the length of the policy term. This can be one month, six months (semi-annual) or one year (annual), depending on the insurance company.
- Many companies have their own payment (installment) plans which allow you to pay the premium over a period of time for a service fee. If you decide to buy a policy on an installment plan, find out the applicable finance or service charges. If you use a premium finance company to pay for your insurance, the monthly payments may be easier, but the total of payments will be larger. Moreover, if the policy is cancelled, the insurance company must remit all return premiums to the finance company, who will apply them to your account.
- Check to see if you are responsible for paying any up front fees. Sometimes insurance companies charge policy issuance fees. Once the policy is issued, this fee is generally fully earned. If the policy is canceled later, the fee will not be returned.
- Ask about higher deductibles. By requesting higher deductibles on comprehensive and collision coverage, you can lower your costs. However, remember that the deductible you choose is what you are responsible for paying up front in the event you file a claim against your automobile insurance policy.
- Should you drop comprehensive and/or collision coverage on an older car? It may not be cost-effective to have comprehensive or collision coverage on cars worth less than $1,000 because any claim you make would not substantially exceed the annual premium cost and deductible amounts.
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What if I Can’t Find a Company That Will Insure Me?
Some insurance companies specialize in the non-standard auto market for what they consider to be high-risk drivers. Should you decide to buy in one of these markets, be sure to shop carefully because eligibility requirements and rates vary.
If you can’t find a company that will insure you, you can get liability coverage through the California Automobile Assigned Risk Plan (CAARP). This plan is designed for drivers who do not qualify as good drivers and are unsuccessful in obtaining insurance from non-standard or approved surplus lines insurance companies. To apply for the plan, find a CAARP certified insurance agent or call CAARP direct.
The plan works by taking your application and assigning it to an insurance company. All insurance companies licensed in the state must accept CAARP applicants. The amount of CAARP assignments is based on insurance company market share. The more automobile policies an insurance company issues, the larger the portion of CAARP assignments they are required to take.
The rates used by the plan are the same no matter what insurance company issues the policy. The plan also offers installment options. After three years with a clean driving record, consumers underwritten through CAARP can move from the program to a standard lines insurance company. No broker’s fee can be charged in connection with a CAARP policy.
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