Auto Insurance Basics...

Some Definitions

A standard auto policy is made up of several types of coverage. Each of these coverages has its own separate premium.

Bodily injury liability provides protection if you injure or kill someone while operating your car. The type of car you drive has little bearing on the amount of coverage you should have. In the event of a serious accident, you should have enough insurance to protect assets that may become subject to a lawsuit. This coverage is legally required.

Property damage liability pays for damage you cause to someone's property and also provides you with legal defense. This coverage is legally required.

Medical payments, no-fault or personal injury insurance usually pays for the medical expenses of the driver and passengers in your car in the event of injury (up to the specified limit you choose) no matter who was at fault.

Uninsured motorist coverage (BI and PD). Uninsured motorist bodily injury (UMBI) coverage pays for injuries to you or to persons in your car in accidents caused by uninsured or unidentified drivers. The law requires that this coverage must be offered with liability insurance. If you reject it, you must do so in writing. Uninsured motorist property damage (UMPD) coverage pays for damage to your car caused by an identified uninsured motorist.

Comprehensive insurance (A component of physical damage coverage) pays for damage to your car caused by reasons other than collision, such as fire, theft, windstorm, flood, etc.

Collision insurance (A component of physical damage coverage) pays for damage to your car caused by a collision with another vehicle or with any other object, regardless who was at fault.

Rental car reimbursement helps pay the cost of renting alternate transportation if your auto is disabled in an accident for more than 24 hours.

Back to top

Prop 103

Proposition 103 was enacted into law in November of 1988. Proposition 103 provides many consumer protections related to purchasing and maintaining Automobile Insurance. Some of the key provisions of Proposition 103 protections and consumers rights related to automobile insurance can be found below:

• Good Driver Provision: Proposition 103 established a legal definition of a "Good Driver" in this state. As defined a Good Driver is a person who has been licensed for three years and has one or less points on their motor vehicle record. The consumer rights that are created from the Good Driver provision are that no insurer can refuse to offer coverage if you qualify as a Good Driver and that Insurer is required by law to provide a Good Driver discount of 20% to all eligible applicants. Please call us for details.
• Cancellation/Non-Renewal Provisions: Proposition 103 established new criteria which determine an Insurer's ability to cancel or non-renew your policy. Once a automobile policy has been issued the only reason an insurer can cancel/non-renew that policy are:
  1. Fraud/Material misrepresentation.
  2. Nonpayment of premium.
  3. Substantial increase in the hazards insured against. Please note: Notice requirement mandated by the California Insurance Code requires 10 days notice to you before canceling your policy for nonpayment of premium. Additionally the Insurance Code requires 20 days notice to you of renewal or 30 days for non-renewal.
• Determination of Rates: Proposition 103 established uniform guidelines upon which your automobile rates would be determined. The primary factors being:
  1. The individual's driving safety record.
  2. The number of miles he/she drives annually.
  3. The number of years the insured has been driving. There are secondary rating factors like where the insured lives, marital status, age, etc. that are currently used to determine rates.

Back to top

Consumer Responsibilities Related to Automobile Coverage

The minimum requirements of California's financial responsibility law:

1. You must purchase insurance from an insurance company that is authorized to do business in the state that you reside in.
2. You must purchase, at a minimum, bodily injury liability and property damage liability. You must purchase at least fifteen thousand dollars ($15,000) of bodily injury liability coverage per person, thirty thousand dollars ($30,000) total, and a minimum of five thousand dollars ($5,000) of property damage liability coverage.

 

We almost always recommend that you purchase coverage amounts greater than those required by law, especially if you have assets to protect. Please call us to find out more.

Back to top

How to Buy Auto Insurance

• The best insurance consumer is an educated consumer. Research what coverages are available and what liability limits and deductibles fit your needs. Californiaautoinsurance.net and Tegner-Miller Insurance Brokers can be valuable resources in helping you determine what policy is right for you. Remember that price should not necessarily be the main driving factor in your insurance decisions.
• There are some companies that will offer low prices, but at the expense of other important features such as claims service, training and availability of representatives and policies that aren’t covered by state guaranty funds. We have done extensive research and have built relationships with the most reputable and stable auto insurance carriers. All of the insurance carriers that we represent are licensed to do business in California and policyholders of licensed companies are protected by the California Insurance Guaranty Fund.
• Before purchasing a policy, it is sometimes prudent to look into the company’s claim history and public complaint record. Although we have done this research for you, the California Department of Insurance publishes a complaint study that can help you find a service-oriented company.
• Depending on your financial situation, you may want to consider higher deductibles. By requesting a higher deductible on your collision and comprehensive coverage, you can lower your costs for those coverages. However, you will also incur greater out-of-pocket expenses should you need to have a claim processed. Ask us for advice on which deductibles are right for you.
• Sometimes it makes better fiscal sense to drop collision and/or comprehensive coverage on older cars. It may not be cost effective to have collision or comprehensive coverages on cars worth less than $1,000 because any claim you make would not substantially exceed annual costs of deductible and premium amounts.
• Some companies offer convenient "fringe" coverages, such as towing services or rental vehicle reimbursements. These can prove to be valuable services, should you need them. Review these changes to consider their benefits relative to the additional costs.
• Before deciding on an insurance company, you should comparison shop. Often prices for the same coverages may vary greatly. We have a wide selection of diverse companies from which you can choose the coverage that best fits your needs and budget. See which insurers we represent, get an instant quote, or call us for a recommendation on the best carrier for you. Remember that we are independent agents and brokers and therefore do not work for insurance companies. We work for you.
• Be sure to familiarize yourself with all coverages you are purchasing. When you purchase a policy from us, we will go over each part of your policy and explain how each coverage applies. Don’t wait until after an accident to become familiar with your policy.

If you feel you have been unfairly denied coverage, call the CDI’s toll-free Hotline at 1-800-927-HELP (4357).

Back to top

Tips to Keep in Mind

• Comparison-shop for your insurance needs. You can do this in our Instant Quotes area.
• If you call us to complete your application, give complete and correct information. Since your premium quote will be based on this information, it is very important to be completely honest.
• After the application or any finance agreement is completed, reread it to see if everything is correct before you sign. Be sure to get a copy for your records.
• When you get your policy, read it. Check to see that the coverages, limits, premium and other information are correct. Also, read through the policy to know your rights and the company’s rights under the terms of the policy.
• When you have a claim, be aware that you have the option of using the repair facility of your choice. Remember that you must first obtain an authorization for your insurance company before beginning any repairs. Also, the California Department of Consumer Affairs requires a written estimate of repair costs before claims work begins.

Back to top

Where to File Complaints

If you believe you have been treated unfairly in shopping for insurance or in getting a claim paid, or if you have any problems or questions about your insurance, please let us know. You can also contact the California Department of Insurance at 1-800-927-HELP (4357).

Back to top