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A palm-lined California road; image courtesy of www.thepicta.com.
A palm-lined California road; image courtesy of www.thepicta.com.

Are you looking for auto insurance policies in California? It is a legal requirement that all car owners insure their cars before taking them out on the roads. California auto insurance policies also enable car owners to secure themselves and their vehicles from all probable risks and threats. Hence, even if it wasn’t a legal requirement, it would be a good idea to carry such coverage.

However, deciding on an auto insurance policy and the ideal extent of coverage is definitely a stiff task. Likewise, it involves the challenge of the rising cost of premiums. While buying California car insurance coverage, you will need to balance all these aspects. Remember, more than emphasizing the cheapest car insurance policy, you should focus on finding the policy that extends the most comprehensive coverage against risks and threats with the most reasonable rates. If you approach this search wisely, you should not find any difficulties in finding the most suitable, yet affordable, auto insurance policies in California.

What is the average car insurance premium in California?

If you want to find the most comprehensive California car insurance, with affordable rates, you will need to have an idea about average car insurance rates. This will enable you to determine if the quote you have is reasonable or toward the high end.

Auto insurance rates, on an average in California, amount to slightly over $1,500 per year. However, this includes only the basic coverage. The rate varies from one part of the state to another and even between some ZIP codes. Sometimes the rate is even more than double the average. Hence, the figure stated is purely an example.

While discussing the average premium rates for car insurance, it is especially relevant to state that California residents are not allowed any concession, as usual, for having a superlative credit score. The rate varies, depending on the location of the car owner, within California.

You should keep in mind that every insurer follows its own method of risk evaluation. Hence, it stands obvious that there will be differences in premium rates from one insurer to another. However, all companies emphasize certain aspects to assess the extent of risks. Key points in that regard are the model and age of the car, the extent of assets the car owner holds, the driving history, as well as the car’s use. Depending on these factors, you are likely to find different quotes for insuring different vehicles, even with the same insurer.

Thus, even after you find the average rates for car insurance premiums, you should have a personal discussion with the insurer about the exact rate you would pay. In this regard, you can certainly use free online quotes. Comparing these quotes, you can form an idea about the average rate, applicable in your case. You should buy the policy from the insurer extending the most suitable coverage within your spending plan.

Traffic; image courtesy of www.aspenautoclinic.com.
Traffic; image courtesy of www.aspenautoclinic.com.

California car insurance requirements

As instructed by law, you should have a minimum coverage of $15,000 against personal injuries. This amount covers the registered owner, the drivers designated by the owner, as well as the passengers in the car, at the time of an accident. As for the coverage on liability for compensating damages to 3rd party properties, it should not be less than $5,000.

Though having this level of coverage is alright from the legal perspective, it may not be sufficient in practice to cover all of your expenses and liabilities arising from the accident. Keep in mind that the costs for car repairs, as well as medical costs, are rising sharply. You should have a level coverage that will enable you to cover such expenses.

Though the cost of greater coverage will be toward the high end, it is still affordable. Therefore, finding suitable insurance coverage should not be a daunting task. On the other hand, insurers keep offering various kinds of schemes that will enable you to downsize your expenses in this regard. Thus, within an affordable range, you can certainly find the best insurance coverage for your vehicle.

You should have a detailed discussion with the insurer about the solutions that specifically meet your insurance needs, as well as the legal requirements in California.

Recommended car insurance coverage in California

Taking the minimum coverage will be adequate for those owners who have paid for their car with personal cash. Likewise, if you don’t possess a significant amount of assets, taking the minimum extent of coverage will do. However, this will not suitable for those who have financed the car purchase and own substantial assets and investments. Buying additional coverage will cost you a higher amount of money. However, the value that you will get will be worth the additional investment. This will protect your assets and investments as well as enable you to escape paying extravagant expenses out of pocket.

Here is some key advice from the experts, regarding buying insurance coverage in California:

  • The extent of liability coverage should be decided taking into consideration the value of the net assets you own. If you are a property owner or you have purchased your car outright, you should buy liability coverage to the extent that will be sufficient to cover your assets from the risks of liquidation to cover liability payments in the event of an accident.
  • You must buy Collision & Comprehensive coverage that will compensate you in the event your car is stolen. If you own a new car or your car is less than 10 years old, buying this coverage is absolutely a must. If your car is over 10 years old and its value exceeds $3,000, you should still buy this coverage.
  • Though buying coverage against uninsured and under-insured drivers is not mandatory, it is wise to avail yourself of this protection. Remember, if you don’t have this coverage and you suffer an accident caused by such drivers, you will have to incur the expenses for medical treatment and car repairs out of pocket. As such, buying this coverage, and paying slightly a higher amount for it, is definitely a wise act.
  • GAP insurance coverage is absolutely a must for those car owners with a car less than a year old. This is especially true for those owners who financed their vehicles and invested less than 20% of the car’s value as the down payment.

Laws in California

  • Drivers with at least three consecutive years of holding a license, or who don’t have more than a point on their driving record, are eligible for a concession of 20% of the insurance premium.
  • Drivers from low-income groups can use the Low-Cost Car Insurance Program that allows buying coverage for liability for bodily injury at the minimum level of $10,000. Under this scheme, drivers can buy coverage for liability for damages to 3rd party property with a reduced level of $3,000.
  • California is among those states that comply with the Pure Comparative Negligence act. As per this act, the drivers at fault will have to shoulder the extent of liability payments to the extent of his/her fault. For instance, if it is assessed that one driver had 75% responsibility for the accident, that driver is responsible for 75% of the damages to the concerned parties.
  • Claims for medical expenses should be raised within two years of the date of accident.
  • Claims for compensation for a stolen vehicle should be raised within 30 days of the date of the theft or such claims may not be honored.

When buying car insurance in California, it is important that you comply with the legal mandates. Likewise, you should consider the recommendations suggested above for determining the types of coverage and the levels that you must buy. It is wise to compare quotes from a number of companies and buy the policy only after considering the rates and coverage. Most importantly, you should not under-insure your car for some insignificant upfront savings. Such savings are nothing compared to the expenses you may incur if you have an accident.

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