Whether you have California auto insurance, California homeowners insurance, or both, if you are thinking of taking action to temporarily lower your insurance costs, you better think twice. If you cut back on your coverage, you are adding to the risk and may expose yourself to higher out-of-pocket expenses in the event of an accident that results in bodily injury or property damage.
In today’s difficult economy, many people are struggling just to be able to pay their regular monthly bills. If you are thinking of raising your deductible or temporarily cancelling some optional insurance in order to save some money on your monthly premium, you could be making a bad decision.
Imagine what would happen if you cut back on your coverage on your automobile insurance and then got in a serious accident. Trying to save $100 or $200 per month can wind up costing you thousands of dollars because of inadequate coverage or high deductibles. Instead of cutting back on insurance, maybe it would be better to give up the premium TV subscription or cut back on some other non-essential expenses.
California homeowner insurance can protect you if your home is damaged by fire, wind, or other forces of nature. Depending on the type of coverage you have, you will be reimbursed for theft, vandalism or other types of contingencies that might occur on your property. Temporarily lowering your insurance costs can wind up costing you a lot of money. If a tree falls through your roof and you do not have coverage, it could cost you thousands to repair.
Why take a chance? If you have a house, you do not want to lose it because you were trying to save a few dollars. As hard as it may be to pay the extra premium amount, it is the responsible and right thing to do.
Just like anything else you may buy, as a smart consumer you should look for the best deal you can find on insurance. All California insurance companies are not created equal. Some of them charge lower premiums than others and some of them offer better service than others. Whether you are buying California auto insurance or California homeowner insurance, it pays to take some time and compare the different insurance companies in your area.
If cost is a factor in your decision to purchase insurance, you should certainly shop around to find the California insurance company that will best suit your budget constraints. Different insurance companies assess risk somewhat differently from other companies and may charge higher or lower premiums. Some California auto insurance companies may charge much higher premiums for young drivers while other auto insurance companies might actually forgive a first accident and not raise your rates.
Your California insurance provider should also be able to provide you with fair and quick service in the event that you need to file a claim. Having an excellent, helpful customer service department when you have a question or problem is an important component for any type of insurance coverage.
Which insurance provider you select also matters because of the different ways they may treat their customers. Some companies are not very customer friendly and do not offer any kind of incentive to their best clients. Other insurance companies reward loyal customers with discounts or other incentives for the years that you have been with them.
A reduction in the amount of your deductible or a small discount may not be the biggest factor in selecting a California insurance company, it can be an important part of any insurance purchase decision.
Your home is most likely your biggest and most valuable asset, and you should have California homeowners insurance to cover any physical damage to your home and any liability you may incur as the owner of that home.
If you have a mortgage on your house in the state of California, or for that matter, in any state, your lender will require you to purchase and maintain homeowners insurance on that home. Even if you have completely paid off the mortgage and own the house outright it is still very prudent to have a California homeowners insurance policy.
In order to qualify for a mortgage every lender will require you to have an insurance policy that will provide adequate protection against any damage or destruction to the property that they are financing. A California homeowners policy should cover all hazards as well as any liability that may occur on the property.
Mortgage companies differ in their requirements over the specific amounts of coverage you must carry, but, for the most part, they want you to carry replacement value and not actual cash value coverage. Replacement value protects the lender in the event that your home needs to be repaired or rebuilt due to a covered hazard. It pays the full cost and not the depreciated cost of the materials needed for repairs or reconstruction. Actual cash value only pays up to the limit of the policy which can be below the current market price for the materials and labor needed to actually restore the home to the same condition as it was in before the damage occurred.
Most homeowners policies in California also cover liability which protects you as the homeowner in the event someone gets injured on your property and sues. While this type of insurance is not mandatory, every homeowner that cares about protecting their house should carry personal liability coverage.
When you go to a new car dealer in California and plunk down your money toward the car of your dreams, you should also consider the cost of insurance in your budget. The price of a new car these days can really put a strain on a person’s finances, and if you are financing or leasing that car, you may be saddled with high monthly payments for years to come.
Any time you lease or finance a new car, the lender will require you to carry full insurance on that vehicle. While California car insurance laws only require you to carry a small amount of bodily injury and property damage liability insurance to protect the interests of others, you might injure someone in an accident, and lenders require you to carry sufficient insurance to cover their interests.
A bank or other lending institution that provides financing or a leasing company that leases a vehicle to you has a financial interest in that vehicle until the terms of the financing or lease agreement come to an end. In addition to the mandatory liability coverage California auto insurance requires you to maintain, you must also maintain full comprehensive and collision insurance until the car is either paid off or the lease ends and you return the vehicle.
Collision will cover the value of the vehicle should it be damaged or destroyed in an accident while comprehensive covers property damage caused by forces outside of an actual crash or accident. Some areas covered by comprehensive include theft, vandalism or damage from severe weather.
While the cost of California auto insurance coverage that includes collision and comprehensive may go up by several hundred dollars, the amount added to your premium will also depend on the size of your deductible. Most lenders will require you to have a fairly low deductible, such as $250 or $500, which will cause your premium to be a little higher than if you had a $2,000 deductible.
The important thing to remember about insurance requirements when financing or leasing a vehicle is that you will need to buy more than the minimum amount of California auto insurance mandated by state law to protect the interests of the lender.
When you are cruising down the Pacific Coast Highway in your fancy new convertible, you better have California car insurance or you may have to face the consequences if you are involved in an accident or get pulled over by a police officer. In California, all drivers and vehicle owners are required to carry a minimum amount of liability insurance.
Liability insurance covers bodily image or damage you may be responsible for in the event that you are involved in a motor vehicle accident. It does not cover you, but rather, the other party or parties involved in an accident that was determined to be your fault. California follows tort law, which assigns blame to one party or another for unintentional damage that they may cause as a result of their careless or negligent actions.
Like many other states, California requires a minimum amount of bodily injury and property damage liability coverage. The minimum is $15,000 for injury to a single party and $30,000 for all parties injured in a single accident. Property damage is set at a minimum of $5,000.
There are several other options for covering the state’s minimum financial requirements. You can place a $35,000 cash deposit with the DMV or obtain a surety bond for $35,000 from a licensed California insurance company. Fleet owners with at least 25 vehicles can choose to self-insure as long as they acquire a certificate of self-insurance from the DMV.
Now just because you can get away with minimum amounts of California auto insurance that does not mean that coverage is adequate. If you are involved in an accident in which you are found to have been at fault, any amount of damage above the minimum covered by insurance becomes your responsibility.
A new car can easily suffer $10,000 or more of damage and a serious physical injury to another person might result in a $100,000 or more of medical bills. To protect your assets, a prudent person would buy enough coverage for the worst possible scenario they can imagine.
Comparing California auto insurance companies to determine which one is best suited to your needs requires a little bit of time and research. Each insurance company has their own methods for determining the premiums they charge. They may assess risk differently based upon a driver’s profile and then charge a premium that reflects that given risk.
When shopping for California car insurance, it is important to get several different quotes in order to get a good idea of the approximate range that insurance companies will charge to insure you and your car. Insurance companies look at many factors, such as the age of the driver, sex of the driver, type of vehicle, number of miles driven each year and the driving record. Some companies might penalize young male drivers under 25 or they might charge extra high premiums for a poor driving record. Other California auto insurance companies may be a little more lenient and forgive a minor traffic infraction or not look harshly on where you may happen to live.
While shopping for California auto insurance, you should also investigate potential insurance companies for how well they handle claims. If you should happen to have an accident or need to file a claim, you will want a company that handles claims quickly and fairly.
If you do not particularly enjoy doing all the necessary legwork of comparing California auto insurance companies, you might do well to visit an Independent Insurance broker that represents a number of different California auto insurance companies. While they do have an interest in each company they represent, most legitimate Independent Insurance agents will get you the best deal possible and not oversell you with a policy you do not need. They are much more interested in keeping you as a loyal customer than gouging you once only to have you go elsewhere next year.
Insurance is a subject that many people do not completely understand. If you own a home in California and drive a car you probably know that you need to carry California homeowner insurance and California auto insurance. But, do you know what kind of insurance to carry and how much you should carry?
The two biggest mistakes a California resident can make when it comes to insurance are not buying enough insurance and buying the wrong type of insurance. If someone tells you that insurance is insurance and all companies are basically the same, you should absolutely not listen to them. When shopping for automobile or homeowners insurance in California try to avoid the following costly mistakes.
Not Enough Insurance
Without doubt, the number one problem California residents face when it comes to any type of insurance is not having an adequate amount of coverage. Insurance is designed to help you get back to the level you were at before a loss occurred. It might be a house that burned to the ground or a car that was totaled in a bad accident. Family members and beneficiaries will be well taken care of if you had the foresight to buy enough life insurance.
Instead of trying to save a few dollars by buying only the minimum amount of California car insurance or California homeowner insurance, you can be much better protected with more coverage for not that much higher a monthly premium.
What Type of Insurance to Buy
When it comes to California auto insurance, you need much more than the state mandated 15/30/5 coverage. In today’s world, an auto accident can easily rack up $100,000 or more of bills. To protect yourself and your assets, a minimum of 100/300/100 coverage should be carried. Many people with more substantial estates should have even higher coverage.
In addition to liability coverage, most vehicles should also have comprehensive and collision, especially if the are worth more than a few thousand dollars.
Homeowners should also buy more than the minimum amounts required by law to protect themselves and their homes from lawsuits filed by anyone that may have been hurt on your property or any type of damage to your house.
California law requires all drivers and vehicle owners to carry liability insurance, but it does not require you to have enough liability insurance to truly protect you in the event of a serious accident. The state mandated minimum coverage is just 15/30/5 which means $15,000 for bodily injury to a single individual, $30,000 for all individuals hurt in a single accident and $5,000 to cover any property damage you may have caused.
If you own a home, you probably have California homeowners insurance and a portion of your premium goes for liability coverage. Do you know how much liability coverage you have? Do you know how much liability coverage you need?
California Tort Law Holds You Personally Liable
Any claims beyond the limits of your insurance coverage may result in an attempt to claim the difference by the injured party. To protect yourself from being personally liable, you should carry enough liability insurance.
What is the Right Amount of Liability Insurance?
The right amount of liability insurance you should carry depends largely on your net worth and how averse you are to risk. If you have a million dollar house and other substantial assets, you would probably carry enough liability coverage so those assets are not put at risk in the event that you are found liable for injury or damage to another party.
What Happens if I Get Sued?
If you are involved in an automobile accident and found to be at fault, your insurance will protect you up to the limits of your policy. Your insurance company will also assist you in the event that the damaged party decides to sue you. Legal defense in any type of liability case can be very expensive. Insurance can cover those costs. Even if you are completely innocent, you may still need to hire an attorney and spend thousands in fees just to clear your name. No matter how careful you are, you should always carry adequate liability insurance – just in case.
Shopping for auto insurance or homeowners insurance in California can be a very time-consuming activity. California auto insurance rates and California homeowner insurance rates can vary widely by insurer. There are so many insurance companies that do business in California that an individual may never know if he or she is getting the best deal possible.
One of the ways to avoid all of the confusion of trying to compare different insurance companies is to go to an insurance broker. An independent broker or a broker that only represents one company can be a great source of information when you need to buy insurance.
Brokers are well trained in all aspects of the insurance products that they sell. They must pass vigorous tests and receive a license from the state that certifies that they are qualified to sell a particular line or lines of insurance.
A California auto insurance or homeowners insurance broker can intelligently discuss all of the different types of coverage that might be appropriate for your particular situation. If you have any questions about whether it is wise to buy comprehensive coverage on an old car or what you can do to lower your premiums on your California homeowner policy, your broker can certainly answer them for you.
Going to an Independent Insurance broker in California is a little different than going to a broker dedicated to just one company. You will usually get a lower rate through an Independent broker because they deal with many different insurance companies. On the other hand, dealing with a single, national insurer may provide you with more stability and a wider array of insurance product.
So, in conclusion, if you do not like doing research and do not have the time to shop around, a broker may be the best choice when you need California insurance. You do not pay more for using the services of a broker than doing it yourself. It is also nice to know that you have someone to call just in case you have a problem with your insurance.
People that own and drive a vehicle in California are required by law to carry liability insurance to compensate for injury or damage to another party or another party’s property that was a result of their own negligence. The law does not require you to protect yourself from either personal injury or property damage to your own vehicle.
California auto insurance minimum liability coverage is required whether you own your car outright or you are making payments to a finance company. If you have a high mileage car that is paid off, you do not have to carry comprehensive coverage, but you still are required to carry the state minimum liability coverage of 15/30/5.
A minimum 15/30/5 California car insurance policy will pay up to $15,000 to a single injured party or up to $30,000 for all occupants injured as a result of an accident you were found to have caused. It will also pay up to $5,000 in compensation for any property damage you may have caused as a result of the accident.
Comprehensive insurance coverage pays out if your car is stolen, damaged by vandalism, flying road debris, acts of nature or any other incidents that are not the result of a collision. Whether you should carry this type of coverage depends largely on the book value of your vehicle.
If you have a 20-year-old car worth $1,000 and it gets stolen, the best you could hope for is a check for $1,000 from the insurance company. If it costs you $200 extra to carry this coverage, you may decide it is better to assume the risk than pay the extra premium. Others, who are very risk averse may choose to pay the extra premium and have some more peace of mind.