Compare Insurance Rates & Save

California Insurance (CA)

California Insurance: What drivers should keep in mind while purchasing an insurance
The law in the State of California makes it mandatory for all drivers to have car insurance. Consequently, majority of the drivers are on the look out for car insurance at cheaper rates and insurance companies are also coming forward with the supply. According to the law, drivers can be meted with civil penalties in case they don't have car insurance. Drivers without insurance in California may also have to do away with their license if they are found involved in any accident. While driving, drivers must also not forget to carry a proof of their car insurance. Drivers failing to show proper evidence of insurance if asked for by the authority can also be issued a ticket. Keeping in mind the strict statutory laws in this state, drivers looking for a cheaper deal should make sure that the insurance policy complies with the bare minimums of the statutes.

As a privilege to drivers involved in chosen professions, good drivers, senior citizens as well as students, insurance companies in California has come up with auto insurance policies at affordable prices. The most effective way of availing low price insurance is to keep an eye on the discount insurance offered by the companies. A driver can be entitled for discounts on all policies if he has bought more than one insurance policy from the same company. The premium can be brought within easy reach by increasing the deductible. Additional discounts can also be availed by keeping anti-theft devices and also restricting the mileage of the vehicle.

Disparities are found amongst various cheap auto insurance companies. The state of California allows insurance companies to fix their own premiums on the basis of their loss histories. As a result, the rates are not uniform for all companies and the payout expenditure borne by them also plays a role in the rate. Thus, while looking for cheap insurance, it is necessary that you tally the rates of companies in different areas. However, the comparison needs to be made on the same policies. The decision, thus, reflects that it was made on the company reputation and not the differences in policies.

It has been made compulsory by the California Compulsory Financial Responsibility Act for all people driving vehicles to have insured for a minimum level. The probabilities of civil penalties in case of non compliance with this law should be reason enough for being insured. However, most of the cheaper insurance policies are found to be meeting the minimum statutory standards. Needless to say, that while purchasing any such cheap car insurance, it will be wise to form a clear idea about the risks associated with the policy. But keep in mind that the most judicious step would be to go for the highest amount policy you can afford to remain on the safer side.

California Car Insurance Requirements
The Law in California mandates all motorists to be covered for physical injury and property damage by their respective insurance policy. The minimum coverage that is applicable for bodily injury is $15000 to every injured person for all sorts of accident and $ 30000 to all people, who were injured in a particular accident. For property damage, the minimum coverage amount is fixed at $5,000 in case of damage or injury of other's property in a particular accident.

Uninsured Motorist Coverage may be included in optional insurance policies. The policy holder can opt for this with the condition that the cost of the policy purchased by him will be the same as that of the minimum amount of the needed bodily injury coverage. However, the coverage plan for Underinsured Motorist can be availed at a cheaper cost if the policy holder decides to buy a policy exceeding the needed coverage amount for bodily injury. As per the state laws in California, insurance companies can limit their uninsured motorist coverage to $30,000 and $60,000 for personal injury and for all persons, respectively, in a particular accident.

Also, the law necessitates that Underinsured Motorist Coverage should be included if Uninsured Motorist Coverage is bought. The state also urges Insurance Companies to make Underinsured Motorist Coverage available at the same amount as that of Uninsured Motorist Coverage. However, companies are also free to offer Underinsured Motorist Coverage exceeding the amount of Uninsured Motorist Coverage, originally bought by the policy holder.

The statutes of California also specifies the liability limit to be $20,000 and $30,000 for the physical injury of a person and for meeting medical dues and wage compensation in an accident, respectively. However, for meeting the expenses associated with damage repairing, parts replacement for a vehicle not owned by the policy holder, the property damage coverage can be up to $5000.

California statutes haven't yet made personal Injury Protection (PIP), mandatory along with No-Fault Coverage. Also, the choice of adding up collision coverage and comprehensive coverage to an existing insurance policy is kept open at the discretion of the policy holder.

More About California
California lies in the Western coast of United States, and is one of the most populated states of the United States. It is the third largest state in terms of area, which was originally inhabited by the Native Americans of Asian origins, who had started settling there, in and around 16th century. There have been huge developments since then, and today the State Of California boasts of having 478 cities, the majority of which are metropolitan. As per the records, 68% of the 37 million people of California live in the two metropolitan areas of the State. California is also a centre of the major earthquakes of the world, and has many times witnessed some of the worst quakes of the world. In order to minimize the damage that is caused by this natural calamity, The Geological Survey of California is making extensive study and researches, so as to detect strong ground motions of the earth, make specific evaluations of the faults in the earth, so as to make it possible. In order to save lives and property, most of the houses in California are being made to make them quake resistant.

California enjoys some of the beautiful natural features, having being bordered by the Pacific Ocean, Oregon, Nevada, Arizona and Baja California. It has some of the tallest mountain ranges of the world, the hot deserts and also miles of picturesque coastlines. California is a vast state, and hence the different regions enjoy different kinds of climates, that are highly dependant on the latitude, elevation and proximity to the coast. There are manly two seasons, the cool winter season and the dry season. The winter is usually short, but the summer is long and dry and can extend up to nine months. The oceans help to moderate the temperatures of the coastal regions, and hence San Francisco and the nearby areas, usually have a cool summer, that is mainly caused by the fog rolls in off the ocean. The summers are usually cooler than the late springs or the early autumns. Another feature of the climate of San Francisco is that, it experiences a scarcity of water in most of the long summer months.

California is well connected, by a large number of freeways, expressways and many highways. All these are very well maintained by the Caltrans and are patrolled by the California Highway Patrol. Most of these highways are non toll roads, making it more suitable to travel by car. California is known for its car culture, and it is said that it was designed for cars. Cars are considered to be a necessary, if you desire to live in California for a longer period. Most of the tourist destinations, the shopping centers, and also the workplaces are built with an assumption that the visitors possess cars. It is considered to be a disadvantage for those residents who do not possess a car, and in order to discourage pedestrians, there are many streets that are without sidewalks. Thus, most of the residents of California, own cars, and this is a major cause of the different traffic snarls. There are many traffic rules and regulations that you are required to follow, if you have your own car. Insurance is very important, and whenever you are traveling, you should possess your insurance papers, so that you can present them to the officers when they demand. In case of foreigners, visiting the city, and hiring a car, special precautions should be taken, in order to check the insurance of the car and also whether the owner of the car is insured or not. The drivers of the cars are also required to be insured, especially for third party insurance. Accidents are inevitable, and hence insurance is made mandatory, not just in order to recover from the financial law suits involved, but also in order to secure the financial health. In case of accidents, whether you caused it or not, you are very likely to be involved in crippling legal and medical fees. Hence, in order to overcome all this, insurance has been made mandatory, in California.

California Department of Insurance
Consumer protection is assured and taken care of by the California Department of Insurance. The Department also ensures that the insurance market stays lively and runs steadily. Also the department endeavors to maintain the openness and equitability of the regulatory process and make sure that the enforcement of the law is done in a just and unbiased manner.

After its inception in 1868, the California Department of Insurance (CDI) has encountered many historical changes. The passing of Proposition 103 by voters in this state in 1988 increased the authority and responsibility of this department in the areas of casualty and property. This proposition brought a shift in the status of the Insurance Commissioner. It was turned to an elective post to be voted the people of California from an earlier position appointed by the Governor. The proposition also made it compulsory that rates of property and casualty company rates be approved by the department before implementation. This has, however, heightened the role of the department in consumer protection.

During the early years of the 20th century, new anti-fraud insurance legislation passed by the state Legislature added the responsibilities of a law enforcement agency along with all its regular functions. Sworn peace officers were allowed to probe and arrest people involved in frauds by the legislation. Such actions taken by the officers led to direct cost savings for the benefits of consumers in the form of lower premium.

All the professional activities and rates fixed by the insurance companies, brokers and agents in the state of California are licensed and monitored by the California Department of Insurance. Presently the department licenses more than 1,500 insurance companies along with more than 3,40,000 brokers and agents. The primary source of fund for this department comprises of premium tax along with license, Proposition 103 recoupment and other fees. Presently, there are more than 1,300 employees struggling and working hard to safeguard the interests related to consumer insurance.

Regulatory Authority and Enforcement
Being a state regulatory agency, the CDI is authorized to supervise and regulate the business transactions of the insurance industry within the state of California. The points mentioned below explicitly talks about the areas where the department can exercise its authority on a day-to-day basis:
  1. The ultimate enforcement option that is available with the Department is legal action. These may be in the form of Cease and Desist order, administrative law hearings, non-compliance notice. However, the possibilities of charging licensees with fines and penalties are also strong.
  2. Another endeavor of this department is to help consumers by regulating the marketing and administration policies of the insurance companies. While doing this, the department ensures that the business is carried out with honesty, openness and in a just manner.
  3. As per the California Insurance Code (CIC), licensing examinations are conducted amongst brokers and agents by the Department to find verify violations of CIC by licensees.
  4. The Departments efforts towards probing and arresting people involved with fraudulent insurance activities is meant to shield commoners from incurring financial loss and also related harassment and stress. Investigations on fraudulent activities by agents, companies as well as claimants are carried on to the last limit of the law.
  5. Prior to starting business, insurance companies willing to carry on business within the sate of California needs to submit application to the department. It is only after the department's reviewing and approval that a company can sell insurance policies within the state.
  6. On the other hand, the department also pioneers and plays a crucial role in conserving and liquidating insurance companies, incurring huge loss and also helps them rehabilitate, under the guidance and appointment of the Superior Court.
  7. The Proposition 103 makes provision for the Rate Regulation Branch. This branch is entrusted with the responsibility to review the rates proposed for personal auto and homeowners insurance and make sure that the rates are just, logical and good enough to the interests of both the parties.
  8. The Department also functions in a very significant manner by scrutinizing the major financial statements and also holding audits of Insurance companies in California. By doing so, the department supervises the economic health of the insurance industry in its totality, only to help companies stabilize their business and policy holders reap proper benefits avoiding losses.

Contact California Insurance Commissioner -- John Garamendi
California Department of Insurance
Consumer Services Bureau
300 South Spring Street, South Tower
Los Angeles, CA 90013
1-800-927-HELP (4357)
Out-of-state 213-897-8921
Los Angeles Office
300 S. Spring St., South Tower
Los Angeles, CA 90013
213-897-9051 (fax)
San Francisco Office
45 Fremont Street, 23rd Flr.
San Francisco, CA 94105
Sacramento Office
300 Capitol Mall, Ste. 1700
Sacramento, CA 95814
916-445-5280 (fax)