California's Auto Insurance Policy Bill

Insuring a four-wheeler can be quite some work in America, and even more so in California. That's because the state of California figures among the costliest insurances provided in America. Nevertheless, there are many options open to a person seeking vehicle insurance in California, and that only means that one has to be all the more careful in choosing one.

The California State Insurance authority, called the CALIFORNIA DEPARTMENT OF INSURANCE, in accordance with the Assembly Bill (AB 2677) dictates that "Effective January 1, 2005, the law requires every admitted insurer selling private passenger automobile insurance policies to provide consumers with a cost estimate of its lowest priced personal auto policy at the limits the consumer requests and for which the consumer is eligible. This mandate may be met by either (1) maintaining a toll-free telephone and/or (2) maintaining an Internet Web site where consumers can obtain a cost estimate or be referred to an insurance agent/broker who will provide the estimate.", according to a statement released on its website.

The bill also states that the information of the insurer should be provided to the California Department of Insurance. This step was taken to help the consumers shopping for an automobile insurance policy. Anybody looking for vehicle insurance in California is thus provided with all the information available so as to make an informed decision in this regard. It is very easy to request for car insurance quotes from different insurance companies and then choose an insurer that offers the best deal.

The State of California defines a pre-requisite of a fixed amount of certain insurance for the car to be eligible for registration. A proof of such insurance must be provided for registering a car in California. Also, any kind of automobile loans require that insurance be made on the vehicle, which is mostly collision insurance along with the state imposed liability insurance. Liability insurance ensures the payment of money in cases where the car is destroyed or damaged before payment is complete. This automatically imposes the importance of Car Insurance Quotes, also keeping in mind that insurance rates keep changing and it’s hard to keep track otherwise.

There are some minimum requirements for a California car insurance policy, in accordance with the financial responsibility laws. All car drivers and owners must have a minimum specified dollar amount of liability insurance coverage while driving. Liability covers car drivers in situations where injuries or damages are inflicted in a car accident. The insurers in California are required to offer liability coverage meeting or exceeding the following dollar amounts, as policies:

1. $15,000 – minimum liability to pay a person injured per accident.
2. $30,000 – minimum liability coverage for all parties injured per accident.
3. $5,000 – minimum liability coverage for damages / destruction of property per accident.

Personal Injury Protection (PIP) and No-Fault Coverage are not required by the state. Additionally, the California Low Cost Automobile Insurance Program (CLCA) was instituted for those could not afford even this minimum insurance but have good driving records.

Also of considerable importance are the factors that affect Car Insurance Rates. When it comes to auto insurance rates, who you are determines what you pay. In short, it depends on:

1. Driving Record
 The premium for insurance is higher for those drivers who have been involved in an accident in which they were found guilty or ones that have traffic convictions on record. This is because, studies have revealed that such drivers generally tend to repeat their accidents or violations within next 3 years.

2. Family Members
 Insurance companies also look into the family members who have access to the car. A teenage son in the family who drives the car may shoot the premium up a little.

3. Car Make
 The amount you pay for insurance may also depend on the model of your car. Some cars may be considered risky because of high repair costs, frequency in accidents, or being popular with thieves. Similarly, a flashy sports car or a high performance model will raise the premium amount.

4. Marital Status
 Young married drivers are seen to be involved in accidents less frequently than young single drivers. As such, they are charged lesser after marriage.

5. Place of living
 Insurance rates are regulated based on the state, and also different locations in a state. This may be because of differing accident risks, theft risks, weather conditions, repair costs, etc.

6. Age
 Generally, drivers under 25 years of age tend to be in accidents more frequently and thus have to pay more. Drivers between 50 and 65 are offered discounts on the same basis. Above 65, the rate increases again, and insurers tend to refuse insurance.

7. Gender
 Since men under below 25 years are three times probable than female drivers in same age, to be in an accident, the insurance will cost more for them.

There has been a rising demand for regulations with regard to insurance companies and premiums. Proposition 103, a sweeping 1988 insurance reform initiative, requires that a driver be charged premiums based on his driving ability and past record rather than his place of living. A driver's safety record, number of miles driven per day and driving experience should factor in more than his ZIP code, if the regulations are effected. Such moderations increase the level of competition between Insurance companies who are, essentially looking for business. This leads to insurers offering lower interest rates, perks and discounts. This amount of competitiveness shows in the quotes.

California is seeing a rise in the number of uninsured motorists. The biggest problem is that in a large state like California, it’s nearly impossible to know the exact number of uninsured drivers. Most of the agencies state that approximately one third of the drivers on the roads of California are either underinsured or uninsured. They generally drive most unreliable and unsafe cars, and are the least careful drivers. Nearly one out of every two-car accidents is caused by an uninsured or inadequately insured driver. The Insurance Research Council, or the IRC, estimates that 22% of the 26 million registered drivers in California are uninsured. To protect drivers in cases of accidents caused by such drivers, there exists an Uninsured Motorist Policy.

Altogether, it is seen that most people stick with their Insurer even when it over charges them because of their history with them, or the hassle of shifting, or the general misbelief that the new company will place them in a high risk category, and many such reasons. If only one keeps an eye out for quotes from different insurers, then a lot of money can be saved on insurance.