California Auto Insurance Information

The General® is pleased to provide auto insurance in California. We offer low cost auto insurance online even if you have a less than perfect driving record, have never been insured before, have let your policy lapse, or have had your coverage suspended or revoked.

We've provided some information below that we hope will be helpful in answering some of the more common questions we've received from our customers.

Mandatory Minimum Level of Coverage
California's Compulsory Financial Responsibility Law requires every driver and owner of a motor vehicle to be financially responsible for their actions. The statutory minimum limits of liability insurance are:

Bodily Injury
- $15,000 for the death or injury of any one person, any one accident
- $30,000 for all persons in any one accident
Property Damage
- $5,000 for any one accident

Consumer Rights/Protections Related to California Auto Insurance
California Proposition 103: In November of 1988, Proposition 103 (Prop.103) was enacted into law by the voters of California. It provides many consumer protections related to purchasing and maintaining auto insurance.

View the California Proposition 103 Fact Sheet for more information.

Frequently Asked Questions Regarding California Auto Insurance
What Happens If I Don't Carry Auto Insurance?
In California it's mandatory to have Proof of Insurance at all times. Not providing Proof of Insurance when it's requested may result in a fine or suspended license. The General can provide instant Proof of Insurance for California drivers.
What Are the Penalties for Driving Without Liability Insurance?
Judges can impound the vehicles of frequent, flagrant violators. If you provide false evidence of auto insurance coverage and your driver's license is suspended, the suspension cannot be lifted until you demonstrate genuine Proof of Insurance.
When Must You Show Proof of Insurance?
The Legislature passed a law requiring motorists to produce Proof of Insurance before the Department of Motor Vehicles renews vehicle registration. The legislation also requires motorists to display Proof of Insurance when stopped by a police officer for traffic violations.
How Do I Prove I Have Insurance?
Your insurance company will send you a Proof of Insurance card listing the covered automobiles and drivers and showing the policy number and expiration date. Your policy or a temporary binder is also acceptable evidence of insurance.
What if you're currently driving without coverage? The General® offers instant Proof of Insurance when you buy auto insurance online at our Web site.


Great Car, Great Value, Great Performance

Pros: Great fuel economy, great ride, great value!
Cons: None

Months ago my daughter and I went looking for a new vehicle for her. We test drove both the Saturn Vue SUV and the Aura 4 door sedan. We liked both vehicles but she really wanted the Vue so she got that Saturn.

However, I really liked the Aura and thought it was a great value. So when they offered 0% interest for 72 months, I went and bought one as a third vehicle for my wife and me. The other two vehicles we have are a Dodge pick-up and a Jeep Wrangler. We like them both, but they are not great on gas mileage. So we wanted a third vehicle that got great gas mileage. Plus the insurance on the Dodge truck is high for some unknown reason to me or the insurance agent. By buying the Aura, making the truck a "pleasure" vehicle or whatever they call it, and the Aura my primary vehicle, we might actually owe about the same for insurance. The Saturns as found out from my daughter, have VERY LOW insurance rates due to the many safety features on their vehicles.

The ride of the Aura is smooth and it handles very well. The 4 cyc engine has excellent performance. I mean if it works great in my daughter's Vue which is 1500 lbs or so heavier, you have to imagine that it performs great in the Aura and it does.

The seats are also comfortable and the ride is also very quiet. We pretty much have the basic Aura and it came with everything we could imagine we needed.

The basic stereo system sounds incredible. I love XM and sat radio. Anyone who has driven through West Virginia searching for a conventional AM and FM station without success will appreciate XM radio. On-Star is also wonderful especially if you are a dad with kids and a wife you want to have On-Star enabled in the vehicle to help give you peace of mind.

I also noticed that the Aura is rated higher by consumers on the Consumer Report website over the Honda's and the Toyota's. Yes folks, GM has finally started producing great vehicles, great quality, and at a competitive price. Take one out for a test drive. You'll like it!


Cheapest Cars to Insure

Nobody wants eye-popping auto insurance premiums in addition to monthly car payments. So if you're considering purchasing a small sedan, not factoring in your personal driving records, the Honda Civic is the least expensive car to insure in that niche. Conversely, a Mitsubishi Lancer Evolution 4WD is the most expensive.

If the market for large luxury SUVs has caught your eye, a Land Rover LR3 will keep your insurance pain to a minimum, while a Porsche Cayenne will maximize it.

Those and other insurance-related facts are compiled by the Highway Loss Data Institute (HLDI), a non-profit organization dedicated to reducing the deaths, injuries and property damage stemming from auto crashes. Supported by auto insurers, HLDI rates vehicles based on what insurance companies pay out in losses for various makes and models.

Least & Most Expensive Car to Insure
Least Expensive Most Expensive
Small Sports Car Pontiac Solstice - 73 Honda S2000 - 196
Midsize Luxury SUV Volvo XC90 - 62 Cadillac SRX - 129
Small SUV Jeep Wrangler LWB 2-door - 63 Mitsubishi Outlander - 120
Midsize Luxury BMW 3 Series Wagon - 58 BMW M3 - 301
Small Pickups Dodge Dakota Quad Cab - 75 Mazda B plus 4WD - 160
Small Four-door Honda Civic - 105 Mitsubishi Lancer Evolution 4WD - 437
Midsize Four-door Subaru Outback 4WD - 72 Nissan Maxima - 137
Large Luxury SUV Land Rover LR3 - 53 Porsche Cayenne - 121
Above are a few collision averages gleaned from HLDI data. The least expensive vehicle to insure in the category is first, followed by the most expensive with corresponding collision damage scores.

HLDI data looks at six insurance coverage areas, including property damage liability and personal injury protection. However, payouts pegged to collision damage are the key indicator used here.

"Collision damage is one of the big things that insurers pay for," HLDI spokesman Russ Rader said. "If a vehicle that you're looking at has very high losses under collision coverage, insurers are paying out a lot of money to repair that vehicle. Therefore, you're likely to pay more to insure it."

HLDI's stats cover 2004-06 vehicles and include accidents that occurred up to May 31, 2007. The vehicles being examined have only been sold once and have been assigned numerical collision-damage scores, with 100 representing the average collision loss for all vehicles in a given category.

The Lincoln Town Car's category-leading 96 means it fares 4 percent better than average when it comes to collision losses that insurance companies pay for very large luxury cars. The 459 score generated by the basement-dwelling Maserati Quattroporte is 359 percent worse than average.

See 2008 Porsche CayenneIt's not difficult to divine from those scores that the Lincoln will cost considerably less to insure than the Maserati.

In the large pickup truck category, the Dodge Ram 1500 Mega Cab got a 53, which is 47 percent better than the average for its large-pickup brethren. Listed at the bottom of the pack was the Nissan Titan King Cab, which received a 121.

The cheapest car to insure among midsize sports cars is the Ford Mustang GT convertible, which earned a 100. On the other hand the Dodge Viper convertible, with its 865 collision-damage score, would appear to be an insurance nightmare.

Of course insurance companies take other things into account when determining how much your auto insurance will cost, said Carolyn Gorman, of the Insurance Information Institute. "A lot of different factors, such as your driving record and where you live, will affect your auto insurance premium," Gorman said, adding that age, gender, credit history and miles driven each year also play a part.

But a major component affecting auto insurance premiums is within your control. To find out if a new vehicle you've been eyeballing has high collision-damage losses, visit HLDI's Web site at www.iihs.org. Click on 'Research & stats,' then click on 'Insurance losses by make and model.'

"Generally speaking, as you look at the data one of the things you'll see is big and boring sedans have lower insurance costs," Rader said. "So vehicles that don't go fast and don't have a lot of extra parts that are easily damaged in a crash are going to have lower insurance losses. If you're looking at a European luxury car, or a souped-up high performance car, you're likely going to pay more to insure it."

most popular new cars on aol autos

most popular new cars on aol autos
1. BMW 135
2. Toyota Yaris
3. Honda Civic
4. Honda Accord
5. Honda Fit
6. Volkswagen Jetta
7. Toyota Prius
8. BMW 550
9. Honda CR-V
10. Volkswagen Rabbit


Do I Need Uninsured Motorist Coverage on My Auto Policy If I Have Medicare Or Health Insurance?

This is a very common question that we encounter in our practice. I’ve even heard of insurance agents who expressed the opinion that people do not need uninsured motorist coverage on their auto policy if they have health insurance or Medicare. The reasoning seems to be that following an accident their medical bills would be covered. Unfortunately, this reasoning fails to take into consideration all of the other benefits available from uninsured motorist coverage to someone who’s been seriously injured in an auto accident or to the estate of someone who has been killed.

The purpose of uninsured motorist coverage is to compensate the insured for all of the elements of damage they would have been entitled to receive from the person causing the accident, but who carried no bodily injury insurance, or very low limits of coverage. In Florida, those damages would include: pain, suffering, disability, scarring, disfigurement, mental anguish, loss of the enjoyment of life, lost earnings and earning capacity, as well as unpaid medical expenses incurred in the past, and those to be incurred in the future. Of this list of damage items, the only ones which would be covered by health insurance or Medicare would be “covered” medical expenses. Beyond having their medical expenses paid, someone carrying no uninsured motorist coverage, who was struck by an uninsured driver, would receive no compensation for all of the other elements of damage described above.

No one ever believes they will be involved in a serious motor vehicle accident. But every day throughout the state of Florida, hundreds of people are seriously injured who also believed it would never happen to them. Following a serious accident, the injured person will immediately begin to consider, who will compensate them for the substantial losses they have incurred and those which will be incurred in the future. Losses such as pain, suffering, loss of enjoyment of life, as well as loss of earning capacity and earnings are very commonly encountered in relatively routine motor vehicle accidents. In the more serious accidents, all of these losses may be incurred, particularly those which involved the death of a loved one. People naturally become angry and frustrated when they have been struck by an uninsured driver, only to discover their own policy of insurance does not include uninsured motorist coverage.

There is something else to consider about carrying only Medicare or health insurance. If there is any liability coverage available to provide compensation of one’s injuries, even though it may be woefully inadequate, Medicare and virtually all health insurance policies, have reimbursement rights. Federal statutes require reimbursement of benefits provided by Medicare and employer sponsored health insurance plans when the injured person receives compensation for their injuries. Most other health plans contain reimbursement rights which are regulated under state law, including Florida. This means that when someone’s health insurance or Medicare provides benefits to them following an accident, those benefits are subject to being paid back if the injured person is successful in getting even minimal compensation from the party responsible.

Therefore, the only way someone may protect themselves is to carry the maximum amount of uninsured motorist coverage they can afford. We urge our clients to examine their declaration sheet on their auto policy, determine what coverage they actually have purchased, and call their agent to get a quote for uninsured motorist or additional uninsured motorist coverage.


Cell Phones and Driving

In the United States over 254 million people subscribed to such wireless communication devices as cell phones as of February 2008, compared with approximately 4.3 million in 1990, according to the Cellular Telecommunications & Internet Association.

Increased reliance on cell phones has led to a rise in the number of people who use the devices while driving. There are two dangers associated with driving and cell-phone use, including text messaging. First, drivers must take their eyes off the road while dialing. Second, people can become so absorbed in their conversations that their ability to concentrate on the act of driving is severely impaired, jeopardizing the safety of vehicle occupants and pedestrians. Since the first law was passed in New York in 2001 banning hand-held cell-phone use while driving, there has been debate as to the exact nature and degree of hazard. The latest research shows that while using a cell phone when driving may not be the most dangerous distraction, because it is so prevalent it is by far the most common cause of this type of crash and near crash.


* Studies: Studies about cell-phone use while driving have focused on several different aspects of the problem. Some have looked at its prevalence as the leading cause of driver distraction. Others have looked at the different risks associated with hand-held and hands-free devices. Still others have focused on the seriousness of injuries in crashes involving cell-phone users and the demographics of drivers who use cell phones. Below is a summary of some recent research on the issue.

* In July 2007 the National Highway Traffic Safety Administration and the National Center for Statistics and Analysis released the results of their National Occupant Protection Use Survey (NOPUS), which found that in 2006 5 percent of drivers used hand-held cell phones, down from 6 percent in 2005, the first decline since the survey began tracking hand-held cell phone use in 2000. The decline in use occurred in a number of driver categories, including female drivers (down from 8 to 6 percent), drivers in the Midwest (down from 8 to 4 percent), drivers age 25 to 69 (down from 6 to 4 percent) and drivers of passenger cars (down from 6 to 4 percent) to name but a few. NOPUS is a probability-based observational survey. Data on driver cell-phone use were collected at random stop signs or stoplights only while vehicles were stopped and only during daylight hours.

* A survey of dangerous driver behavior was released in January 2007 by Nationwide Mutual Insurance Co. The survey of 1,200 drivers found that 73 percent talk on cell phones while driving. Cell phone use was highest among young drivers.

* Text messaging, or “texting” by teens, a driving distraction related to cell phone use, was the subject of an August 2006 Teens Today survey conducted by the Liberty Mutual Research Institute for Safety and Students Against Destructive Decisions (SADD). The survey showed that teens considered sending text messages via cell phones to be their biggest distraction. Of the teens surveyed, 37 percent said that text messaging was extremely or very distracting, while 20 percent said that they were distracted by their emotional states and 19 percent said that having friends in the car was distracting. The January 2007 survey by Nationwide found that 19 percent of motorists say they text message while driving.

* Motorists who use cell phones while driving are four times as likely to get into crashes serious enough to injure themselves, according to a study of drivers in Perth, Australia, conducted by the Insurance Institute for Highway Safety. The results, published in July 2005, suggest that banning hand-held phone use won’t necessarily improve safety if drivers simply switch to hand-free phones. The study found that injury crash risk didn’t vary with type of phone.

* Many studies have shown that using hand-held cell phones while driving can constitute a hazardous distraction. However, the theory that hands-free sets are safer has been challenged by the findings of several studies. A study from researchers at the University of Utah, published in the summer 2006 issue of Human Factors, the quarterly journal of the Human Factors and Ergonomics Society, concludes that talking on a cell phone while driving is as dangerous as driving drunk, even if the phone is a hands-free model. An earlier study by researchers at the university found that motorists who talked on hands-free cell phones were 18 percent slower in braking and took 17 percent longer to regain the speed they lost when they braked.

* A September 2004 study from the NHTSA found that drivers using hand-free cell phones had to redial calls 40 percent of the time, compared with 18 percent for drivers using hand-held sets, suggesting that hands-free sets may provide drivers with a false sense of ease.

* A study released in April 2006 found that almost 80 percent of crashes and 65 percent of near-crashes involved some form of driver inattention within three seconds of the event. The study, The 100-Car Naturalistic Driving Study, conducted by the Virginia Tech Transportation Institute and the National Highway Traffic Safety Administration (NHTSA), breaks new ground. (Earlier research found that driver inattention was responsible for 25 to 30 percent of crashes.) The new study found that the most common distraction is the use of cell phones, followed by drowsiness. However, cell-phone use is far less likely to be the cause of a crash or near-miss than other distractions, according to the study. For example, while reaching for a moving object such as a falling cup increased the risk of a crash or near-crash by nine times, talking or listening on a hand-held cell phone only increased the risk by 1.3 times. The study tracked the behavior of the 241 drivers of 100 vehicles for more than one year. The drivers were involved in 82 crashes, 761 near-crashes and 8,295 critical incidents.

* These findings confirm an August 2003 report from the AAA Foundation for Traffic Safety that concluded that drivers are far less distracted by their cell phones than by other common activities, such as reaching for items on the seat or glove compartment or talking to passengers. That study was based on the analysis of videotapes from cameras installed in the vehicles of 70 drivers in North Carolina and Pennsylvania.

* State and Federal Initiatives: The number of state legislatures debating measures that address the problem of cell-phone use while driving and other driver distractions continues to rise. As of March 2008 four states — Connecticut, New Jersey, New York and Utah — plus the District of Columbia had laws on the books banning the use of hand-held cell phones while driving. Similar laws in California and Washington State go into effect in July 2008. Except for Utah and Washington State, the laws are all “primary enforcement,” meaning a motorist may be ticketed for using a hand-held cell phone while driving without any other traffic offense taking place.

* About 17 states have passed laws banning or restricting young drivers from using cell phones. The most recent state to enact such legislation is California. But the California law goes farther than any other state’s. It bans the use of any mobile device by drivers under age 18. This includes a cell phone, a broadband personal communication device, specialized mobile radio device, handheld device or laptop computer.

* In May 2007 Washington become the first state to ban the practice of texting with a cell phone while driving; New Jersey passed a similar law that took effect on March 1, 2008. In Washington, the fine for DWT (driving while texting) is set at $101, but since it is a secondary offense a driver must be pulled over for some more grievous infraction before the penalty can be imposed. In New Jersey the fine for DWT is $100, but the state has made the offense one of primary enforcement (see above). In Connecticut drivers can be fined $100 not only for using a cell phone, but those pulled over for speeding or other moving violations can be fined for other driving distractions such as putting on makeup or turning to discipline children in the back seat. In New York, the first state to enact such legislation, in 2001, drivers face fines of $100 for the first violation, $200 for the second and $500 thereafter.

* Businesses: Businesses are increasingly prohibiting workers from using cell phones while driving to conduct business. Exxon Mobil and Shell are examples of large companies that ban employees’ use of any type of cell phone while driving during work hours. The California Association of Employers recommends that employers develop a cell phone policy that requires employees to pull off the road before conducting business by cell phone.

* Court Decisions: In December 2007 International Paper Co. agreed to pay a $5.2 million settlement to a Georgia woman who was rear-ended by one of its employees. The employee was driving a company car and talking on a company cell phone at the time of the accident. The settlement was reached even though the employee had violated her company’s policy of requiring the use of hands-free headsets while driving. The suit is among the most recent of several cases where an employer has been held liable for an accident caused by a driver using a cell phone. (See background section on Employer and Manufacturer Liability.)


Cell phones play an integral role in our society. However, the convenience they offer must be judged against the hazards they pose. Inattentive driving accounted for 6.4 percent of crash fatalities in 2003—the latest data available—according to the U.S. Department of Transportation. Inattentive driving includes talking, eating, putting on make up and attending to children. Using cell phones and other wireless or electronic units are also considered distractions.

As many as 40 countries may restrict or prohibit the use of cell phones while driving. Countries reported to have laws related to cell phone use include Australia, Austria, Belgium, Brazil, Botswana, Chile, the Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Ireland, Israel, Italy, Japan, Jordan, Kenya, Malaysia, the Netherlands, Norway, the Philippines, Poland, Portugal, Romania, Russia, Singapore, the Slovak Republic, Slovenia, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, Turkmenistan, the United Kingdom and Zimbabwe. Most countries prohibit the use of hand-held phones while driving. Drivers in the Czech Republic, France, the Netherlands and the United Kingdom may use cell phones but can be fined if they are involved in crashes while using the phone. Drivers in the United Kingdom and Germany also can lose insurance coverage if they are involved in a crash while talking on the phone.

Supporters of restrictions on driving while using a cell phone say that the distractions associated with cell phone use while driving are far greater than other distractions. Conversations using a cell phone demand greater continuous concentration, which diverts the driver’s eyes from the road and his mind from driving. Opponents of cell phone restrictions say drivers should be educated about the effects of all driver distractions. They also say that existing laws that regulate driving should be more strictly enforced.

Employer and Manufacturer Liability: Although only a handful of high-profile cases have gone to court, employers are still concerned that they might be held liable for accidents caused by their employees while driving and conducting work-related conversations on cell phones. Under the doctrine of vicarious responsibility, employers may be held legally accountable for the negligent acts of employees committed in the course of employment. Employers may also be found negligent if they fail to put in place a policy for the safe use of cell phones. In response, many companies have established cell phone usage policies. Some allow employees to conduct business over the phone as long as they pull over to the side of the road or into a parking lot. Others have completely banned the use of all wireless devices.

In an article published in the June 2003 edition of the North Dakota Law Review, attorney Jordan Michael proposed a theory of cell phone manufacturer liability for auto accidents if they fail to warn users of the dangers of driving and talking on the phone at the same time. The theory holds that maker liability would be similar to the liability of employers who encourage or demand cell phone use on the road. Holding manufacturers liable would cover all persons who drive and use cell phones for personal calls. Michael notes that some car rental agencies have already placed warnings on embedded cell phones in their cars.


10 Most and Least Expensive Cars to Insure

10 Most-Expensive Cars to Insure

The 10 vehicles that account for the highest dollar amount of losses for insurance companies (starting with the most expensive) are:

Cadillac Escalade EXT 4WD
Subaru Impreza WRX 4WD
Hyundai Tiburon
Mitsubishi Lancer
Scion tC
Acura RSX
Nissan Sentra SE-R
Suzuki Forenza
Nissan Sentra/Mitsubishi Eclipse
Chevrolet Cobalt two-door

Source: Insurance Institute for Highway Safety, based on 2004-2006 models

10 Least-Expensive Cars to Insure

The 10 vehicles that account for the lowest dollar amount of losses for insurance companies (starting with the least expensive) are:

Ford Five Hundred 4WD (now the Ford Taurus)
Buick Rendezvous 4WD
Buick Lucerne/Buick Rainier 4WD/Honda Odyssey
Ford Freestyle 4WD/Subaru Outback 4WD
Buick Rendezvous/Honda Pilot
Chrysler Town & Country LWB
Honda Pilot 4WD
Buick LaCrosse/Chevrolet Uplander/Ford Escape/Volvo V70
Dodge Grand Caravan/Ford Freestyle 4WD
Ford Explorer 4WD/GMC Sierra 1500 4WD/Toyota Highlander/Toyota Sienna

Source: Insurance Institute for Highway Safety, based on 2004-2006 models


Teenagers and Safe Cars

If your teenager has just gotten a driver's license, it may be hard to imagine handing over the keys to your brand new car, but that may be the smartest vehicle to choose.

The first years teenagers spend as drivers are very risky. In fact, teen drivers have the highest death rates of any age group. In 1997 alone, more than 5,700 teenagers died in motor vehicle crashes, and many more were left severely and permanently injured by crashes.

While getting a driver's license is an exciting rite-of-passage for teens, it can be enough to make a parent frantic. However, the Insurance Institute for Highway Safety (IIHS) and the Insurance Information Institute (I.I.I.) say there is something worried parents can do to protect their teens—choose a safe vehicle.

Avoid vehicles that encourage reckless driving.
Teen drivers not only lack experience, but may also lack maturity. As a result, speeding and reckless driving are common.

Sports cars and other vehicles with high performance features, such as turbocharging, are likely to encourage speeding. Choosing a vehicle with a more sedate image will reduce the chances your teen will be in a speed-related crash.

Don't let your teen drive an unstable vehicle.
Sport utility vehicles, especially the smaller ones, are inherently less stable than cars because of their higher centers of gravity. Abrupt steering maneuvers—the kind that can occur when teens are fooling around or over-correcting a driver error—can cause rollovers where a more stable car would, at worst, skid or spin out.

Pick a vehicle that offers good crash protection.
Teenagers should drive vehicles that offer state-of-the-art protection in case they do crash.

Don't let your teen drive a small vehicle.
Small vehicles offer much less protection in crashes than larger ones. However, this doesn't mean you should put your child in the largest vehicle you can find. Many mid- and full-size cars offer more than adequate crash protection. Check out the safety ratings for mid-size and larger cars.

Avoid older vehicles.
Most of today's cars are better designed for crash protection than cars of six to ten years ago. For example, a newer, mid-size car with airbags would be a better choice than an older, larger car without airbags. Before you make a final choice on the car your teenager will drive, consult the U.S. Department of Transportation ( http://www.dot.gov ) or the Insurance Institute for Highway Safety ( http://www.iihs.org ).


I have liability insurance. If I lend my car out to a friend, will my insurance pay in case of an accident?

I have liability insurance. If I lend my car out to a friend, will my insurance pay in case of an accident?

Best Answer
Yes. However, does he have regular access to your car? If he borrows it more than once a month, or more than ten times a year, you should add him as an operator. Also, if he cracks it up, it's great that the other guy is covered, but . . .can you afford to buy a new car? Because you won't have any coverage for YOUR car.

New insurance and ongoing treatments of old injury? Which insurance applies?

New insurance and ongoing treatments of old injury? Which insurance applies?

Best Answer
Its up to the old insurance


Shopping for auto insurance

Savvy shopping for insurance requires a little more effort than many people tend to give it. Too many consumers simply grab the first price they come across or accept routine rate increases without digging further for a better deal. It is important to compare not only the price but the coverage and exclusions among carriers.

You don't want to find out after you file a claim that the new policy you purchased with the excellent premium does not include a type of coverage that you had with your previous carrier.

"It really pays to shop around," Dick Luedke, spokesperson for State Farm Insurance, told MSN Autos. "Premiums for exactly the same coverage can vary substantially from carrier to carrier."

Studies performed by Progressive Insurance between 1999 and 2004 reveal that six-month auto insurance rates vary significantly between companies, from an average low of $481 to an average high of $586 across the country. This means the same driver could receive a quote of $1,256 for a six-month auto insurance policy from one company and a quote of $775 for the identical policy from another company.

Another Progressive study reveals that only 20% of survey respondents said they had shopped around for better insurance rates in the last six months.

"Call around a lot," suggested Scot McCartney, spokesperson for Independent Insurance Agents of America. "Don't always grab the first quote you get. Make several calls, ask the same questions and be sure to get quotes on exactly the same coverage from each carrier."

It pays to mix it up
Call a couple of the larger carriers (State Farm, Allstate, Nationwide, SAFECO, etc.) and then check with a couple independent agents and phone-based carriers, such as GEICO or Amica, just to make sure you've covered your bases.

If you prefer to shop on the Internet, a number of services offer online price quotes. Web sites give you quick access to a number of quotes without ever picking up the phone. However, as convenient as they are, it's still advisable to consult other more traditional sources as well.

What to look for
When buying auto insurance, it's important to consider not only the price, but also the carrier and the coverage. As with any product, the value of a low price is quickly forgotten when you find out that the service or the quality of the product is not what you expected.

The old saying, "It's too good to be true" applies for insurance premiums as well. If the premium seems too low, be sure that you are getting all the coverage you need.

Check out the agent you'll be working with, advises the California Department of Insurance. Do you know and trust them? Also look into the insurance carrier itself. Is it a well-known and established company? Does it have the financial strength to pay its claims? You can obtain background and financial information on an insurance carrier from your state's department of insurance.

When talking with insurance agents, don't hesitate to ask a lot of questions. In addition to learning what coverage is offered and how much it costs, also ask about how claims are processed. Too often, people don't learn about the process until they have to make a claim. Knowing beforehand ensures you choose a carrier whose claim process is most convenient and appealing to you.

Don't forget to ask friends, neighbors and family who they are insured with and whether or not they like the service they receive. Often, they can provide personal examples of what went wrong and what went well when they had to file a claim.

Factors influencing rates
If your current rates seem particularly high (or low), you might want to know why. Indeed, if your rates (or quotes) are high, altering your lifestyle or vehicle choice can have a big effect on the rates you pay.

While criteria may vary slightly from carrier to carrier, according to State Farm's Luedke, the major determining factors fall into four basic areas:

You. Your age, gender, marital status, driving record and record of prior claims play a major role in determining your risk level and therefore the premium you will pay. Traditionally, males under 25 years of age represent the highest risk, while married, middle-aged, non-smoking mothers represent the lowest.

Where you live. Living in an urban area typically triggers higher rates due to increased incidence of theft and accident claims -- both of which are statistically higher in and around cities.

Your vehicle. The type of vehicle you drive greatly affects the rates you pay. Vehicles that have a high frequency of claims (sports cars) or are expensive to repair (luxury cars, SUVs) are prone to higher premiums. However, larger vehicles tend to be safer in collisions, which sometimes offsets costs.

How you use your vehicle. Statistically, the more miles you drive, the greater chance you have of being involved in a crash. High annual mileage will result in higher premiums.

Another way to reduce your premium is to increase the amount you self-insure by increasing the deductible amounts on the property damage coverage for your own vehicle. These deductible amounts on your comprehensive and collision coverages may be limited if you have the vehicle leased or financed, so check your financing contract before raising your deductibles too high.

Deciphering the code
Once you've begun researching insurance coverage, it won't be long before you come across liability limits displayed in an X/Y/Z form. These are the maximum limits of coverage for bodily injury or property damage that you become legally responsible for.

For example, 100/300/50 means you're covered for a maximum of $100,000 bodily injury per person, $300,000 bodily injury per incident and $50,000 property damage per incident.

You may also see the liability limit stated as a single amount, called a combined single limit. This limit is the total amount available for a single occurrence, without per person or property damage sub-limits. The advantage of a combined single limit is that if there are only minor injuries but considerable property damage, the total liability limit, not just the sub-limit amount, is available to satisfy a property damage claim. Conversely, if one person is injured severely, the entire liability limit is available to satisfy a claim by that one person, rather than just the per-person limit.

When setting your limits, make sure to set them high enough to protect yourself against possible lawsuits. The more assets and income you have, or the more earning potential you have, the higher liability limits you should consider. If you become legally responsible for bodily injuries or property damage in excess of the liability limits of your policy, your personal assets or future earnings may be required to satisfy your obligation.

Types of coverage
Shopping for auto insurance involves more than simply calling an agent and asking for a quote. To get the most out of your insurance requires that you first fully understand what risk you want to protect against and how best to shift that risk using the various types of insurance coverage.

Here are some major types of insurance coverage you should be familiar with. This section is intended as a general description of the definitions typically used in a personal auto policy. For specific definitions and coverages, you should always refer to your current policy or the policy that you are considering.

Collision: The portion of the policy that pays for the damage to your car caused by a crash, regardless of responsibility. If another party is responsible for the damage to your car, the insurance carrier will pursue the other party on your behalf and collect payment for the repairs from the other party's insurance carrier or the party directly. The maximum amount of collision protection is usually limited by the depreciated value of your car (which is not the same as the replacement cost). Collision insurance is usually required by a lending institution if the vehicle is financed or leased.

Comprehensive: The portion of the policy that pays for damage to the vehicle caused by non-crash events such as theft, vandalism, acts of God, striking an animal, storms, etc.

Medical: This coverage pays the initial medical bills for you, members of your family and passengers in your car. If the cost of medical treatment exceeds the medical coverage limit, non-family passengers in your car can obtain compensation from your liability coverage, but you or your family members would not be covered by your own liability coverage. You or family members could look to other medical insurance for additional coverage. It also covers you and those in your household if you're a passenger in a car involved in a crash, or if you're a pedestrian struck by a car.

Liability: This coverage pays for bodily injury or property damage that you become legally responsible for as a result of driving your vehicle. Family members living with you who are listed with the insurance company as drivers on your policy and anyone driving your car with your permission will be covered by the liability coverage for injuries or property damage that you or they become legally responsible for while driving your vehicle. Your liability coverage will not pay for injuries to your own family members in the car, which will be covered by medical coverage described above.

Uninsured motorist: This covers your property damage and personal injury in the event you're hit by an uninsured motorist. It also covers hit-and-run crashes and is required by many states.

Underinsured motorist: This covers your property damage and personal injury caused by another party, when the amount of damage exceeds the other party's liability limits. This coverage will pick up after the other party's liability limit is exhausted.

Umbrella: If you also have homeowner's liability coverage, you may want to consider a personal liability umbrella. The umbrella will pick up bodily injury or property damage amounts that you become legally responsible for, above the policy limit of the underlying personal auto policy, up to the umbrella limit. The premium for this additional coverage is typically only a fraction of the cost of the personal auto policy and also provides additional liability coverage above the liability limits of the underlying homeowner's policy.

Gap insurance: This coverage provides for the difference between the amount paid under collision or comprehensive coverage to cover a total loss and the amount to pay off the lease or finance contract balance on the vehicle. Many lease or finance contracts include this coverage, but if yours does not you should consider including the coverage on your auto policy. If the payoff amount on the vehicle is more than the payout under your comprehensive or collision coverage and you don't have gap coverage, you will be responsible for the difference.

Other optional coverage: This can include emergency towing or repairs while on the road and rental car reimbursement when your car is being repaired.

No-fault insurance
A number of states have no-fault insurance provisions. In no-fault states, the insurance company covers a client's personal injury claims regardless of who was at fault in the crash. However, victims can still sue the other party under certain conditions.

No-fault programs are intended to reduce the costs of auto insurance by reducing claims and litigation.

High-risk insurers
Not everyone has a squeaky clean driving record. A history of too many tickets, crashes, or insurance claims can make it difficult to obtain coverage. In some cases, major carriers may actually refuse coverage, having determined that such drivers represent too great an insurance risk.

However, this does not mean coverage is not available. On the contrary, most states require personal liability coverage, so high-risk drivers are actually guaranteed coverage. Even if a larger carrier may refuse them coverage, select high-risk insurers must accept them.

When obtaining your insurance through a non-standard insurer, look into factors such as customer service, time to process claims and payment of claims. Just because you're a high-risk client doesn't mean you should accept poor service.

Money 101: Auto Insurance

The Top Things to Know:

1. You're a statistic.

To an insurer, you're not a person, you're a set of risks. An insurer bases its premium (or its decision to insure you at all) on your "risk factors," including some things that may seem unrelated to driving a car, including your occupation, who you are, and how you live.

2. Insurers differ.

As with anything else you buy, what seems to be the same product can have different prices, depending on the company. You can save money by comparison shopping.

3. Don't just look at price.

A low price is no bargain if an insurer takes forever to service your claim. Research the insurer's record for claims service, as well as its financial stability.

4. Go beyond the basics.

Most states require only a minimum of auto-insurance liability coverage, but you should look for more coverage than that.

5. Demand discounts.

Insurers provide discounts to reward behavior that reduces risk. However, Americans waste some $300 billion a year because they forget to ask for them!

6. Ask for the real thing.

Insurers cut costs by paying only for car parts made by companies other than the car's manufacturer. These parts can be inferior. Demand parts by the original equipment manufacturers (OEMs).

7. At claims time, your insurer isn't necessarily your friend.

Your idea of fair compensation may not match your insurer's. Your insurer's job is to restore you financially. Your job is to prove your losses so you get what you need.

8. Prepare before you have to file a claim.

Keep your policy updated, and re-read it before you file a claim so there are no surprises.


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