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California car insurance companies offer discounts that reduce the cost of car insurances. Discounts are offered to those with clean driving record. Read this article to learn more about California car insurance requirements, rates and programs.
Car Insurance Requirements
California law requires you to purchase liability insurance to cover costs related to property damage or injuries resulting from an accident that you are at fault. The following are minimum limits of liability insurance that you must include in your policy:
- $15,000 for injury/death to one person
- $30,000 for injury/death to more than one person
- $5,000 for damage to property.
Other Forms of Financial Responsibility
Purchasing car insurance is the most preferred way of fulfilling your financial responsibility. However, there are other options that you can use. These include:
- A $35,000 cash deposit with the California DMV
- A Certificate of Self-Insurance issued by DMV
- A surety bond of $35,000 from California licensed company.
Proof of Insurance
You must show proof of insurance in order to register your car or renew your car registration. You can use an insurance card which is issued by your car insurance company when you purchase a policy from them. This card will have:
- Your car’s information such as make, model, year, safety rating and value
- Your name and that of other drivers covered under your policy
- Your policy’s expiration date.
Additionally, California car insurance company is required to submit your car insurance information to the DMV electronically. The CDMV can use this record to verify the status of your car insurance policy.
Getting Pulled Over in California
If you are pulled over by police officers in California, you must show them your proof of insurance, along with your car registration and driver’s license.
Violation Fines and Penalties
If you are caught driving without a proof of financial responsibility, you will face the following penalties and fines:
- $100 to $200 for your first offense
- $200 to $500 for each subsequent offense within 3 years after your first
- Vehicle impoundment.
Not purchasing car insurance in this state can also result to car registration suspension if:
- The DMV in California is notified of your insurance suspension or cancellation and you have failed to replace it within 45 days
- Your car insurance information is not submitted to the California DMV within 30 days of its registration or transfer of ownership
- You registered your car with false proof of insurance.
The DMV will notify you in writing if your car’s registration is suspended for failure to purchase required car insurance. You will be required to pay a fine of $14 if you want to re-register your car again. You can apply for car registration reinstatement:
- Online at the DMV's website
- By phone at (800) 777-0133
- By mail with your notification letter to: DMV PO Box 997405 Sacramento, CA 95899
- By mail without a notification letter to: DMV – VRFRP Unit PO Box 997408 N305 Sacramento, CA 95899-7408
California’s Proposition 103
Before 1988, there were no state-governed insurance laws in California. As a result, car insurance companies continued to hike insurance rates making it hard for people to afford insurance cover. In November 1988, the Prop 103 law was enacted, which advocated and championed for consumer-driven regulation on car insurance providers. Under this law, insurance providers were required to reduce their insurance rates to 20% less than what they were asking. California Department of Insurance was then mandated in the regulation of insurance rates.
Good Driver Discount Policy
Prop 103 law requires California car insurance providers to offer a 20% discount to drivers with a good driving history. You qualify for this discount if:
- You have a valid driver’s license for the past 3 years
- During the past 3 years you have not: Received more than 1 point on your driving record as a result of traffic violations Taken to traffic school more than once for violating traffic regulations Been found at fault in an accident that caused death or injuries.
Determining Your Insurance Premium
According to Prop 103 insurance law, it is illegal for car insurance companies to use your credit history as factor in calculating your car insurance rates. They only allow other factors such as:
- Your driving record
- Your age
- Where you live
- The make/model of your car
- The purpose of your car.
California’s Low Cost Auto Insurance Program
The Low Cost Automobile Insurance Program (CLCA) is a California program which was established to enable drivers with low income to access car insurance. This program was started in 1999. To be eligible for insurance through this program, your total household income level cannot be higher than the following:
- $28,275 for a 1-person household
- $38,775 for a 2-person household
- $48,825 for a 3-person household
- $58,875 for a 4-person household
- $68,925 for a 5-person household
- $78,975 for a 6-person household
- $89,025 for a 7-person household
- $99,075 for an 8-person household
The rates of the Low Cost Automobile Insurance Program insurance premium vary by county.
California’s Automobile Claims Mediation Program
If you have a dispute with your car insurance provider, you can get it solved through the California’s Auto Claims Mediation Program. Through this program, your dispute can be resolved at no cost to you. They offer mediation if your dispute involves:
- The extent or amounts of damages
- Methods of repair
- Cause of damage
- Prior damage vs. recent damage
- Total loss
- Value of a total loss.
Your dispute will not be eligible for arbitration if it involves:
- Coverage issues
- Legal interpretations of your policy
- Contractual limitations on claim filing periods
- Agent or broker actions.
For more information about the program’s dispute arbitration process, visit the California’s Department of Insurance website.
Automobile Assigned Risk Plan
In California, you are guaranteed car insurance regardless of your driving record. However, car insurance providers have the right to deny you insurance coverage. If you are having a difficult time finding a car insurance provider to insure your car, you can apply for coverage through California Automobile Assigned Risk Plan (CAARP). These associations share the risk associated with damages and injuries caused by high risk drivers. Car insurance through this plan is more expensive than that offered by open market insurance companies. Through this plan, you will be assigned a car insurance company to insure your car with the required car insurance. An insurance car insurance company assigned to you through this plan must offer coverage for a minimum of 3 years.
Electronic Insurance Cards
Vehicle Code of California states that if you do not have your car insurance ID card, you can store your car insurance information on your Smartphone. Most car insurance companies in California have Smartphone apps that you can use to show proof of insurance when you are required to do so.
Car Theft in California
California reports higher number of car theft cases than other states in America. According to California Highway patrol report released in 2011, a total of 156,796 vehicles were reported stolen. Most car insurance companies in California use car theft rates when calculating the cost of your car insurance rates. The higher the car theft rates in your county, the higher the premiums.
Most Stolen Cars in California
If you are driving a car that is always targeted by thieves, you are likely to pay higher insurance rates. This is the 2013 list of the most stolen cars in California according to www.nicb.org:
- Honda Civic and Honda Accord
- Chevrolet Pickup (Full Size)
- Toyota Camry
- Acura Integra
- Ford Pickup (Full Size)
- Toyota Corolla
- Nissan Sentra
- Nissan Altima
- Toyota Pickup.
When involved in an accident:
- Try your best to pull out of traffic and onto the side of the road in a safe spot
- Never flee the scene
- Check whether you or any of your passenger was injured
- Report the accident immediately if there was property damage, death or injuries.