Q: I am in the process of purchasing a new car and getting off my parents’ insurance policy. I will need to obtain my own auto insurance, but I have no idea what type of insurance I need, nor do I know how to shop around for an agent. Can you help?
A: Shopping for the right auto insurance can be a stressful task, as auto insurance plays a very important role in protecting consumers from serious financial loss due to car accidents.
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In California, there are minimum insurance requirements you must carry. According to the California DMV, those requirements are:
▪ Bodily Injury Liability Coverage: $15,000 for injury/death to one person/ $30,000 for injury/death to more than one person
▪ Property Damage Liability Coverage: $5,000 minimum
While these are the minimum coverages that are required by law in California, they can be adjusted up to meet your exact needs.
When shopping for auto insurance, be sure to get at least three quotes, remember that the lowest price is not always the best, and look the company up on bbb.org. When comparing policies, find out if there are any fees you will have to pay upfront on top of your monthly rate, and be sure to ask any potential insurance agent these 10 questions:
▪ Under what conditions can the cost of my insurance be increased or the policy be canceled?
▪ How do I contact the company to make my claim? Will I be speaking to an agent in my area or to a central office?
▪ What is the average length of time before a claim adjustor contacts the insured once a claim is reported? How soon can one expect all parties to be paid? Do you know how your company compares with others for promptness in claims handling?
▪ What are the requirements with respect to qualified repair shops and pre-inspections? Is there a good choice of shops within a reasonable distance of my home?
▪ If pre-inspections are required, how quickly can they be done?
▪ Exactly what information does the company require when an accident occurs? May I have a copy of the company's accident form to keep on hand?
▪ Exactly what expenses are covered as part of the policy? What about expenses incurred as the result of an accident such as childcare costs, lost wages, or rental car costs?
▪ What discounts might I qualify for in the categories of lifestyle, multiple policies, car model, and safety features? May I have a list of the discounts that the company offers in my state?
▪ What are the deductibles on my policy? How would choosing higher/lower deductibles affect the cost of premiums?
▪ Does the collision coverage have a clause allowing me to reject a claim settlement I feel is unsatisfactory?
For more tips, visit bbb.org.
Action Line is written by Blair Looney, president and CEO for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems toAction Line at the BetterBusiness Bureau, 2600 W. Shaw Lane, Fresno, CA 93711 or firstname.lastname@example.org.