More about California Auto Insurance

Posted on | June 30, 2010 | Comments Off

First, what is the problem with the range of insurance policies on offer from the insurance industry? Why is it necessary for the Department of Insurance to intervene in the market? The answer is simple. California has been hit hard by the recession. Gone are the days when people were proud to live in the “Golden State”. The problem is seen most obviously in the repeated failures of the state to deal with its massive deficit. Now translate this into the millions of people living in the state who cannot find work paying enough money to live on. Their poverty means it is impossible to pay for insurance and eat. Not surprisingly, millions of drivers are on the roads without insurance. In 2008, the Department of Insurance estimated about 18% of Californian drivers were uninsured. Since then, the unemployment rate has doubled.

Why is this a problem? Well, although many drivers buy uninsured or underinsured cover, you have to be able to identify the other driver in the accident. If you cannot, say because it’s a hit-and-run, you cannot show the other driver was uninsured and so cannot claim on the policy. Since most uninsured drivers prefer not to wait around to admit their criminal offense (that costs them a fine and may result in their vehicle being impounded), all that can, drive away from the scene of the accident as quickly as possible. That is bad luck for you and great news for the insurers who take your premium and rarely have to pay out.

The Department of Insurance believed there were a hard core of the poor who felt guilty about driving without California car insurance so, in 2007, it persuaded the private insurance industry to offer a low-cost liability program for about $400 per year. This is not subsidised by the taxpayers. To qualify, you have to go through a means test, i.e. you must:

* be at least 19 years old;
* have held a valid driving licence for at least three years;
* have no recent claims involving injury or death;
* own a vehicle worth less than $20,000; and
* earn less than $55,125 for a family of four or $27,075 as a single person.

The premium buys you auto insurance for personal injuries up to $10,000, with $20,000 total injury claims from any one accident, and $3,000 for property damage. This is really basic coverage, but it’s a lot cheaper than the fine for not carrying insurance and avoids your vehicle being impounded. So look at the conditions. If you qualify, look at the renewal notice from your current insurer and check out what the online insurers are offering. Now decide whether you are prepared to accept this cheap auto insurance to stay legal on the road. There is a clear explanation of the program on the Department of Insurance’s website at California Low Cost Automobile Insurance Program. This may be the time when some car insurance is better than no car insurance.

Comments

Sponsor

Categories

• Diet & Fitness
• economy
• healty
• marketing
• Other – Health
• Uncategorized

Sponsor

wangachmad

Powered by MyBlogLog

Archives

• September 2010
• August 2010
• July 2010
• June 2010
• May 2010
• April 2010
• March 2010
• February 2010
• January 2010
• December 2009
• November 2009
• September 2009
• August 2009
• June 2009
• May 2009
• February 2009
• January 2009
• October 2008
• August 2008
• July 2008
• June 2008
• April 2008
• March 2008
• February 2008
• January 2008
• December 2007