Driving in California without Auto Insurance

California state law requires drivers to be financially responsible for property damage and injuries that result from their actions while operating a motor vehicle. State laws also specify the penalties for not meeting the insurance requirements in California. However, the California Department of Insurance estimated that California had 3.5 million motorists driving without insurance in 2004. The California Low Cost Auto Insurance Program allows good drivers to obtain the minimum auto insurance required in California.

Requirements

Drivers in California must carry insurance to cover damage to other people and property, commonly known as liability insurance. California law doesn't require motorists to carry insurance for their own medical costs or to repair their own vehicle. The California Department of Motor Vehicles specifies that the state minimum in California is normally $15,000 for each person, a total of $30,000 for each accident and $5,000 for property damage. Drivers who meet the requirements for the CLCA program have lower liability requirements. The CLCA policy currently provides $10,000 worth of coverage for each person, a total of $20,000 for each accident and $3,000 coverage for property damage.

The failure to show financial responsibility is a violation of Section 16029 of the California Vehicle Code. The penalties for violating this code include fines, vehicle impoundment and a suspended driver's license for at least one year if you are involved in an accident. These penalties become more serious if an uninsured motorist is involved in an accident, and may require the uninsured driver to pay for damages and injuries that result from the accident. These penalties are in addition to any other provision of law that may result in additional penalties.

Fine

MrTicket.com reports that failure to provide evidence of financial responsibility carries a maximum fine of $796, according to VC Section 16028(A). This fine may be reduced if you show proof of insurance after the violation. The purpose of these fines is to reduce the number of drivers in California who drive without insurance. The court can also order the defendant to maintain financial responsibility over the vehicle for at least one year.

Impoundment

The court also has the discretion to order a vehicle impounded when the registered owner is unable to show proof of financial responsibility. The release of a vehicle that has been impounded under the circumstances requires the registered owner to meet several conditions. The registered owner of the vehicle must present proof of financial responsibility for the vehicle and pay all fees associated with the towing and storage of that vehicle.

Legal Ownership

California law also makes provisions for vehicle impoundment in cases where the legal owner and registered owner are different parties. This typically occurs when the registered owner is making loan payments to a financial institution, which is the legal owner of the vehicle. If the legal owner of the vehicle is a financial institution, it must be authorized to operate as such in California before the vehicle may be released from impoundment. The legal owner must present foreclosure documentation if that owner is repossessing the vehicle.

A legal owner that obtains the release of a vehicle from impoundment may require the registered owner to pay storage and towing charges relating to the impoundment. The legal owner must also make reasonable efforts to ensure that the registered owner meets the requirements of financial responsibility before releasing a vehicle back to the registered owner.

California Low Cost Automobile Insurance Program

California's Low Cost Auto Insurance provides good drivers with car insurance policies that meet the state's minimum insurance requirements. These policies provide coverage for the primary driver of a vehicle and other people who qualify as secondary drivers. Each driver may have up to two CLCA policies, where each policy applies to a different vehicle. In addition to the minimum liability coverage required by the law, CLCA also provides two types of optional coverage, including bodily injury from uninsured motorists and medical payments.

The annual premium of a CLCA policy varies by county, with the current premium being as low as $248 a year for Ventura county residents, and you can pay the premium over time with several payment plans. You can also make a $125 deposit and pay the balance within 30 days or in five installments every other month. A $100 deposit requires you to pay the balance in six installments every other month. You can also make an initial deposit of 15 percent of the annual premium and pay the balance in six installments every other month. Each installment payment requires an additional fee of $4.00.

Contact Pacific Preferred Insurance Agency at 805-351-3851 to learn more about obtaining car insurance in California.

Why You Should Consider Higher Car Insurance Liability Limits in California

If you’re in the market for automobile insurance in California, or are reevaluating your current insurance to be sure your coverage is appropriate, chances are you’ve come across quite a bit of information about liability insurance and liability limits.

While many companies and websites advertise state minimum coverage that saves you money, this may not be your best choice; let’s examine why.

What is Liability Coverage?
To begin with, it’s critical to understand what liability coverage is, and what it covers. While auto liability insurance covers various areas and comes in many forms, bodily injury and property damage coverage are two of the most important.

This means proper liability coverage is meant to cover medical expenses (including but not limited to medical bills, office visits, physical therapy and/or rehab), car repairs or even replacements, damaged buildings, other property and even lost wages and funerals.

To take it one step further, certain vehicle accidents require the services of an attorney. Liability coverage provides assistance in this area as well.

Why Consider Higher Limits for Your Policy?
According to a study by the Federal Highway Administration, the range of medical costs alone for a vehicle accident range from 2,000 to 1.3 million dollars. No one plans for an accident in advance, therefore, they can be devastating without proper coverage, or with the advertised "state minimum."

To determine what liability limit is best for your automobile insurance, it’s best to talk to a licensed insurance agent in your state while taking a look at your assets and what you have to lose. Based on the high potential costs of an accident, having the right coverage is paramount.

Interested in learning more about liability coverage in California? Call Pacific Preferred Insurance Agency today!

April is Distracted Driving Awareness Month

I was reading an article today from the Insurance Journal and was reminded that April is National Distracted Driving Awareness Month. Distracted driving is a dangerous epidemic on our roadways in California and throughout the United States. In 2011 alone, over 3,000 people were killed in distraction related crashes, which accounts for 10 percent of all car crashes, according to a recent study and articles I read during my research.

 

 An analysis of data looked at from 2010 to 2011 showed police listed the majority of drivers, about 60 percent, who were distracted due to being “lost in thought”.  This is compared to 12 percent who said they were distracted because they were using a phone to text or make a call. Interesting, however that the 30 to 39 year olds had the highest proportion of cell phone involvement. I found this most disturbing, because if we want our children to drive safely and not distracted, then we must show them how it is done.

Did you know?

Ø  Drivers who use hand-held devices are 4 times more likely to get into crashes serious enough to injure themselves.

Ø  Text messaging creates a crash risk 23 times worse than driving while not distracted.

 

 

Ø  Sending or receiving text takes a driver’s eyes from the road for an average of 4.6 seconds, the equivalent at 55 mph-of driving the length of an entire football field, blind.

It’s time for us to make a difference and recognize that distracted driving has lasting consequences – the victims who survived a crash; parents who have lost their children, children who have lost parents or siblings; wives, husbands, and friends who have lost loved ones; and law enforcement and emergency personnel who are first on the scene at these horrific crashes.

Let us remember the next time we allow an activity, whatever it might be, to take our eyes off the road, our hands off the wheel, or our mind off of driving in a safe manner it could be our last.

Join Pacific Preferred Insurance Agency as we take a pledge to educate all drivers on the dangers of distracted driving. Your pledge just might save a life and that's worth it, right?!

How much will my car insurance rates rise after adding my teenage driver?

If you plan to allow your newly licensed teenager to drive your car even occasionally, then you will need to add them to your auto insurance policy. And, yes, unfortunately your rate will go up, but just by how much is the question.  If you fail to add them to your policy then it could mean that if there’s an accident and they are driving, there is no coverage and you could be liable for out of pocket expenses and damages to the other party, as well as your own property damage.   

So, back to the big question of how much will adding the teenager to your policy affect your car insurance rates.  This question really depends upon many factors including what kind of car they will drive, whether it’s for your son or daughter (no myth here, it does cost more to add a male than a female youthful driver), whether or not he or she completed a driver’s education course and even their grades – teens with GPA’s above 3.0 may qualify for a good student discount.

According to a recent study completed by carinsurance.com, your rates will rise anywhere between approximately 90% to a whopping 250%.  They took a typical couple in their mid to late 40’s with a good driving record and two average vehicles and then added a 16 year old to the policy. Then they compared increases in 25 cities spread out across America. The average dollar increase was $1,014 every six months.  This is because your teenager is considered a high risk driver out of the gate. It’s a known fact that new teenage drivers are 3.7 times more likely to be involved in an accident and 1.8 times more likely to get a traffic ticket compared to the average insured adult. Learn more about teenage driver crash statistics in California here.

There’s not a lot you can do to minimize the impact of a new teen driver on your policy. However, the good student discount we talked about above can lower your rate by as much as 15%.  In this case, it really does pay or save to get the good grades!

A final suggestion to lower your overall cost of adding your teen to your policy would be to increase your deductibles and lower your coverage amounts, but since a teen is more likely to cause liability damage in an accident, it may not be appropriate and often should only be considered as a last resort. 

If the cost is simply too prohibitive, hold off on the driving and the driver's license until you can find a way to afford it. If a child is away at college, he generally won't have access to your car anyway. This is probably the least popular means of dealing with the car insurance conundrum.

Other than these few suggestions, there isn't much other than time and a good driving record that can help to lower this cost. Remember, many factors are involved in your policy premium, some of which may not be mentioned in this article.  It’s always recommended that you speak with a licensed insurance agent in your state. S/he should be most qualified to consulting with you regarding policy decisions.

Do you need rental car insurance?

You’ve probably been at the rental-car counter, listening to the representative ask if you want to purchase the company’s insurance. And the thoughts start racing through your head. “Is this a rip-off? Doesn’t my regular auto policy cover me? What about my credit card? Why didn’t I figure this out before I left on my trip?”

At Pacific Preferred Insurance Agency in Oxnard, California, we are here to help. And while not every situation is the same, we’ve got some general tips that will help you make an informed decision the next time you’re standing at that counter.

1. Know your personal auto policy.

Because insurance policies vary, it’s a good idea to give us a call — before you rent a car — to make sure you have the coverage you need. In many instances, your personal auto policy will provide coverage for a rental car — but that coverage may be limited to the value of the car you own, rather than the one you’re renting. Of course, if you don’t have a personal auto policy, you’ll need to purchase coverage from the rental company.

And keep in mind that in the event of an accident, many rental companies will charge fees beyond repair costs. They may assess a loss-of-use fee for each day the car is unusable, as well as charge you because the value of the car has decreased. Not all insurance policies cover these fees.

2. Also know your homeowners or renters policy.

If you’re traveling with expensive electronics or other valuable items, you probably want to consider what coverage you’ll have in the event they are stolen. Your personal auto policy and/or credit card coverage likely won’t provide protection for this scenario.

3. Check your credit card protection.

Most credit cards will also provide some coverage, but often payment is limited to reimbursement of your personal auto policy deductible (after that policy pays for repairs). Generally, loss-of-use and other fees are not covered, but it’s important to check with your credit-card provider to determine their policies. And while some cards may offer additional protection for a fee, usually coverage is limited to damage to the car, not liability for any injuries to others. Remember, to receive any sort of benefit from your card, you must use that card to pay for your entire car rental.

4. Consider any unique circumstances.

Are you renting a car in a foreign country, or for more than a week? You’ll definitely want to get confirmation of coverage from both your insurance carrier and credit card company because different rules might apply. Also, no matter where you are, vehicles such as trucks, RVs or exotic sports cars often aren’t covered under standard agreements. And if you’re using a car for business purposes, your personal coverage might not apply. Finally, if multiple people will be driving the car during your trip, make sure your coverages will apply to them.

5. Learn about the insurance offered by the rental car company.

According to the Insurance InformationInstitute, rental companies offer four main types of coverage.

A Loss Damage Waiver (LDW) relieves you of responsibility if your rental car is damaged or stolen. This may also provide coverage for loss of use.

Liability Protection provides protection from lawsuits if you are sued after an accident.

Personal Accident Insurance covers you and passengers for medical bills after an accident. You may not need this if you have adequate health and auto coverage.

Personal Effects Coverage protects you if items are stolen from your car. You generally are covered for this under your homeowners or renters policy, but keep in mind that the loss must exceed your deductible for you to receive payment. If you have a high deductible, it may make sense to purchase this coverage from the rental company.

When you go on vacation, you don’t want to stress out about insurance. So give us a call at 805-351-3851 before you leave. Then, when you head over to the rental-car counter, you can stop worrying about your coverage — and start enjoying your trip!

Home Inventory Tips & Tools

According to a 2012 survey from the National Association of Insurance Commissioners (NAIC), more than half of Americans don't have a home inventory of their possessions, putting them at risk for inadequate home insurance coverage, should a disaster strike.

Home inventories are invaluable for showing insurance companies what you lost in a break-in, fire, or other catastrophe. “The information you place in your home inventory can make insurance claim settlements faster and easier,” said Ken Goodwin, California Licensed Property & Casualty Insurance Broker and Principal Owner of Pacific Preferred Insurance Agency in Oxnard. He added, “It’s also been a great way for us to determine whether our clients may need personal property limits higher than already specified in their policy.”

Taking pictures or recording video of the contents of your home is the recommended method of taking stock of your possessions, according to Goodwin. Armed with a digital camera or camcorder it's easy to shoot as many pictures or minutes of video as you need. Always take an extra few seconds to snap a picture or zoom in on the serial numbers and the important details of your possessions—flip a piece of china over to show the make, take a close up picture of a stamp or proof mark on an antique that shows the age and value, etc. Burn the pictures or video to a DVD and/or upload them to a secure account online to ensure you have them when you need them.

Know Your Stuff® - Home Inventory, the Insurance Information Institute's free online home inventory software is a good solution. The application makes creating and updating your home inventory easy and efficient. And with their free, secure online storage you will have access to your inventory anywhere, any time.

You can also download the new Know Your Stuff® — Home Inventory app to your iPhone. It is available in the iTunes App Store (or search for "III Inventory").

Information about your belongings, including adding rooms, items and photos, can be entered either through the iPhone app or through the Web-based software and your data will automatically synchronize between the two. All of your information will be kept in your personal, password protected account, on Amazon secure servers. And, like the online version, the Know Your Stuff® app is easy to use and free of charge.

If you would like to learn more you can visit www.knowyourstuff.org or www.pacificinsuresme.com

California Low Cost Automobile Insurance Program

In 2000, the California Low Cost Automobile Insurance Program (LCA) was launched as a pilot program in San Francisco and Los Angeles counties in an effort to address the problem of uninsured motorists in the state who were good drivers and demonstrated financial need. In the late part of 2007, the program was rolled-out statewide pursuant to California Insurance Code Section 11629.7.

The California Low Cost Automobile Insurance Program is administered by the California Automobile Assigned Risk Plan (CAARP) and local licensed insurance agents, or producers, certified with CAARP, are able to write coverage through the Low Cost Program.

Pacific Preferred Insurance Agency located in Oxnard, is one of just a couple agencies certified to offer this program in Ventura and Santa Barbara counties. Ken Goodwin, licensed agent and owner of Pacific Preferred Insurance Agency said, “We are happy to be part of this program and help good drivers in California secure liability insurance protection at affordable rates”. Goodwin went on to explain, “In these tough economic times, this program provides low-income families and individuals, the ability to meet California’s mandatory auto insurance law”.

California law requires drivers carry a minimum of $15,000 per person for bodily injury liability coverage, $30,000 per accident, and $5,000 for property damage. As part of the deal to lower the price of the policy, state legislators allowed carriers to lower the standard limits to $10,000 per person, $20,000 per accident, and $3,000 for property damage.

As of 2011, it is estimated that approximately 10,500 of California’s roughly 24 million drivers had insurance through this program. Goodwin feels that there are many more people throughout Ventura County alone that could benefit greatly from this program.
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If an applicant qualifies, the current annual premium in Ventura County was $248 a year, $231 in Santa Barbara County and $347 a year in Los Angeles County.

Other requirements for drivers seeking the policy include:

•The driver must be at least 19 years old and have been driving for at least three consecutive years;
•Insurance applicants may have no more than one property-damage-only insurance claim in which they were at fault or one point for a moving violation within the last three years;
•The car being insured may not be worth more than $20,000;
•The insured may not be a college student claimed as a dependent for federal or state income tax purposes;
•The driver cannot have an in-force liability insurance policy for another vehicle.
There is also a 25 percent surcharge for unmarried males between the ages of 19 and 24, because this population segment represents the highest driving risk.

Competitive auto insurance rates in California may mean that additional coverage beyond the reduced liability limits of the LCA program are made available through the private auto insurance market. It is important to consult with your insurance carrier or agent to find the policy that works best for your individual needs.

If you would like to learn more, you can visit http://mylowcostauto.com, call CAARP at (866) 602-8861 or call Pacific Preferred Insurance Agency at 805-351-3851 and speak with Ken Goodwin, who is a certified producer/agent who can help local residents throughout Southern California.

*as of 02/15/2013 - subject to change