What You Should Know About California Auto Insurance Companies
To protect consumers, the California Department of Insurance (CDI) was created to regulate the billion dollar insurance industry. This regulating agency is responsible of reviewing all types of insurance policies including auto, health, home, life, long-term care, and worker's compensation. Licenses are issued to California auto insurance companies that have complied with the requirements set by the CDI. The licensing process was made mandatory to ensure that all California auto insurance companies have the financial capacity to pay their obligations to its clients. The same is also instituted to ensure that all insurance companies are familiar with California insurance laws. Aside from auto insurance policies, CDI also monitors insurance policies for health, home, life, and long-term insurance. There are three major reasons why California drivers and vehicle owners purchase policies from licensed California auto insurance companies. The first is for protection against financial risks brought about by injuries or property damage from auto accidents, theft, vandalism and natural disasters. The second reason is that California state law mandates that all drivers and vehicle owners should have at least a minimum amount of liability coverage. The Compulsory Financial Responsibility Law of California requires that these people should be financially responsible for all their driving actions. Lastly, auto insurance policies from licensed California auto insurance companies are required by lending companies from those who still have outstanding car loans.
There are two types of liability coverage should be purchased according to California law. These are bodily injury liability and property damage liability. The former aims to protect the assets of a policy holder if he is liable for an auto accident where a person may have been injured or killed. Property damage liability, on the other hand, covers cost for repairing and replacing vehicles or property of other people which might have been damaged due to an auto accident. Minimum limit of bodily injury liability is $15,000 for death or injury of a person from any accident and $30,000 for injuries of multiple persons. The minimum limit for property damage liability, on the other hand, is $5,000 for one auto accident. For consumers to be able to make an informed choice in purchasing auto insurance policies, they should conduct an extensive research and comparison of all available auto insurance policies. Aside from the premium rate of policies, consumers should also consider the history of the insurance company when handling insurance complaints and disputes. Several online websites provide helpful tips when shopping for auto insurance. They also have direct links to websites of licensed California auto insurance companies. Aside from purchasing a motor vehicle and automobile liability insurance policy from any of the licensed California auto insurance companies, there are three other ways for a vehicle owner or driver to accomplish financial responsibility. Another option is to make a cash deposit amounting to $35,000 with the Department of Motor Vehicles (DMV). A certificate of self-insurance may also issued by the DMV for those who own more than 25 vehicles. The last option is to post a surety bond for $35,000 from any of the California auto insurance companies. |