Types of Insurance Coverage
According to California law, the owner of a car must maintain insurance coverage. The minimum insurance coverage required by law is called "liability." Liability coverage pays, up to certain limits, the sum for which you become legally responsible if you injure someone or damage their car. The following other types of coverage are optional:
- Uninsured motorist:
Protects you and your passengers if you are injured by an uninsured or hit-and-run driver, but only if the other driver is legally liable because of negligent driving. (Note that some insurance companies automatically include this coverage in their policies)
Pays for your losses if your car is damaged in a collision or single car accident. This coverage is valuable if the collision cannot be proven to be someone else's fault.
Pays for your loss if your car is stolen or damaged by fire, hail, hurricane, vandalism, or most other non-collision causes.
Agents, Brokers and Insurance Companies
Auto insurance in the Bay Area is often expensive. Some companies offer the possibility of a "good student" discount with their policies for students with a "B" grade average or better. An insurance agent works exclusively for one insurance company. A broker or independent insurance agent works with many different insurance companies and policies, and can compare different rates for you. Before you purchase insurance, make sure the agent/broker and insurer you select are licensed by the California Department of Insurance (1-800-927-4357). There is information about auto insurance companies and insurance terminology that is very helpful at the State of California's Department of Insurance.
If You Have an Accident
The California Driver Handbook has information about what to do in the case of an accident. Be familiar with the procedures and keep this information in your car along with the car's registration and insurance paperwork. For a hardcopy of this handbook, please visit a local DMV or download a copy to your computer for future reference. Failure to follow correct procedures after an accident may result in fines or legal action. An insurance claim occurs when there is an accident and charges are made against the insurance policy. A claims adjuster from the insurance company reviews the facts of the accident and authorizes payment of a claim against an insurance policy; they should notify you what the insurance company will cover and what part of the bill (if any) you may be responsible to cover.