Purchasing California car insurance can be confusing. There are many unusual terms used in insurance documents that are unfamiliar to the average person, and an insurance policy can be long and difficult to read and understand. Insurance agents know better than anyone else what is contained in California car insurance policies. We’ve compiled the most common questions insurance agents hear from consumers when they shop for car insurance:
What Does the Word Deductible Mean?
A deductible is the portion of the claim that you pay yourself before your California car insurance policy begins paying for losses, injuries, or damages. For instance, if you’re involved in a car accident with $10,000 worth of damages, and you have a $500 deductible, you would pay the first $500 of the claim and the insurance company would pay the remaining $9500. This is why California car insurance policies with higher deductibles have lower premiums. If you have an accident that involves $500 or less, you would pay the entire amount out of pocket.
What Does Collision Coverage Do?
If you are in an accident and your car is damaged, and you are at fault, collision insurance will cover the cost of your repairs, minus your deductible. If another driver is at fault, you may be able to recover the cost of your damage from their insurance.
What Is Comprehensive Insurance?
Comprehensive is basically coverage for damage that happens in any way other than a collision. Good examples are damage from fire, theft, or vandalism. Damage to the glass in your car also comes under comprehensive coverage.
What Is Liability Insurance?
Liability insurance is the coverage you purchase in case you cause damage to other people’s property or injuries to other people. You are not covered for damage to your own car or for your own injuries. When you are quoted a policy for the bare minimum California car insurance, it’s usually for liability insurance alone. Many other states also require liability insurance in order to drive on their roads.
How Does My Driving Record Affect My Premiums?
Insurance companies try to set their prices by predicting the chances of an accident occurring in the future. In order to set prices more fairly, they charge higher premiums for people who are more likely to make claims. They use your prior driving record as a guide to setting your policy premiums. They also count speeding tickets and other moving violations against you when setting your premiums.