One important step in finding affordable auto insurance in California is to learn the minimum coverage requirements for your state. For auto insurance in California, liability coverage is necessary to satisfy financial responsibility for damage or injury in the event of a car accident, no matter which party is at fault. The following coverage amounts are required:
–$15,000 for injury or death to one individual
–$30,000 for injury or death to multiple individuals
–$5,000 for property damage
You may want to carry more than the minimum amount of coverage, since damage amounts may exceed the minimum coverage. In an at-fault accident, you may be liable or even be sued for amounts that exceed your coverage. You may also want to have collision and comprehensive coverage, which will cover the amount of your vehicle damage or loss, after the deductible amount.
If you are financing your vehicle, you are usually required by the lender to carry collision and comprehensive coverage so that the lien holder is covered for any loss.
Should You Get Gap Insurance?
Gap insurance covers the difference between what the vehicle is currently worth and the amount owed on the loan. If the car is totaled, meaning that the damage is more than it’s worth, gap insurance will pay off the loan, subject to limits and exclusions. For example, if you rollover a prior loan into your new loan, Gap would not cover that amount. Although it will be an extra cost, some choose to get gap insurance even when it isn’t required so that they don’t end up owing thousands of dollars if their vehicle is totaled.
What About Auto Insurance for an Older Car?
For older cars that are not financed, you are not required to carry collision, comprehensive or gap insurance. Your premium will be dramatically reduced if you choose to carry only liability coverage. Many older cars aren’t worth much more than the amount of the insurance deductible, so it’s not worth it to carry full coverage. If your car is paid off but is worth significantly more than your deductible or the amount of savings you have to replace it with, you may still want to keep full coverage.
If you do keep full coverage, you can raise your deductible to keep the premiums lower. Just be sure you have enough money in your savings to cover the deductible if your vehicle would be involved in an accident.
AIS Auto Insurance Specialists can help you find the best insurance rates and decide how to structure your coverage for the best possible balance between low rates and coverage that gives you peace of mind. Get an auto insurance quote today.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.