You need the cheapest auto insurance in California, right? Of course, but you also want to make sure you understand what that cheap full coverage car insurance rates is giving you.
So, let’s begin. What is physical damage protection? Great question because many drivers need it. If you are leasing your vehicle you will need physical damage protection.
This also applies if you are financing your vehicle. What this means is that your vehicle has a financial interest to another party.
This coverage protects your vehicle from a covered loss.
Finance Car Insurance
Most people finance a vehicle thinking they own the vehicle. This would be incorrect.
You need to make all your payments to the loss payee. Pay off the balance owed and get your pink slip.
Your new registration from the Department of Motor Vehicle will not show any loss payee. This means you own the vehicle.
Auto Insurance Comprehensive Coverage
Having said that, you can always still buy the physical damage for your full coverage auto insurance coverage anytime. You just add this coverage to your policy. This policy change is an endorsement. You will need to do this in writing.
Your written request to make a change on your policy will be a request to complete. This is to safeguard your policy. Protect you against someone posing as you.
Believe it or not, this has happened and why writing requests are mandatory. It depends on the type of change, but for the most part, it has to be a written request.
Two Policy Sections
Physical damage has two sections to the policy:
- The first is collision. This coverage refers to the direct or accidental damage. The damage would be to your vehicle.
- This could result from flipping over or having an impact with another vehicle. This coverage accounts for about 30 percent of annual cost to a auto insurance policy. Comprehensive the other section of coverage is only 15 percent.
You can see the difference in percentage. The collision protection is more expensive than liability. Most people know this different.
This is why people raise the deductible higher on the collision.
Full Coverage Conversation
A common misconception among many people shopping for low cost insurance is the “full coverage” theory.
It means, do not think because an agent says you have full coverage, you in reality, have full coverage.
Full coverage in reality not theory, means you have the whole salami sandwich and not just the corner bite.
You would have the following optional coverage plans.
- Medical coverage,
- uninsured motorist protection
- road side service,
These are the most common known extras that you can purchase on your automobile policy. It’s like going to a ice cream shop and asking for just a cup of ice cream. That’s it, just the base. Nothing more, no hot fudge or nuts.
Any additional features or toppings, if we are still using the ice cream example would cost extra.
If you wanted to add uninsured motorist protection, roadside and so forth, you are looking at a monthly increase. It can range from a few dollars to double digits per month.
Rating and Territory Factors
This all depends on the demographics that are used for carriers to rate their premium on.
But on average, the liability portion of insurance is always less expensive then the physical damage protection.
For example, Collision coverage is the most costly slice of piece of the insurance pie.
Review Policy Information
It is always a good idea to review all your policy coverage information. No matter how long an agent has been experienced in the field, human error still happens.
Even technical errors can occur with policy and procedure. So, typos or misspellings can be of issue.
Even though you may find no errors, the benefit of you understanding what coverage you actually have is paramount.
This is the basic to any process, understanding how it works. If you understand how your coverage works, you will know exactly what you need.
This way you will not be oversold on a product based on an agent’s commission structure.
Up Sell of Auto Insurance
We have all heard of the up sell side of sales.
Unfortunately, this practice works in the insurance industry as well. Meaning, the premium an agent writes off one policy, the more commission they receive.
Sometimes, this pay structure can influence the decision making of a sale, and not always in the customer’s best interest.
- No matter how large the company is, the end game is the same.
- Make sure you are not being sold coverage that you will never use or need.
- What works for one person does not necessary mean it will work for you.
- You are unique with different lifestyle ways.
This is why you want to make sure you are fully protected, not just with words, but backed in writing with an understanding of what your getting.
This is a smart move if you are on a tight budget but still need the coverage.
If you are curious, ask for a rate with 1 thousand deductibles and not the standard 500 hundred dollar one.
You can save a lot of money off your policy premium.
- Carriers treat an accident with an animal as a non collision loss.
- The company or provider has done the insured a favor in this example. You understand the cost factor between the two.
Carriers understand that you can have greater opportunities to avoid contact with cars. This includes objects with free moving creatures that can react to elements. These elements can be lights, motion and sound.
The second loss category for damage to your vehicle is other than collision. Back in the days it was also referred to comprehensive coverage. It is a broad category that includes many types of loss. It is still considered a property loss.
In fact, most types of automobile claims fall under this coverage.
For illustration purposes, let’s say your car gets stolen and is not recovered.
Your OTC coverage will pay for the actual cash value of the car, less your deductible.
This is how the coverage works during a loss. Understand your deductible amounts.
- Check with your lender to see the highest deductible amount.
- If they accept the 1 thousand versus the 500, you can see an average of 25-40 dollar a month difference.
This is just a range to provide overview. There are many other rating components to your policy than just this.
The actual cash value is an important term that you will find on your policy.
It means in short, that the amount paid for a thing minus the depreciation.
This depreciation that has occurred during the term of vehicle ownership.
In the case of vehicles, it is often used in marriage with blue book.
Whatever the term, this is a conservative approach to value an asset. Remember, this does not mean it will replace the asset.
Theft and your Coverage
Theft happens and your car is now found. If your vehicle is not totaled than your carrier or provider will pay for the damages. The damages done to the car during the theft incident has coverage.
Other than collision will not pay for certain things.
- cell phones
- tapes and CDs
Of course the list could go on forever. You get the idea.
Transportation expense are apart of the physical damage coverage. If you are in an accident, then this coverage would kick in.
This coverage will reimburse you for any expenses you had to pay due your auto not operating. This would be a result of a covered comprehensive or collision loss.
Based on the 1998 Personal Auto Policy, the limit of coverage is 20 dollar. The maximum amount would be six hundred dollars.
Time of Protection
For theft loss, your coverage will take effect 48 hours after having your car stolen.
This has to be a covered loss and coverage will begin 24 hours after the withdraw of your vehicle.
As you can see there are many areas of protection to learn.
It is important to understand how your property coverage works. You may be getting too much coverage or not enough.
Full Coverage Auto Insurance Principles CA
You would never know unless you learn the common car insurance principals.
You might have received letters from your finance company requesting evidence of coverage.
Common procedure but to you it may be overwhelming.
We get that. The loss payee process is a simple channel to complete.
- All you need to do is provide your carrier with your lien-holders information. They will handle everything else for you.
- Ask for a copy of the complete transaction from your agent or broker.
- It’s always a good idea to get confirmation of all your requests. Make sure you get these requests done in writing.
If you should need further help, don’t hesitate to contact us. We can walk you through the process of finding low cost insurance for so many products and programs.
Programs for full coverage car insurance, commercial insurance and other coverage options.
Don’t see something you need, just call us at 800-962-0085. We can help answer any questions you may have.
Service Areas: Ontario CA, Riverside, Rancho Cucamonga, Pomona, Fontana, Rialto and Anaheim Hills.
Need Full Coverage Auto Insurance in Ontario CA
- Terry Washington
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