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Insurance Ed

insurance - noun

1. a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damages, illness, or death in return for a payment of a premium.

2. a thing providing protection against a possible eventuality..

Auto Insurance Basics:
1.Liability
In California, the DMV(Department of Motor Vehicles) requires all vehicles operated and parked on roadways to have Financial Responsibility (auto insurance). The DMV requires a minimum of Liability Insurance, which compensates a person other than the policy holder for personal injury or property. Here are the limits:
   *$15,000 for injury/death to one person
   *$30,000 total for injury/death to all passengers
   *$5,000 for damage to property.
These limits are low, and you might ask, what if I damage someone else's property and is costs more than $5,000 to repair? What happens to me? If not properly insured, you might be paying the difference out of your pocket. This is why its important to talk to your insurance agent to best inform you on the coverage recommended to you. 
2. Uninsured and/or Underinsured Motorist Coverage
This coverage is optional in California. If you're hit by a driver who doesn't have insurance, uninsured motorist coverage may help pay for your medical bills or  repairs to your vehicle. Usually this will cover the same injury limits in your policy and a coverage of up to $3,500 for your property. If you're hit by an underinsured driver, that means they have car insurance but their liability limits aren't enough to cover your resulting medical bills. That's where underinsured motorist coverage may help.
 
3. Medical Payments
This coverage is optional in California. If you, your passengers or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, tests and more. The coverage amount is per passenger and the coverage limits start as low as $500 per passenger, but can go as high as $10,000 or in some cases $25,000.
4. Comprehensive
This is optional in California, but may be required by your financial institution if you are financing or leasing a vehicle. Comprehensive may help cover damage to your car from things like theft, fire, hail or vandalism. If your car is damaged by a covered peril, comprehensive coverage may help pay to repair or replace your vehicle; up to the vehicle's actual cash value. This coverage has a deductible, which is the amount you'll pay out of pocket before your insurer reimburses you for a covered claim. The higher the deductible can lower your monthly premium (insurance cost), but it also means you will pay more out of your pocket.
 
5. Collision
This option is optional in California, but may be required by your financial institution if you are financing or leasing a vehicle. If you're involved in an accident with another vehicle and you are at-fault, or if you hit an object such as a fence, collision coverage may help pay to repair or replace your car; up to its actual cash value. This coverage also has a deductible, which is the amount you'll pay out of pocket before your insurer reimburses you for a covered claim. The higher the deductible can lower your monthly premium (insurance cost), but it also means you will pay more out of your pocket.
6. Other Types of Coverage
The first five coverages are offered by all or most insurers in California. But there are other types of coverage that might be offered by some insurers and are optional and could sometimes benefit you. 
   *Glass Coverage-if offered by insurer, for an additional cost, will cover the repair or replacement of your windshield/window.
   *Car Rental-if offered by insurer covers you with a car rental while your vehicle is being repaired at auto body shop due to an insurance claim. Coverage limits start as low as $20 per day rental for maximum of 30 days equaling and higher.
   *Towing/Roadside Service-when covered by insurer can cover you at a maximum limit per your policy plan or sometimes a per occurrence limit of $50-$100 no more than 3-5 times per policy term. This will vary per insurer. These plans can be as simple as just towing at a 15-mile radius, but also cover jump start, opening a locked car, change a flat tire, and even delivery of fluids(gas, oil, anti-freeze).
   *Business use-for an additional cost, there is limited types of uses that will be covered and only private owned vehicles will be included, not Box Trucks or Passenger Vans, etc. This coverage if offered by insurer will vary, make sure to ask you agent if your vehicle is covered for the type of use. If in doubt, you probably will need a Commercial Auto insurance policy. 
   *Rideshare- is rarely offered by personal insurers because of its high risk. If you plan to do Rideshare like Uber, Lyft, or others, make sure you ask your agent if the policy you are buying includes this type of business use. Most insurers automatically exclude Rideshare, so it's important to know if you will be covered.
Motorcycle Insurance Basics
Just like auto the top five coverage options are the same, but can have other types of coverage that accessory coverage, bike towing coverage, personal property, and personal equipment coverage. Liability insurance can be as LOW as $100 per year. Give us a call or send us a message on our Contact Us page if you have specific questions.
 
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