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Auto Insurance
Auto Insurance is mandatory in the State of California. However, the required minimum limits are extremely low and only apply to the Liability coverage. Minimum Liability limits do not provide enough insurance to properly protect you.
- What about the coverages that are not required?
- How do you know how much coverage and which coverages you need?
- How did you select the coverage you have now?
- When was your coverage last reviewed to be sure it is still appropriate?
Answering these questions and understanding how coverages apply when there is a claim is important to making good insurance choices. Our goal is to help you make smart choices and better understand what coverage you have. Give us a call or send us your documents for a complimentary coverage evaluation.
3 Common Mistakes People Make:
- Insuring with low Liability coverage – Liability is the coverage that pays for losses that you cause to someone else. These losses can be injuries you caused to others resulting from an at-fault accident, and/or damage to another person’s vehicle(s) or other property. Injuries can be severe and the related costs substantial. Your responsibility may include paying medical bills for the injured, plus potential lost wages, plus compensation for pain and suffering. In California, if you do not have enough insurance to pay the loss, an injured third party can secure a judgment against you and come after your personal assets and income until the judgment is satisfied. Increasing your liability coverage is not a significant expense. We also have a model to help you determine how much liability coverage you may need.
- Insuring with reduced Uninsured/Underinsured Motorist coverage – This coverage protects you and your passengers if the at-fault person in an accident injures you (or your passengers) and does not have insurance (or enough insurance) to cover your injury claim and associated expenses. While you may have Medical Insurance, that will not cover lost income, support you may need around the house, potential disability, or compensation for pain and suffering. Although the person who caused the accident may have insurance, it may not be enough to cover the loss if you and/or a passenger are injured. Your Uninsured/Underinsured Motorist (UIM) pays the difference between your UIM limit and the Liability limit of the person that injured you. Therefore, accepting reduced limits will impact your ability to collect on such a claim. For example, if you have $100,000 UIM coverage and are injured by someone who carries $25,000 Liability coverage, your UIM can pay up to another $75,000 ($100,000 – $25,000) for injuries caused by the other person. This is protection for you and your family from people who may not choose to insure themselves properly.
- Assuming you have “Full” coverage – The words “Full Coverage” can be misleading. For many agents/brokers, this means you have Liability, Comprehensive, and Collision coverage (coverage for damages to your car). However, you may still be missing Medical, Rental Car Reimbursement, Gap Coverage, Original Equipment Manufactured Parts, Road Service and Towing, and other optional coverages. We recommend you review your coverages to see if any of these optional coverages make sense for you. If you prefer, forward us a copy of your current policy and we will review this with you.
Buying Auto Insurance FAQ’s
You’re in good company
How much coverage do I need?
This is a good question. The level of Liability coverage you select should be related to the assets and income you want to protect. The higher level of income and assets you have, the higher Liability limits you should consider. You may also need an Umbrella policy to ensure there is enough coverage. Our model will give you a rough estimate if you have sufficient coverage.
Should I insure my car for Comprehensive and Collision once it is paid off?
As your car gets older or it is paid off, you may consider dropping Comprehensive and Collision to save some money. These are the coverages that pay for damage to your car. Before you drop these coverages, you need to ask yourself if you have the financial means to buy another car if your car is totaled in an accident. If you do have the financial means, it makes sense to determine your “breakeven” point, essentially how many years of premium would you need to pay before it adds up to the value of your car. This is easily determined and shown in the example below.
For example: if the car is worth $3,000, you have a $500 deductible, and the Comprehensive and Collision premiums total $450 annually, the calculation looks like: $3,000 (value) – $500 (deductible) divided by $450 (premium). In this example, your breakeven would be 5.5 years. Depending on your financial situation, if the breakeven is less than 3-4 years, it may make sense to drop this coverage. If the breakeven is longer than 4-5 years, it may make more sense to keep the coverage. We can help you evaluate this.
My car is getting older, yet my rate keeps going up. Why is that?
Cars are getting more technical and have more computerized and electronic features, thereby making them more complicated to work on. As an example, consider the claim if you accidentally damaged your sideview mirror in a parking lot. Years ago, it might have been a $300 to $400 claim for a body shop to order a new mirror and attach it to your car. Today, with the built-in sensors and alarms in a side view mirror, that same claim may be closer to $2,000.
While your car may be aging, auto and body repair shops have had to invest in new diagnostic and repair equipment and in training for their people to work on the newer cars. That investment leads to higher repair costs which are passed to the insurance companies as they repair their clients’ cars. Additionally, your auto insurance policy is also a medical insurance policy to pay for the injuries you may cause to someone else. As we have seen our regular medical/health insurance costs increase, these same pressures are also driving the auto insurance rates higher. Given the higher costs the insurance companies pay, they raise their rates (with the Department of Insurance approval).
Do I need to buy the insurance when I rent a car?
This is one of our most common questions. Most preferred insurance companies cover you when you rent a car. Essentially, they provide you with the coverage you have on your personal auto policy and extend that to the rental car. Therefore, if you don’t have certain coverages on your personal auto policy, you will not have them for the rental. Some insurance companies also limit the coverage to certain situations.
For example, if you are renting a car on vacation or on a business trip, that may not be covered; if you rent a car while your car is in the shop after a covered loss, that would be covered. Additionally, most insurance companies do not provide coverage for the rental company’s lost income while the rental car is being repaired after a covered loss. Finally, your personal auto policy is limited to a limited coverage area. Therefore, if you rent a car outside of the United States, you need to check with your company to see if there would be coverage.
Our Clients Say It Best
The best. We’ve been with Jon Gardner and JSG for 17 years and they ALWAYS do us right. Always the best advice that has proven time and time again to insure us properly. They are very attentive with frequent follow ups to make sure we’re taken care of in any situation. As a side note, our auto insurance through JSG is with Mercury. They have always covered us and have great customer service. Both are highly recommended. — Joe T.
Have a question?
Feel Free to Ask
If you have other questions, ask us here and provide your e-mail address. We will answer your question within 2 business days. We promise that we won’t spam your e-mail address or sell it to a third party.
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Have a question?
Feel Free to Ask
If you have other questions, ask us here and provide your e-mail address. We will answer your question within 2 business days. We promise that we won’t spam your e-mail address or sell it to a third party.
"*" indicates required fields
Would you like to get a
second opinion?
Beyond questions, it may be valuable to have a second opinion about your policy. We’ll provide a free review if you provide us with a copy of your Declaration pages (the pages that show the vehicles, coverages, and premiums). Our review includes a short bullet point analysis of potential coverage issues and recommendations.