Choosing a qualified, professional insurance agent can be as
important as choosing your doctor, your accountant, or any
other professional upon which you rely. If you are selecting
an agent or broker for the first time, your best resources are
your relatives, neighbors, co-workers, as well as professional
broker-agent associations.
When selecting a broker-agent, you may wish to verify the
producer’s licensing status with the California Department of
Insurance (CDI). You can check a producer’s license on the
CDI’s Web site www.insurance.ca.gov, or you can reach our
Department at the contact information given under the
“Talk to Us” section at the end of this brochure.
CDI’s Producer Licensing Bureau is responsible for issuing
insurance licenses and administrating continuing education
requirements for producers. As of January 1, 1997, all
agents are required to include their license number on
business cards, premium quotations, and printed
advertisements. This will enable you to check the status
of their license with our Department.

Insurance companies must offer the following coverage
with every automobile policy:
• Uninsured / Underinsured Motorist
Provides liability insurance when the party at fault does not
have the state required minimum liability coverage,
or the minimum liability coverage is insufficient to cover
the injuries sustained in the accident. Likewise, uninsured
motorist property damage covers possible reimbursement
for damages your car sustains (BI and PD).
Most insurance companies will also offer the following
optional coverages:
• Medical Payments
Provides for the payment of medical and similar expenses
without regard for liability.
• Physical Damage (collision and comprehensive):
Neither of these cover mechanical breakdown or normal
wear and tear. Collision covers damage to your vehicle
caused by collision with another vehicle or with any other
object, regardless of fault. Collision insurance covers
vehicle upset (overturn), but does not cover bodily injury or
property damage liability. Comprehensive coverage covers
damage to your car caused by reason other than collision,
such as fire, theft, windstorm, flood, vandalism, etc.
• Endorsements/Riders
Special equipment (i.e. after-market additions such as
premium stereos, tires, and other misc. equipment),
towing, and rental reimbursement.

 

When I Apply for Insurance, What Kind of
Information is Obtained?
Your insurance company or agent will require that you disclose
certain personal information on the application to determine
your eligibility for insurance coverage and establish the price
of coverage. If you are applying for automobile insurance,
the company will collect information such as your driving
record, use of automobile, mileage driven, and years of driving
experience.
For automobile insurance, most insurance companies will
order a Motor Vehicle Report (MVR) for all the drivers listed
on the insurance application. The MVR is the state’s official
record of driving information obtained from the DMV.
It is used to verify accidents, traffic violations and license
suspensions for all potential drivers listed on the application.
A California Insurance Proof Certificate (SR22) filing is
required in cases of unsatisfied judgments, major convictions,
license suspensions and failure to have liability at the time of
an accident. Your insurance company files this form with the
DMV. The filing requirement period can be up to three years.
Most major convictions of traffic offenses, such as hit and run,
reckless driving, and driving under the influence will remain
on your record for seven years from the violation date. Most
minor convictions will remain on your record for three years.
The SR22 form should not be confused with the SR1 form,
which is the California Traffic Accident Report Form.
Whenever you are involved in an accident, the DMV requires
that you file the SR1 form within ten days of the accident
date, if there is any bodily injury, or property damage that
exceeds $750.

What Else Should I Keep in Mind?
• Inquire about discounts (such as multi-car, airbags,
anti-theft device, etc.) and/or surcharges the company
applies. All companies will not offer the same type of plans,
nor have the same underwriting rules (eligibility/acceptability
guidelines). Therefore, it is critical to ask for this information.
• Make sure you know the length of the policy term. This can
be one month, six months (semi-annual) or one year (annual),
depending on the insurance company.
• Many companies have their own payment (installment) plans
which allow you to pay the premium over a period of time for
a service fee. If you decide to buy a policy on an installment
plan, find out the applicable finance or service charges. If you
use a premium finance company to pay for your insurance, the
monthly payments may be easier, but the total of payments will
be larger. Moreover, if the policy is cancelled, the insurance
company must remit all return premiums to the finance
company, who will apply them to your account.
• Check to see if you are responsible for paying any up front fees.
Sometimes insurance companies charge policy issuance fees.
Once the policy is issued, this fee is generally fully earned.
If the policy is canceled later, the fee will not be returned.
• Ask about higher deductibles. By requesting higher deductibles
on comprehensive and collision coverage, you can lower your
costs. However, remember that the deductible you choose is
what you are responsible for paying up front in the event you
file a claim against your automobile insurance policy.
• Should you drop comprehensive and/or collision coverage
on an older car? It may not be cost-effective to have
comprehensive or collision coverage on cars worth less than
$1,000 because any claim you make would not substantially
exceed the annual premium cost and deductible amounts.