What order is the process of buying, insuring and registering my vehicle in California?
What insurance coverages are available in California?
What is a Deductible and how does it work?
Who is insured to drive my car?
What do I do if I am involved in an accident?
What should I do if I get pulled over by the police?

What order is the process of buying, insuring and registering my vehicle in California?

1) Purchase your vehicle.
2) Insure the vehicle.
3) Transfer ownership of the vehicle into your name with the DMV. In California it is necessary to have the vehicle undergo a smog check within the preceding 90 days when doing a title transfer. It is the seller’s responsibility to smog the vehicle.

Which auto insurance coverages are available in California and what do they cover?

Liability
If you hurt someone or damage someone’s property in an accident, this pays for covered damages and also defends you if someone sues you as a result. This is the only coverage required by law. Coverage limits are separated into 3 categories: Bodily Injury Per Person, Bodily Injury Maximum Per Occurrence (if more than one person is hurt), and Property Damage You Cause To Other Party. The limits of liability insurance coverage required by California law is a minimum of $15,000/$30,000/$5,000. Those limits can be increased up to $250,000/$500,000/$250,000.

Medical Payments
This pays for covered medical expenses up to policy limits for anyone injured while in your vehicle, regardless of who is at fault. Limits range from $1,000 up to $10,000.

Uninsured Motorist Bodily Injury and Property Damage
If you’re in an accident caused by someone who doesn’t have insurance, or not enough, this pays for you and other passengers in your vehicle, up to your policy limits. If the driver of the uninsured vehicle is “identifiable” you can also collect up to $3500 for your vehicle or waive your collision deductible if you have collision coverage. Limits are similar to liability limits with a minimum of $15,000/$30,000 up to a maximum usually of $250,000/$500,000.

Collision
If you add Collision coverage, you’re covered if your car rolls over, gets hit by another car, or hits another car or object, minus your deductible. This coverage is required by your lender if there is a loan on the vehicle.

Comprehensive (also known as “Other than Collision”)
This coverage protects your car if it is stolen or damaged by something other than collision, such as fire, theft, glass breakage, vandalism, windstorm, etc. A deductible applies. This coverage is also required by your lender if there is a loan on the vehicle.

Rental Car
If your vehicle is involved in a claim, rental car coverage will allow you to get a rental car for a certain period of time as a temporary replacement. Typical rental car coverage will provide a supplement of $30 per day up to 30 days per year.

Towing/Roadside Assistance
Coverage that enables you to get your vehicle towed and in some cases assistance if your vehicle runs out of gas, breaks down or you lock your keys inside your car.

What is a Comprehensive and Collision Deductible and how does it work?

When you purchase comprehensive or collision coverages you always have a deductible. Deductibles can range from $100 to $5000 but most of the time is either $500 or $1,000. The higher the deductible is, the lower your premium is. The way a deductible works is simple. When your vehicle incurs damage that is covered by your policy, you must first pay the deductible before the insurance company will pay for any repairs. Once the deductible amount has been met the insurance company will pay for the repair or replacement of your vehicle up to its actual cash value. If the damage to your vehicle is less than your deductible amount then you repair the damages yourself.

Who is insured to drive my car?

This can be trickier than most people realize.

Short answer:

Generally people can borrow your insured car and be covered as long as you have given them permission to use your car; this is called “Permissive Use” and almost all policies have some form of permissive use. There are exceptions to these rules sometimes. Read below for further details.

If someone outside your household uses your car in most cases they are covered automatically.

However, household members usually must be declared on the policy and a premium charged for them in order for them to be covered or they have to be “excluded” which means they specifically cannot drive the car. When you apply for insurance you sign a statement that you MUST list the other members of your household or they are not insured. This is to protect the carrier from a person concealing that a higher risk driver might be residing in the household and regularly using the vehicle which would legally entitle the insurance company to a higher premium.

What is “Permissive Use” and how does it work with auto insurance in California?

“Permissive use” basically refers to you giving somebody “Permission” to use your car who is not listed as a driver on your auto insurance policy.

There are a few versions of permissive use that vary widely from one carrier to another and this is a frequently misunderstood issue. Be very careful.

Oftentimes there are dramatic reductions in coverage amounts on insurance policies even when a covered permissive user has an accident. One such reduction is called “drop-down limits”, which means that if a person has an accident while borrowing the car, the limits of liability are reduced to what the state of California require. Those limits are only $15,000 per person for bodily injuries (BI)/$30,000 per occurrence maximum for bodily injuries(BI)/$5,000 for property damage (PD).

Example: Driver “A” has an insurance policy with full coverage with permissive use and his liability coverages are $100,000 per person (for BI)/$300,000 per occurrence (for BI maximum)/$50,000 per occurrence (for PD). His policy has a “drop-down limit” clause. Let’s say he loans his car to a friend (driver “B”) who doesn’t reside with him and that friend has a serious accident where the injuries to other party amount to $65,000 and he totals the other car which has a value of $28,000. In this scenario, the “drop down clause” is in effect and the most Driver A’s policy will pay is $15,000 for the other persons injuries and $5,000 for their vehicle which clearly isn’t enough. In this case Driver A is legally liable for the balance of the damages; $50,000 for injuries and $23,000 for the vehicle. If Driver B has coverage, their coverage would be secondary and their limits would then apply until they run out as well. Otherwise, Driver “A” will most likely be sued by the other party.

“Drop down limits” are VERY COMMON and only one example of many that contain limitations, so always ask your agent what their carrier’s limitations are.

What do I do if I am involved in an accident in San Diego, California?

1) Stay as calm as possible.
2) Check for injuries. Life and health are more important than damage to vehicles. When in doubt call 911.
3) If the accident is minor and there are no serious injuries, move cars to a safe place, rather than risk being in moving traffic.
4) Turn on hazard lights. If warranted, and possible, use cones, warning triangles or flares for safety.
5) Call the police, even if the car accident is minor. They will usually not respond unless someone is injured or unless the accident occurs on the highway or in a busy roadway and safety is an issue.
6) Notify your insurance agent about the accident immediately.
7) Don’t sign any document unless it is for the police or your insurance agent
8) Make immediate notes about the accident including the specific damages to all vehicles involved. Some important things to get from the other driver are their name, multiple contact phone numbers, their insurance company’s name and their policy number, the year make and model of their vehicle and the license plate number. If the name on the auto registration and/or insurance policy is different from the name of the driver, establish the relationship and jot it down. Get witness information, if possible, as well.
9) Be polite, but don’t tell the other drivers or the police that the accident was your fault, even if you think it was. Likewise, do not accuse the other drivers of being at fault at this time. Everyone is usually shaken up immediately after an accident, and it is wise to state only the facts. Limit your discussion of the car accident to the insurance agent and the police. Even if the facts are embarrassing or detrimental to you, be truthful.
10) If you have a camera handy, and it is safe to do so, it may be helpful to photograph the accident scene.
11) If possible, do not leave the accident scene before the police officers and other drivers do.
12) Finally, remember that while getting the facts is very important, investigating the accident should be left to the police officers and the insurance companies.

What should I do if I get pulled over by the police in California?

1) Find a safe, well lit place to pull over that won’t put either you or the officer in a dangerous position with regards to the other traffic.
2) Stay in your car! If you get out of your car there is a good chance the officer will shout at you to get back in your car and a small chance they could pull out their gun to make sure you aren’t being hostile.
3) The officer will ask you for 3 documents so always have them handy: Evidence of insurance, your drivers license and registration for the vehicle.

These definitions and explanations are for general information only. Some of these statements may vary depending on which insurance company you are insured with. To best identify if these statements are accurate for your carrier you should consult with your insurance agent for exact details.

Contact Wayne McCormick with any advice you may need or questions. (619) 276-0492

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