How to choose Car Insurance?

In this post we will answer the 3 most common questions and uncover common myths & misconceptions about automobile insurance in California.

QUESTION #1. What is “Full Coverage”? – This term is loosely used in the industry and can leave you, the consumer, thinking that all is covered when there may end up being a large amounts of gaps in coverage. 🤔

The term “Full Coverage” insurance SHOULD ONLY be used when you have purchased all 7 lines of auto insurance coverage. – Yes, there are 7 parts to a true auto insurance policy in California and you get to choose what’s important to you.

Seven (7) parts to a CA Automobile Insurance Policy 👇🏼

1) Liability ($15,000 minimum in California and up to $1,000,000) – which pays others outside your immediate family that you have injured with your vehicle.

2) Medical Payments (primary & secondary) – which pays you, your passengers & immediate family for the Ambulance Ride, E.R. bill, Medical follow ups, Rehabilitation, Loss Wages, plus Pain & Suffering due to a No Fault and/or At Fault Accident.

3) Uninsured Motorist BI & PD (2 parts) – which pays you, & your passengers for the Ambulance Ride, E.R. bill, Medical follow ups, Rehabilitation, Loss Wages, Pain & Suffering and damages to your car due to a No Fault Accident caused by a Uninsured or Underinsured driver.

4) Comprehensive – covers most damage to your vehicle except mechanical or collision damage. Usually there is a deductible that applies.

5) Collision – covers damage caused to your vehicle by an object or person colliding into your vehicle or your vehicle colliding into an object or person. Usually a deductible applies.

6) Towing & Roadside – this a “feel good” coverage that either reimburses or directly pays for most towing & roadside services.

7) Rental Car – this coverage pays for you to get a rental or temporary vehicle while your vehicle is being repaired for a covered loss by your insurance company.

The 7 coverages mentioned above ☝🏼 can be primary and direct (A Tier) or secondary and on a reimbursement basis (B,C, D Tier). Which leads us to our second most asked question.

QUESTION #2. How can I make my insurance cheaper? – There’s a couple ways at accomplishing this. One, is to look at carriers that prefer to insure individuals, vehicles or neighborhoods like you and yours. To accomplish this first option you’ll want to work with an experienced and knowledgeable insurance broker. Because you will need to understand at which tier you are currently insured at (A,B,C or D – explanation below). Secondly, you can downgrade in the quality of insurance carrier or coverage. Which we don’t suggest you to do but we mention it because many in the industry will skip step 1 and take you directly to step 2 without letting you know. Then at the time of the claim you’ll end up feeling as if the carrier was to blame when in fact it was the person you worked with that got you into that mess to begin with.

QUESTION #3. Is it cheaper to go direct or online? – Auto Insurance pricing is calculated the same way with ALL insurance companies. What makes the difference in pricing is what you are being given or what you are giving up. Online and direct carriers understand that most of their clients are chasing a price because most consumers don’t understand insurance. So their rating programs pull you and lead you to choosing options that give them the upper hand over you. Such as lower per accident coverage, less medical and under reporting usage. Leaving you underinsured and vulnerable to being denied a claim for being dishonest.

Insurance companies only want to keep your money and that’s why I rather choose the cheapest!

☝🏼 the above statement is a misconception that we often hear from consumers. However, contrary to popular belief, insurance companies make the majority of their profits by investing your insurance dollar. So in many cases today, you will hear of insureds, consumers, being given a full refund instead of getting their claim paid. Why? Because the insurance carrier already made a profit from you day 1!

There’s really no difference between XYZ Insurance and Geeko Online.

☝🏼here’s another huge misconception! The best way for us to explain this is by sharing what we call the “A,B,C’s of Auto Insurance”. – ALL auto insurance policies are written up on a contract between YOU and the INSURANCE COMPANY. By law the contract is written on a standard industry form that starts out the same BUT then each carrier removes what they choose as not being profitable.

The “A Tier” carriers, (Travelers, MetLife, Mapfre, Kemper to name a few), pretty much leave the contract as is and offer you the broadest options. Such as fully expanding your coverage to those whom borrow your vehicle. Also, fully expanding your coverage to a vehicle not owned by you but being driven by you and by fully covering household teen drivers just as if they were you. – Being that these companies provide so much, they will only offer competitive rates to those they want to insure AND usually their highest coverage will be priced lower than a lower tier carrier offering the same coverage amount. 😃👍🏼

The “B Tier” carriers, (Most online or direct companies), are those that don’t want to provide so much BUT instead water down the contract. By incentivizing you to get mid range coverage that limits their exposure and by you slightly giving up some of your consumer rights. Such as not fully expanding coverage to others and limiting who is insured as a driver. Many times leaving your household members uninsured if not fully rated as drivers on your policy. – In exchange for a contract mostly favoring the carrier, you are provided a slightly lower rate. However, the pool of drivers these companies want to insure are usually those that have smudges on their records and or those that do not want more than a certain amount of coverage. 🤔

The “C Tier” carriers are those that insure high risk drivers willing to accept a stripped down policy in exchange for a low rate. No bells & whistles and straight coverage to solely cover the drivers rated and the vehicles listed, no one else. – These companies understand who they insure and adjust the policy contract to favor themselves should the insured fail to do his or her due diligence. 😔

The “D Tier” carriers, (Cost-U-A-Leg, Fie$ta, General, Highway, U $ave & $15 a month just to name a few), are those that only follow the minimum legal requirements set by the State to provide Minimum Legal Liability. Other than that the rest of the policy is turned upside down and in favor of them. Limiting the insured driver and forcing him or her to abide by the company rules set with an understanding that the rules can change at any given time. Rules that state that an accident will NOT be covered if they deem that you were breaking the law at the time. Or instead refunding you all your premiums and not paying the claim because you failed to disclose who lives or visits your household on a regular basis. – These tier D carriers are like predatory lenders. Preying on the uninformed consumer that believes he or she can’t be insured elsewhere. 😡

Please understand that this blog post is for informational purposes and not legal advise. To fully understand your policy we suggest you read up on your policy jacket and find the exclusions section. There you will find what is not covered and it will give you a better idea of where your auto insurance stands.

Here at TCS Insurance Brokers you’ll become a well informed consumer and you’ll fully understand how your chosen coverage works. Allowing for you to be better protected and save money where it counts!

Call or text at (209)207-0577

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