Common Auto Insurance Mistakes California Drivers Should Avoid

Every year, hundreds of California motorists overpay for insurance or leave themselves inadequately insured in case of an accident due to mistakes that could have easily been avoided. These kinds of issues occur in a quiet manner, lurking in an insurance policy that goes unread until there is a problem with filing a claim or suddenly being hit with an outrageous increase in premiums. The good news is that the vast majority of expensive mistakes associated with auto insurance in California are relatively simple to catch.

For starters, if you are one of the many Californian drivers using a rideshare service such as Uber or Lyft, then there is something you should be aware of. SoCal Insurance & Financial Services provides an inexpensive rideshare endorsement, costing only $6 per month, which can be added to your existing personal insurance policy. 

Skipping a Coverage Review Before Renewal

Many people simply pay the renewal bill because that is how they always do it. It does not seem like there is any problem with that, yet your car insurance in California might be set for something that worked three years ago and not today.

Your driving habits have changed, the value of your car has shifted, and the distance you travel has gone up or down. In less than fifteen minutes, you can review all those factors and find out if there is any room for saving money.

Minimum State Requirements vs. Actual Protection

In California, the law mandates that all motorists carry at least the minimum liability coverage. A number of individuals falsely believe that having met the minimum requirement provides them with sufficient protection. This misconception is the most expensive mistake one can make as far as auto insurance in California is concerned. The minimum coverage was introduced in order to meet legal requirements rather than to provide enough money in case of an accident.

The costs related to an accident in medical expenses, repair services, and even lost wages may quickly accumulate and reach six figures. Many auto insurance companies offer larger liability coverage for a relatively small additional premium. It is in this very gap where drivers find themselves unprotected. Just a few minutes spent in discussion with your insurance agent will save you from trouble.

Are You Driving for Uber or Lyft Without Telling Your Insurer?

It is known that any personal auto insurance plan will not cover business usage of a particular vehicle. Therefore, if you are regularly or even sometimes working as an employee of Uber or Lyft but did not notify your insurer about it, you might be driving without insurance protection, even if you believe you do.

There is a grey zone between rides when personal auto insurance does not pay out because you are on the way to the passenger or have the passenger in the car, while the rideshare company commercial plan has its limitations too and depends on your status in the app at the particular moment. Rideshare endorsement was created exactly to cover such gaps and can easily be added to your car insurance plan. 

Selecting a Plan on the Basis of its Price Alone

Finding out the best deal is always sensible; however, price says very little about how things work when it comes to your claims process. Two plans may seem alike in terms of price quotes, and yet have completely different deductibles and different covered events, and their processing times will be quite different too.

Sometimes, the bigger auto insurance companies offer low initial prices and additional charges or specific terms that become known once there is an incident. In order to know if the plan suits you well or if it just seems to do so, you need to read the declarations page.

Why Do So Many Drivers Forget to Update Their Policy After Life Changes?

Your insurance is based on the basis of the current state of affairs when you signed up. You can have a new teen driver, moved to another city, bought another car, or a job with a longer commute than you used to have before, but there are many people who forget to notify the agent about that change.

It works both ways. You may be paying for something that you no longer use because the policy has old information about your cars, or you will not be able to get the claim because of inaccurate policy information. A simple five-minute call after any important events keeps your information up-to-date and makes the claims processing faster.

Missing Out On The Details In The Policy Exclusions

There are always exclusions on policies, but who bothers reading them until it’s too late? Typical exclusions may be driving your own car for deliveries, loaning your car to non-family members, or traveling across state lines for an extended period of time. Nothing out of the ordinary here, which is precisely why it causes so many problems.

Spend some time reading over those exclusions in your policy or have a conversation with your agent about them. Knowing what your auto insurance in California will cover is a lot more cost-effective than finding out after you’ve had an accident.

Lack of Correct Documentation Prior to the Occurrence of an Accident

Many people do not pay any attention to their documentation until the accident actually happens, which is the moment when it becomes more difficult than ever to find anything. Preparing all the important things will help speed up the claims process and reduce the possibility of a misunderstanding regarding insurance coverage.

The following things should be easily accessible to you either in the glove box of your car or on your phone:

• A current proof of insurance and your policy number;
• A personal contact number of your agent;
• Photos of your registration and your driver’s license;
• A list of things you need to take photos of and people to call right after an accident;
• Contacts of a reputable towing company in your city.

Having all the necessary data prepared will make your situation easier and give your insurer everything he or she needs to process a claim.

What Happens When You Allow Your Coverage to Lapse?

Even a brief lapse in your coverage will affect you for many years. Insurance companies record your continuous coverage history, and even the briefest lapses mean you’ll pay more for your insurance when you’re ready to renew it. In most cases, this effect lasts for around three to five years from the time you experience a lapse.

Coverage lapses generally happen for very innocent reasons: a missed payment, an error while moving to a new address, or switching insurance providers without everything being in place. All of these can be easily avoided by establishing automatic payments or reminders. If you’ve already experienced a lapse, it’s best to explain why to a potential new provider, rather than keeping it secret.

Choosing Only One Quote Rather Than Checking Multiple Quotes

A number of motorists obtain quotes from the first insurance company that comes to mind, find it acceptable, and proceed with the signing process without even bothering to see what other options exist. This tendency to go by a single quote is virtually certain to cost you extra, since prices for the same level of coverage may differ drastically across insurers due to reasons that have nothing to do with your driving history.

Obtaining three or four quotes with the same coverage amounts is less time-consuming than many people believe, and allows you to make an informed decision rather than a mere assumption. An independent agent is likely to secure multiple quotes instantly, avoiding the need to call every insurer and making it easier to tell which plan is a better deal.

Forgetting About Discounts You Are Already Eligible For

Getting a package of policies, keeping a clean driving record, completing a defensive driving course, and even storing your car in a garage rather than on the street can all make a person eligible for discounts that never appear automatically on an invoice. Usually, insurance companies expect the client to raise this issue themselves or sign up for these discounts at the moment of registration, so a driver who does not raise this issue never enjoys these discounts.

In most cases, it leads to further consequences. A driver who is eligible for two or three discounts but does not use them can pay more than he should each year. All one needs is to give their agent a call and ask, “What discounts am I eligible for?”

Good Insurance Coverage Habits Begin by Asking the Right Questions

Each one of the mistakes listed above comes down to treating insurance as a set-and-forget system. It is important to check your coverage periodically, read the fine print, and be straight with your insurance company about how you use your car. Those are little things that can protect you in case something bad happens.

In case you are driving with the help of a ride-sharing service, do not rely on getting into an accident to find out whether you have adequate coverage or not. SoCal Insurance & Financial Services can review your current policy and point out any weaknesses you might not know about, and even add an affordable rideshare endorsement that will take care of it.