Consumer Infomration - California Dept of Insurance

How do I find an insurance company?

Shop around. Find out from friends and relatives which companies, agents and/or brokers they are insured with. Also look through the yellow pages for the names of insurance companies and the agents/brokers in your area. Pick out 5 to 10 names and call them for a quote. Compare the coverages and prices offered, and pick the best one.

What is the difference between calling a direct writer, an agent or a broker?

A direct writer is an insurance company which sells its policies through their own employees or agents who only represent that company. You can call the company or its agent directly for a quote.

An independent agent will represent several insurance companies and would be able to give a comparison quote for all the companies he/she represents. They work similar to, and may also be a broker, but may not charge a broker fee for their services.

A broker basically works as your representative. For an agreed upon fee, the broker will look for insurance for you. The broker must tell you how much he/she charges for his/her service before you accept any quote. The broker does not represent any specific company, but will call other agents or companies for you to find the coverage you want.

Why should I shop around for insurance?

Under California's rating law, each insurance company is allowed to calculate its own rates based on its past loss experience and its estimate of future costs. Since each company's experience will differ, even within the same area, the rates will also differ. By calling several companies or agents for a comparison, you'll be saving money. You will be able to choose the company with the best price and coverage available for you.

What information do I need to have ready when I get a quote?

Before you contact the company or an agent for a quote, be prepared. Know what coverages you want, what limits of liability and deductibles you desire. Also have ready the following information:

1. Your driving record (accidents and moving violation convictions);
2. Your daily and annual mileage;
3. The basic information on all drivers in your household (i.e. name, age, sex, marital status, driving record, driver's license number, etc.);
4. Information on your auto(s) -- i.e. age, type, value, etc.

What are some things that I should ask the company/agent?

1. When you're getting the quote, ask them what discounts and/or surcharges the company applies. Many companies offer discounts like: the multi-auto discount for insuring two or more cars with the same company; the good student discount for a student wit h a good driving record, who maintains at least a 3.0 grade point average; the senior-citizen discount; a non-smoker discount, etc.
2. In addition, most companies follow some type of "safe driver plan" whereby either a discount or a surcharge is applied to the rates based on your driving record. Companies will usually consider the driving record for the past 3 to 5 years.
3. Some companies will also add a surcharge based on the type of vehicle you own, such as a sports auto, a high performance vehicle, a 4x4 truck, etc.
4. Finally, keep in mind that all companies will not offer the same type of plans or have the same underwriting rules (eligibility/acceptability guidelines). Therefore, ask around.

What else should I know about insurance coverage?

1. Be aware that the length of a policy term can be one month, three months (quarterly), six months (semi-annual) or one year (annual), depending on the insurance company. When you get a quote, make sure you know the length of the policy term.
   
2. Many companies have their own payment (installment) plans which allow for you to pay the premium over a period of time for a small service fee. If you decide to buy a policy on an installment plan, whether with semi-annual, quarterly or monthly payme nts, find out what those finance or service charges are.
   If you use a premium finance company to pay for your insurance, the monthly payments may be easier but the total payment will be larger.
3. Some companies charge a set "policy fee" in order to issue a policy. The fee usually runs from $25 to $30 and should be shown on your application and policy. Once the policy is issued, this policy fee is fully earned by the company. If the policy is c ancelled later, the policy fee will not be returned.

5 Hot Tips

1. Shop around for your insurance needs.
   
2. When you call for a quote or fill out an application, give complete and correct information.
   
3. After filling out an application or finance form, re-read it to see if everything is correct. Get a copy for your records. Don't sign a blank form; get the application filled out before you sign it.
   
4. When you get your policy, read it. Check the the coverages, limits, premium and other information to make sure it is correct. Also, read through the policy to know your rights and the company's rights under the terms of the policy.
   
5. When you have a claim, be aware that you do have rights regarding auto repairs. The California Department of Consumer Affairs requires a written estimate of repair costs before claims work begins. Although you may be allowed to use any shop you choose under your policy terms, you must first check with your insurer before repair work starts. The insurer will want to find out if the cost is reasonable and that all work is covered under the policy.

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4 Hot Tips on Complaints

1. Discuss the problem with your agent/broker first or with the customer services representative at your insurance company. You'll need to have ready your policy number (or account number), a description of the problem and other needed information. If yo u do not get a prompt answer, or are still dissatisfied, contact the California Department of Insurance (CDI) at 1-(800) 927- HELP.
   
2. If you talk with someone, keep notes of the conversation for your records. Note the person's name, what was discussed, and the date and time of your conversation.
   
3. If you write to the company or to CDI, keep a copy of your letter for your records. You should keep all letters, receipts, billings, and policies together for easy reference. Also, always keep your original documents and send only copies to the compan y or the CDI.
   
4. When you write to your company or the CDI, briefly state the problem and what you want done to correct it. Be sure to include your name, address, phone number, insurance company's name, the policy number, and the agent/broker's name.
   

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10 Insurance Terms You Should Know

1. Agent - A person authorized, by and on behalf of an insurer, to sell insurance.
2. Binder - A temporary or preliminary agreement which provides coverage until a policy can be written or delivered.
3. Broker - A person who, for payment of a fee by you, looks for insurance on your behalf.
4. Deductible - The arnount of the loss which the insured has to pay under the collision and comprehensive coverages.
5. Insured - The policyholder - the person(s) protected in case of an accident or loss.
6. Insurer - The insurance company.
7. Policy - Written contract of insurance.
8. Premium - The amount of money which the policyholder agrees to pay for the policy of insurance.
9. Quote - An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.
10. Surcharge - An extra charge applied by the insurer, usually for accidents or moving violation convictions, etc.

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Information Courtesy California Department of Insurance - Consumer Services Division