California just upped minimum insurance coverage requirements, and the NBC Bay Area Responds team has some tips that could save consumers a good chunk of money.
There's a little-publicized route to savings hundreds of dollars on auto insurance, especially for new drivers or those not making a lot of money at work.
As is the case with many people, the economy is pinching Dublin resident Jared Allen’s wallet.
“Gas, groceries, utilities, rent, you name it -- it’s more expensive,” Allen said.
Add to that list car insurance.
“Yeah, it went up,” Allen said of his latest auto insurance premium.
The new required minimum coverages are $30,000 for a single injury or death, $60,000 for multiple injuries or deaths, and $15,000 for damage to a vehicle or property. For those with old policies that had less coverage, they’ll have to bump up their new policy and likely pay more.
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Car insurance is required in California, and the soaring premiums concern watchdogs like Douglas Heller, the director of insurance at the Consumer Federation of America.
“What we see around the country is especially in times of high inflation and just tight budgets, we see so many people who are struggling to meet the state mandates that we buy auto insurance,” noted Heller.
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There's a possible solution. In California, low-income families have a little-publicized lifeline for low-cost coverage. No mascots. No clever commercials. No snazzy names. It’s literally called California’s Low Cost Auto Insurance.
Amy Nungaray is with the California Department of Insurance and serves as the program manager.
“The average consumer who participates in the program pays a little less than $450 per year,” Nungaray said.
That’s a lot lower than the $1,910 average annual auto insurance premium in California, according to the finance site NerdWallet.
Nungaray said the more than 40,000 drivers currently in the Low Cost Auto Insurance program get their coverage from regular car insurance companies.
So, why is it so much cheaper to go through the state? A couple of reasons. First, California’s Low Cost Auto Insurance program allows only drivers with a good driving record. So it’s prequalifying drivers for the car insurance carriers. It’s bare-bones coverage. No rental replacement, roadside assistance, or other add-ons. Eligible drivers must also have to earn less than $39,125 a year for one person or $80,375 for a family of four.
To check eligibility, go to mylowcostauto.com to take the eligibility test and find a local agent.
“We will reach out to you within 24 to 48 hours to have you submit some documents,” Nungaray said. “And from there, you will get assigned a carrier.”
The income limits may seem like a “road closed” sign for many families. But experts say anyone who takes just 60 minutes to research their car insurance can find savings.
“We have found that if people spend an hour shopping for insurance, they can usually find a savings on the market from what they were paying,” said Heller, who also serves on the board of the California Automobile Assigned Risk Plan (CAARP), which oversees California’s Low Cost Auto Insurance program.
When shopping around for coverage, consumers should make sure they’re comparing apples to apples. They might find comprehensive coverage for things like a broken windshield baked into one policy but optional in another. So they might need that full hour to do an accurate, side-by-side comparison.
Have an insurance issue? Let us know, so we can help.
