Brief Guide to California State Auto Insurance Laws

If you live in the state of California, it is a good idea to know what laws, regulations and protections the state has created regarding car insurance. Understanding California state auto insurance laws will make shopping for a policy much easier, and will allow you to make decisions based on your inherent rights as a resident of the Golden State.

Access to Auto Insurance Quotes

According to the California Department of Insurance, the state of California passed Assembly Bill 2677 in 2004, which requires all insurance companies operating within the state to give customers access to quotes or estimates at the lowest rate available to them. This means that California auto insurance laws ensure that consumers obtain accurate information when shopping for insurance policies.

AB 2677 mandates that insurance companies provide either a toll-free telephone number or a web site at which consumers can obtain those quotes. In California, the insurance company must provide the consumer with a "cost estimate of its lowest priced personal auto policy at the limits the consumer requests and for which the consumer is eligible." This makes it illegal for insurance companies to overcharge customers when customers could be getting the same coverage for a lower rate.

Consumer Privacy

Auto insurance laws in California protect consumer privacy by limiting the information brokers and agents can disclose to third parties. Generally, any non-public information is protected, which means that insurance companies can't use information they have collected in an unauthorized manner. This includes health information; for example, if you are in a car accident, the auto insurance company can't disclose details of your condition without consent.

Broker Fee Requirements

In California, auto insurance laws also protect consumers from unscrupulous broker fees, and they require insurance companies to disclose all fees prior to signing contracts or accepting payment from consumers. If you know of any insurance company, agent, or broker charging unscrupulous fees, it is important to notify the Department of Insurance with the details.

California Automobile Assigned Risk Plan

California's auto insurance laws provide the California Automobile Assigned Risk Plan, which is intended for consumers who are unable to obtain insurance the standard way. In other words, if you've had too many citations or accidents, normal car insurance companies might not extend a policy to you. In this case, you have access to the CAARP, which will assign you an insurance company with pre-determined rates.

Capping

It is illegal in California for auto insurance companies to refer consumers to legal representatives in exchange for a "finder's fee." Capping is a felony in the state of California, so know that you don't have to take a referral from an insurance agent or broker when you need the assistance of legal counsel.

Auto insurance laws in California are detailed at the California Department of Insurance web site. Understanding your rights can protect you from unscrupulous agents and brokers, and will allow you to make informed decisions about your insurance needs.

Sources:

"Auto Premium Quote," California Department of Insurance.

"Privacy of Nonpublic Personal Information," California Department of Insurance.

"Broker Fee Regulations Summary," California Department of Insurance.