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Risks of Having California Car Insurance

The process used by vehicle insurers to determine whether or not to insure an individual and the insurance premium to charge is known as insurance risk selection.

Car insurance in California has a classification reserved for drivers deemed to be problem drivers. These drivers are classified as high risk drivers and are required to have high risk auto insurance. They earn this classification as a result of severe infractions, multiple accidents, and drunken driving offenses. These drivers are required to have SR22 insurance covers provided by insurers licensed to issue the same in the state of California.

California car insurance demands that high risk auto insurance customers be charged more for their insurance plan. They will be charged between 15-100% more.

Individuals considered by California car insurance regulations to be of high risk include those who previously have had several traffic offense tickets and mishaps, those reported to have been driving under the influence of alcohol, those with bad credit history or bad driving records, and motorists over 70 years old.

High risk drivers with SR22 car insurance policies will have their status reported to the California Department of Motor Vehicles and their high risk insurance coverage can be mandated for a of mostly up to 3 years. The DMV will be in constant touch with the insurer of your SR22 policy. Should the insurer inform the DMV that your insurance cover has expired and that they are not offering you any more high-risk insurance policy, then you risk a suspension order from the DMV for your California driver’s license. For you to have the suspension order lifted, you have either to have your coverage reinstated by your auto insurance provider or alternatively get a new insurance coverage with a different car insurance provider licensed in the state of California. You will also be required to pay a reinstatement fee to the DMV which is normally about 125dollars.

 

But if after the 3 year term the insurer wishes to terminate your SR22 high risk coverage, they can file form SR26 and after this you should be allowed to maintain standard coverage. This is normally done after high risk drivers sustain 3 year duration with a clear report.

In order to ensure that they get normal insurance coverage after the 3 year period, high risk drivers should observe a few things. These include avoiding drinking and driving, sticking to speed limits, increasing credit scores and avoiding multi-tasking while driving.

Another risk connected to auto insurance in California is that of letting someone else drive your car. An auto insurance policy will normally list the insured drivers who are household members of the policy holder or those who drive the insured car regularly. There may be a risk when you let your car be driven by someone who is excluded on the car insurance policy. In case of an accident or a mishap when such an excluded person is driving your car, then your insurance claim could be denied and you may end up being personally responsible for that person’s damages. You also risk personal responsibility to damages to other third parties.