How the Best Car Insurance in California Could Be an Ideal Holiday Gift
Socks and wardrobe accessories are always needed. Books, music, and electronic devices are fun to unwrap. But here’s a gift that, while not as attractive as a new laptop or tablet, will prove to be just as appreciated in the long run: a year of car insurance.
There are many reasons why it can make such good sense to add a policy for young drivers to your holiday shopping list.
Why Would Anyone Buy Car Insurance as a Holiday Gift?
Drivers in the state of California must have at least the minimum car insurance coverage to get their licenses. Young drivers pay more for their coverage than those of other age groups. Put both of those facts together, and you can see just how appreciated a car insurance policy in holiday wrapping paper with a big red bow might be — especially when it gives your motorist loved one access to the best car insurance in California.
Let’s break it down.
According to 2021 statistics, 16-year-old drivers in California are charged an average of $3,744 a year for full coverage auto insurance as part of their parents’ policy. It goes up even more when the young motorist hits the ages of 18-20, since they will most likely have a separate policy from their parents. The cost for car insurance coverage doesn’t get dramatically reduced until the young motorists reach the age of 25 – and even then, it’s pretty high in California.
What that means is that your loved ones who are between the ages of about 16 and 25 can pay so much for car insurance in California that it might make them reconsider even getting behind the wheel of a car. Imagine their relief when they open up that envelope with a bow.
How to Reduce the Cost of Your Young-Driver Gift
You might have gulped when you read about how your new-driver teenager will be charged, on average, $3,744 a year for their car insurance in California — and that the rate will probably go up even higher once they reach the age of 18. Don’t panic. One thing to remember is that this is the average cost, per age group, for a full coverage policy.
Ask your insurance agent about various available discounts and other tips to reduce that total. For instance, students with good grades might pay less. Another strategy is to buy less than a full-coverage plan.
Full coverage is always preferred because it offers you the most financial protection if the covered driver is in an accident or suffers other damage to the vehicle. But like most “preferred” gifts, full coverage also costs considerably more than minimal coverage.
Minimal coverage in the state of California consists of the following:
- Bodily injury liability coverage of $15,000 per person or $30,000 per accident
- Property damage liability coverage of $5,000
- Uninsured motorist bodily injury coverage of $15,000 per person or $30,000 per accident
- Uninsured motorist property damage coverage of $3,500
What’s the Downside of Minimal Coverage?
The cost difference between full and minimal car insurance coverage points to the possible disadvantages of paying the least possible amount for your loved one’s car insurance. There’s a definite degree of risk in only obtaining minimal coverage. If the driver’s own vehicle is damaged, and no other motorist can be held responsible for the damage, you’ll pay for it out of your own pocket. That’s also true if the car is stolen and not recovered, or if it’s damaged by fire, flood, or other non-collision causes.
The biggest downside of minimum auto insurance coverage in California is what that kind of policy won’t cover. At the heart of full coverage car insurance options are two coverage features, known as collision and comprehensive. Together, they offer financial protection to the policy owner whose car is lost, damaged, or destroyed under most circumstances. Here’s what the two features offer:
Collision — When your car collides with another vehicle or with a stationary object, such as a fence or building, you can collect on your collision coverage.
Comprehensive — This type of coverage pays for the loss, damage, or destruction of your vehicle for reasons other than collision. This might include fire, theft, flood, or vandalism, among other causes. The vehicle’s collision with a deer or other animal is also covered.
What you must do in considering which way to go — minimal or full coverage — is to balance your budgetary considerations for insurance against the possible huge hit to your bank balance or that of your loved one if the automobile with minimal coverage is heavily damaged, lost, or destroyed.
One More Way to Reduce the Cost of Your Car Insurance Gift
When you discuss coverage with your insurance agent, be sure to ask about the effect your deductible will have on the rate you pay to make a gift of car insurance this holiday season.
The deductible is the out-of-pocket amount you agree to pay for a covered event before your insurer picks up the rest of the cost. For instance, if your deductible is for $500 and the cost of the bill for a covered collision is $2,500, you’ll pay the first $500, and your insurer will pay the remaining $2,000.
You’ll be rewarded with lower premiums if you agree to accept a higher deductible. That’s because your insurer will have to pay a smaller portion of a claim. The difference between accepting a $1,000 deductible instead of $500 can be considerable. When you crunch the numbers with your agent, just make sure that you can afford to pay the higher amount out of pocket if necessary.
Have You Decided to Put the Best Car Insurance in California in a Loved One’s Stocking This Year?
Is this the year when a gift-wrapped car insurance policy makes the most sense for a loved one? Then visit a Cost-U-Less office near you, get a quote online, or call us at 800-390-4071 for a quick insurance quote. Happy holidays!