It's Memorial Day weekend and the open road awaits. With the start of the summer driving season, it's also a good time to do a little insurance checkup.
First, some good news: If you're on a limited income, the state Department of Insurance just dropped its premiums for those with clean driving records.
Starting July 1, under the California Low Cost Automobile Insurance Program, annual premiums for basic liability coverage will be anywhere from $226 to $338 depending on your county. That's an overall drop of 2.8 percent from 2012.
"We're really trying to reach out to those who don't necessarily think of themselves as low income," said Chris Shultz, deputy commissioner of the state Department of Insurance. "If you've been laid off from your job or receiving unemployment benefits, we'll calculate it based on what you're earning today, not what you might have earned in the past."
(Details on the CLCA insurance program are below.)
For everyone else, here's a refresher on auto insurance basics.
Why bother with insurance? Because it's the law. And if you're pulled over or in an accident and don't have insurance, the penalties can be severe.
In California, your vehicle registration and driver's license can be suspended and your car could be impounded if you don't have proof of insurance when stopped by law enforcement. If you're in an accident and aren't covered, there's a mandatory one-year suspension of your driver's license. And that's on top of court fees that can run up to $900, notes Shultz.
In California, state law requires all insurers to base their rates on three mandatory factors: miles driven annually, number of years driving and driving record.
Another 16 factors are considered optional, including age, gender, marital status, residence, type of vehicle, frequency of claims, etc.
Different carriers can weight those factors differently, which means premiums can vary widely from company to company and county to county.
Typically, auto insurance rates are highest for young males or those living in urban, freeway-intense areas.
By state law, all California drivers must carry minimum liability insurance, which covers bodily injuries caused to others and to property. In insurance jargon, California's basic requirement is known as 15/30/5. That means you must be covered for at least $15,000 per person and $30,000 per accident for bodily injury/death, as well as $5,000 for property damage.
Many drivers also elect to carry collision or comprehensive coverage for theft, vandalism or other damage to their vehicle caused by natural disasters or accidents. Another optional coverage is uninsured motorist, in case you're hit by someone who doesn't have insurance.
The state Department of Insurance also has a premium survey feature on its website that shows all carriers licensed to offer insurance in California. It's not an actual quote, but a basic idea of the range of insurance premium pricing where you live.
When I typed in my ZIP code and driving particulars, for instance, it showed a wide variance in annual premiums, from AAA's $1,830 to Safeco's $3,500.
"It gives you an understanding which companies are cheaper or more expensive in your given area. You can look for insurance companies you didn't know about," said Shultz, noting that it's also available for homeowners' insurance.
For precise quotes, call a local agent or use one of the online comparison sites.
Ways to lower premiums
The easiest way to bring down premiums is to ask for discounts, either online or from a local insurance agent. Discounts are available for clean driving records (three years or more), good-student discounts, safe-driver classes, multiple vehicles or multiple policies from the same carrier, etc.
Drivers should also check their daily commute mileage, because a drop in annual miles driven could lower their premiums, said Tully Lehman, spokesman for the Insurance Information Network of California.
"With gas prices, some drivers may not drive to work as often as they once did, opting instead to ride public transit or carpool," Lehman said. "A decrease in miles driven could afford some drivers a savings."
Another money-saver: increasing your deductible. For example, upping the comprehensive/collision deductible from $200 to $500 could result in savings of 15 to 30 percent a year, Lehman noted.
Another potential savings comes from dropping collision and/or comprehensive on an older vehicle. A few years ago, when Lehman was driving an older Jeep Cherokee worth only about $3,000, he and his insurer dropped his comprehensive coverage altogether.
"The car's value was so low that I basically self-insured for any damage caused by me in an accident."
But the cost of replacing a newer, $30,000 vehicle, for example, would be worth the cost of collision or comprehensive coverage, he noted.
He also recommends that most drivers carry more than the state's minimum of $5,000 in property damage coverage. "If you hit a neighbor's fence, crash into a car or hit a retaining wall, you'll hit that $5,000 policy limit quickly. And the rest will be out of your pocket," he said.
If you're a low-income resident with a clean driving record, the state Insurance Department offers extremely inexpensive insurance coverage. Started in 2000, the California Low Cost Automobile program offers very basic liability coverage.
As of July 1, the average annual premium in Sacramento will drop to $276 from $287. That's for one full year of coverage. (Note: There's a 25 percent surcharge for unmarried male drivers ages 19 through 24.)
To qualify, drivers must: have a clean driving record (no felony/misdemeanor driving convictions and no more than one property-damage accident in last three years); be at least 19 years old; own a vehicle valued less than $20,000 with no loans; and have continuously held a driver's license the last three years.
There are annual income limits for eligibility. For singles, it's up to $28,725; for a family of four, it's $58,875.
For details, go to www.mylowcostauto.com or call (866) 602-8861. If you qualify, the website will route you to one of 1,200 insurers licensed to provide CLCA policies.
More than 12,000 Californians are currently signed up, up from 10,000 in 2007.
Overall, the summer driving season means more road trips, with motorists leaving their normal commuter-driving routines and spending more time on freeways.
The best insurance: "Be aware, especially around big rigs on freeways," said Lehman. "It's always good to maintain your braking distance and stay out of blind spots. Be safe."
'BUT OFFICER, I ...'
When it comes to getting stopped by law enforcement, motorists have a predictable litany of excuses. Here's a recent sampling taken by Insurance.com:
1. I couldn't see the sign: 20.4 percent
2. I'm lost/unfamiliar with the roads: 15.6 percent
3. I didn't know it was broken: 12.4 percent
4. Everyone else was doing it: 6.4 percent
5. I've got an emergency situation. (i.e. a hot drink spilled on lap): 5.4 percent
6. I missed my turn/exit: 4.8 percent
7. I needed a bathroom break: 4.6 percent
8. I didn't do anything dangerous: 4.2 percent
9. I was en route to an emergency. (i.e. helping someone ill or injured): 4 percent
10. My GPS said it was the right thing to do: 2.2 percent
11. I'm just helping out. (i.e. driving an intoxicated friend): 2 percent
Source: February 2013 survey of 500 U.S. drivers
TIPS FOR TRAFFIC STOPS
If you do get pulled over, here's what Insurance.com recommends you do:
1. Acknowledge the officer's presence by turning on your right turn signal. Move your vehicle to the right shoulder as soon as it is safe.
2. Turn on your hazard lights.
3. Turn off your radio. Do not make a phone call.
4. Remain inside your vehicle.
5. Place your hands in clear view, such as on your steering wheel.
Call The Bee's Claudia Buck, (916) 321-1968. Read her Personal Finance blog, www.sacbee.com/personalfinanceblog.