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Personal Cyber Insurance: What Does It Protect You From? How to Get It


We have heard about increasing cyber crime and cyber attacks in today's connected world but do you know about what risks you face online as an individual, or whether your home insurance covers you if you are a victim of internet or cyber crime? The more connected we become, the more people worry (or don’t worry enough) about cyber crime.

What if someone gained access to your smart home, the personal information on your computer, phone or even your wearable? Who could help you?

More criminals are accessing data and personal information and demanding money or threatening to sell the information.

According to the October 2018, Consumer Cyber Insurance and Security Spotlight Survey:

63 percent of Americans have at least one connected device at home. A third have connected smart home devices like thermostats; or wearables like personal fitness trackers. 25 percent of these have connected security cameras, door locks or appliances.

Most of us are connected in one way or another, personal cyber insurance can help if you become a victim of cyber crime.

What is Personal Cyber Crime Insurance?

Personal cyber crime insurance is an emerging insurance product for individuals that helps compensate you and members of your household for losses resulting from certain cyber attacks or if you are a victim of cyber crime. It also may provide assistance in recovering from a cyber attack.

Cyber Crime Insurance may also be referred to as:

  • Personal Cyberrisk Insurance
  • Internet Crime Insurance
  • Personal Cyber Insurance
  • Cyber Protection Insurance

What Does Personal Cyber Crime Insurance Cover?

Every cyber crime policy or coverage may be different. To understand cyber insurance coverage, always ask what the coverage or risks covered are, and what the conditions and exclusions are. There is no real standard for how insurance companies are covering internet crime right now so it is important to ask.

7 Things Cyber Insurance May Cover

Here is a list of some cyber crimes that are covered on some of the cyber insurance products available today. A policy may offer only a few of these coverages or all of them. You can use this list to ask questions and understand your options when shopping for personal cyber risk coverage.

  1. Ransomware and Cyber Extortion
  2. Malware
  3. Help dealing with phishing scams
  4. Help dealing with identity theft
  5. Loss of money due to a cyber attack that has compromised one of your accounts
  6. Assistance if a cyber attack is preventing you from accessing your home, files or information; some policies also include related data restoration
  7. Cyber bullying or internet stalking

Internet or Cyber Crime Insurance may be available as:

  • Stand-alone cybersecurity coverage (usually for businesses)
  • Coverage provided as part of package policies, such as in a high-value home policy

Does Home Insurance Cover Internet or Cyber Crime?

Not all home insurance covers cyber crime, in fact, according to the Insurance Information Institute, more than 4 out of 5 people with connected devices either lack coverage or don't know if they are covered.

A big part of this is because the type of coverage you may or may not have varies by insurance company, there is no "standard offering" in home insurance and there are companies that don't cover it at all.

For standard home insurance companies, cyber risk and cyber crime coverages are not usually included, but the concept is becoming more popular, so more insurance companies may start to offer the coverage as an endorsement to your policy.

To know if you are covered, ask your insurance company what is included in your policy. If you do not have coverage, ask if they have a product or endorsement to cover you.

Use the list above, 7 Things Cyber Insurance May Cover, to ask your insurance company what's covered, or use it as a checklist when you are shopping for cyber coverage as part of a home insurance policy.

Who Needs Cyber Protection Insurance?

Tech is a growing part of our daily lives. Anyone connected to the internet or using connected devices should consider cyber insurance. The increasing ways we connect online open us up to cyber crime on many levels.

Is Identity Theft Insurance and Cyber Crime Insurance the Same Thing?

No, Identity theft is a type of cyber crime but it is not the only kind of cyber crime, there are many forms of computer crime. Identity theft coverage is very specific and is often included in insurance offerings, but none of the other items in our list are normally included in an identity theft protection.

Top States With Cyber Crime Statistics

If you wonder if cyber crime is really an issue, here is some information on how much cyber crime is being reported across the country, from the Internet Crime Complaint Center's stats on cyber crime incidents.

  • California 41,974 incidents in 2017
  • Florida 21,887 incidents in 2017
  • Texas 21,852 incidents in 2017
  • New York 17,622 incidents in 2017
  • Pennsylvania 11,348 incidents in 2017
  • Virginia 9,436 incidents in 2017
  • Illinois 9,381 incidents in 2017
  • Ohio 8,157 incidents in 2017
  • Colorado 7,909 incidents in 2017
  • New Jersey 7,657 incidents in 2017

How Much Does Personal Cyber Insurance Cost?

The cost of cyber insurance for individuals varies depending on what is covered and how you get it. In some cases, it comes for free with certain home insurance policies like Burns and Wilcox high-value home insurance, for example.

Chubb Insurance and AIG are two other high-value home insurers who currently offer comprehensive cyber protection insurance coverage.

According to AON's Cyber Market Update Report, 170 insurers in the United States reported writing cyber insurance in 2017 (this includes business products) and although coverage is not as readily available now through all insurers, the number of insurers offering it for individuals is likely to grow as this type of crime continues to evolve and leaves both businesses and people at risk and needing protection.

Personal Cyber Insurance: What Does It Protect You From? How to Get It

What Is Personal Liability and Property Damage?


A commonly abbreviated car insurance term is PLPD. “PLPD” stands for Personal Liability and Property Damage — but knowing what it stands for and knowing why it’s important are two very different things. Understanding this coverage type will help you navigate your own insurance decisions, keep you knowledgeable about what is covered in an at-fault accident, and can even protect you in the event that you are in an accident caused by another driver.

PLPD is a vital and important part of every drivable vehicle’s insurance coverage, and PLPD coverage is the bare-bones legal minimum coverage in a lot of states. Knowing what PLPD covers and what it does not cover can save you a lot of confusion and hassle if you are ever in an accident. A better understanding of the coverage can also save you money on insurance.

PLPD is sometimes broken down into two distinct categories of coverage: PL, the personal liability component, and PD, property damage coverage. For either type of coverage to kick-in, you generally have to be the at-fault party in the accident. As the name implies, this means the accident — whether with another driver or an inanimate object like a lamp pole — has to have been caused by your own error.

You will not be responsible for paying the deductible when either personal liability or property damage coverage kicks in. However, if you are determined to be at-fault in an accident, your insurance rates are sure to go up.

PL = Personal Liability

PL can also be referred to as Bodily Injury coverage. Being negligent or at-fault in an accident makes you liable for the damages you caused. Personal liability can cover the other driver’s injuries, pain, and suffering — or that of their passengers — if you are found to be at fault.

Liability coverage is often written as a fraction, like 20,000/40,000, on your insurance policy. The first number (the numerator) in the fraction is the maximum amount to be paid out per person. The second number (the denominator) in the fraction is the maximum to be paid out per accident. If multiple people are injured in an accident, it is first-come, first-serve — meaning whoever files a claim first has the first opportunity at being covered up to the stated limits. That means that if you’re in an accident caused by another person and you become injured as a result, you shouldn’t dilly dally in filing a claim.

Maximum Amount Paid Per Person / Maximum Paid Out Per Accident

It’s important to understand the maximums on your insurance card and what they will mean for the reality of your financial situation if you get into an accident. While the maximums are the ceiling for what the insurance company will have to pay, individuals that are injured as a result of your driving can also try to hold you accountable for more through taking you to civil court.

Example: John is texting and driving, and he does not realize the light turned red. He rear-ends another vehicle with four passengers. All four passengers sustained minor injuries. John's personal liability limits are 100,000/300,000. Each passenger goes after John's insurance company for $20,000 apiece for pain and suffering. Each is awarded a settlement because John was found to be at fault and the amount pursued falls within the guidelines of less than 100,000 per person and not more than 300,000 per accident. If the limits are exceeded, the claimants can go after John personally.

Example: Assume a similar scenario as above yet John t-bones another vehicle going through the intersection. Four passengers are very seriously injured. John's personal liability limits are 100,000/300,000. Each passenger goes after John's insurance company for the maximum to be paid out of $100,00 for medical expenses and pain and suffering. The problem is, his policy will only cover up to $300,000 for the accident. Four people hurt each wanting 100k adds up to $400,000. It is just an example, and it could be worked out in multiple ways. The fourth injured party to file a claim could potentially be left with no chance to collect from John's car insurance policy. John does not have enough coverage to cover the damages and could possibly be sued and held personally responsible.

Personal Liability Key Points

  • Coverage is for the other party, not you.
  • State minimum limits vary, so check with your insurance representative.
  • Preferred limits are 100,000/300,000.
  • Need higher limits? Check into an umbrella policy.
  • Michigan has different rules regarding injuries.

PD = Property Damage

If you cause damage to property with your vehicles, such as another vehicle, street sign, mailbox, or anything else for that matter, coverage will be provided under property damage. Accidents do happen, so property damage is included in all vehicle insurance policies. The coverage is typically displayed right along with personal liability 100,000/300,000/100,000. The last 100,000 is the property damage limit.

Example: John hits a patch of ice and slides into a parked vehicle on the side of the road. Damage to the parked vehicle will be covered under the property damage coverage on his car insurance policy. The vehicle will be repaired with no deductible.

Property Damage Key Points

  • Covers property to others damaged by your vehicle
  • State minimum limits vary, check with your insurance representative.
  • Standard limit 100,000
  • Additional Coverage (not for all states)
  • Mini Tort or Limited Property Damage
  • Personal Injury Protection
  • Accidental Death Coverage
  • Property Protection

Anyone that is taking the time to read through their insurance policy is at risk of getting a headache. Industry jargon and complicated phrasing make looking through a policy nearly impossible for an average driver. If you are not dealing with insurance terminology on a daily basis, it is extremely tough to stay on top of the legalese. But now, next time you hear the phrase PLPD, you'll know exactly what the coverage is and how it protects you.

What Is Personal Liability and Property Damage?

How Do Split-Dollar Life Insurance Plans Work?


Split-dollar life insurance plans are not a type of life insurance policy. Instead, it's a contract that outlines how a life insurance policy will be shared and managed between two or more people.

Plans can be used with survivorship life insurance, permanent life, and whole life insurance policies that have cash values. Common provisions covered in a split-dollar plan are who pays the policy premiums and how the benefits are paid or shared.

For instance, plans may require two or more people to divide the cost of the life insurance policy, where each pays a portion of the premium. The same provision may be made when assigning beneficiaries to restrict or grant access to cash values.

There are several types of split-dollar life insurance plans, including those:

  • Between employer and employee
  • For owners of companies
  • Between shareholders and corporations
  • Between individuals

Individual plans are sometimes called private split-dollar life insurance plans and exist among family members or in an Irrevocable Life Insurance Trust.

However, the most common split-dollar life insurance plan is between an employer and an employee and that is the focus of this article.

How Does a Split-Dollar Plan Work?

Employee benefits packages commonly offer split-dollar life insurance plans. Employers provide these as an employment perk to better retain high-value employees. By offering to pay part of the cost of the life insurance policy, the employer provides a good benefit to their employees.

A split-dollar plan starts with the employer and the employee signing a contract. While contract details can vary, every plan will outline how much each person will pay toward the life insurance premium and who is eligible to cash in on the benefits of the policy.

What Are the Agreement Terms?

The terms of the split-dollar life insurance plan will cover all aspects of the policy payments, cash benefits, and payouts. The agreement is a legal document that should comply with applicable local, state, and federal laws and tax regulations.

Among other considerations, the agreement should include:

  • The total cost of the life insurance premium and how much the employer and employee each agree to pay
  • Who is entitled to the death benefit and cash values
  • Conditions the employee must meet to remain eligible for the plan, such as performance objectives and attendance requirements
  • When the plan takes effect and how long the plan will last
  • How the plan may be terminated or changed

What Happens If You Change Jobs?

The terms of a split-dollar plan often revolve around an employer/employee relationship. When an agreement is made, the conditions and provisions at the start of employment or during contract negotiations provide for what happens at the termination of employment.

The split-dollar life insurance plan should be seen as an employee benefit. The employer isn't likely to continue sharing the cost of a life insurance policy after your employment has ended, whether it was voluntary or not.

You may have the option to maintain the plan at your cost, but that depends on the insurance provider and terms of your policy.

Benefits of a Split-Dollar Insurance Plan

There are several advantages to sharing the cost of life insurance with a split-dollar plan. Depending on the type of agreement, benefits could include:

  • Low-cost life insurance: Sharing the cost of insurance gives you a low-cost option for life insurance. Some plans may even be "employer pay all" where corporate dollars pay for the entire plan.
  • Avoid insurability issues: Having the life insurance policy may protect you from becoming uninsurable in the future if you get sick while you are insured on the plan.
  • Future premium savings: You may experience savings on future life insurance when you maintain a policy. Insurance premiums can be based on the rate for the age you were when you originally bought insurance rather than the age when you retire or leave employment.
  • Access to cash: If the split-dollar plan allows, you may have access to cash values or the ability to borrow from the policy.
  • Tax benefits: Split-dollar plans can minimize gift and estate taxes, as well as other potential tax benefits, depending on how your plan is written.

Split-dollar life insurance plans can have many benefits. However, the flexibility and vast range of options that could be written into the agreements can make them difficult to understand.

Plans should always be written up and reviewed by a qualified professional, such as an attorney, to ensure they adhere to legal requirements and protect your interests. Seek the advice of a tax attorney, licensed insurance representative, and/or financial planner if you need help determining the implications for your situation.

Related: Best Whole Life Insurance Policies

How Do Split-Dollar Life Insurance Plans Work?

Penalties for Driving Without Insurance in Georgia


When the economy is hurting and times are tight, many people look to cut expenses anywhere they can. If you live in Georgia and are thinking of dropping your auto insurance as a way to save a few bucks, you might want to think again. 

The fact is that uninsured motorists are an expensive proposition for both the state and their fellow drivers, one that is becoming less and less tolerated. Remember, you aren’t the only one struggling through a bad economy. So is your state government, and they are looking to collect revenues anywhere they can — and that includes the penalties and fines you will likely incur if you are caught driving without insurance in Georgia.

If you remember one thing from reading this article, remember this: If you plan on driving a car on a public road in Georgia, you need to have car insurance. It is just not worth the risk to yourself, other drivers, or your wallet to do otherwise.

Georgia State Law Requirements:

Different states have different car insurance requirements, and Georgia is no different. Car insurance in this state is not optional. However, unlike some states, there is a pretty strict requirement for you to maintain your coverage at all times. 

The general rule in Georgia is simple: All vehicle owners and lessees in the state are required to maintain continuous mandatory liability insurance on their vehicles to legally drive, as well as register, obtain, renew and replace their license plates. The operative word here is “continuously.” That means that any lapse in coverage can lead to significant penalties. And the Georgia DMV will know if your insurance has lapsed because insurers are required by law to electronically inform them of any terminations, additions or deletions to your policy. Additionally, Georgia drivers must carry an insurer-issued policy information card with them at all times while driving. Failure to have your card with you when operating your vehicle can also result in penalties, so it’s a good idea to keep your insurance card on you at all times.

A Simple Car Insurance Lapse

What are the penalties for a simple lapse in coverage? They are pretty mild. As I mentioned, if your insurance is terminated or expired, your carrier will electronically notify the DMV. You will have thirty days from the date of expiration to provide proof of new insurance. If proof is received within that thirty days, and there was no lapse in coverage, you are good to go. (A “lapse,” by the way, is defined as ten or more days of no insurance coverage.) If proof of insurance is received within the thirty days, but there has been a lapse in coverage, you must pay a $25 lapse fee. Pretty simple, right? 

Be careful: If your insurance expires and you do not provide proof of insurance within the thirty-day period, the DMV will send you a “Notice of Pending Suspension.” If proof of insurance is not provided during this second thirty-day period, your vehicle’s registration will be suspended. (Remember, it is a misdemeanor to drive with a suspended registration. More on that in a minute.) To get the suspension lifted at this point, you will have to provide proof of insurance, pay the $25 lapse fee and an additional $60 reinstatement fee. Still pretty mild, right? But keep in mind, all of this has to do with a simple lapse in coverage. What happens if you get caught driving without insurance?

Driving Without Insurance? Not so Simple — or so Cheap.

If you’re thinking about playing the system and driving without insurance in Georgia, forget about it. I can’t say it enough: if you try to game the system, you will get caught. The state government has many smart people hard at work whose sole job responsibility is to catch people doing the very thing you are thinking of doing. So really: just don’t even think about it.

First and foremost, if you are caught driving without current valid insurance in Georgia, you will be charged with a misdemeanor, and it will remain on your record permanently. That means that every potential employer and maybe even overzealous potential date will be able to run a background check on you and discover that you tried to play fast and loose with the insurance system — not a good look for anyone. Additionally, you will have to appear in court and pay a fine for $200 to $1,000, so you risk paying up to a month’s rent. To top it off, your license will be suspended for 60 to 90 days. That means no driving, at all. It is also possible, though unlikely that you will receive jail time of up to 12 months. While jail time is usually reserved for repeat offenders who will also face steeper fines and longer suspensions, you run the risk any time you get behind the wheel in Georgia without car insurance. Now, add in the expense of hiring an attorney, and then ask yourself if canceling your insurance is a cost-saver.

The Biggest Penalty of All.

I’ve given you a short introduction to the penalties you can expect from the state if you drive in Georgia without the required insurance coverage. But these penalties could be the least of your problems. If you are in an accident for which you are liable, and you don’t have insurance, you may be looking at a civil action leading to damages that could cost you the assets you have spent a lifetime accumulating, including your home and any savings you have squirreled away — and then some. To sum up, times are tight, and you need to save money wherever you can. But canceling your auto insurance is not the way to do it. 

Penalties for Driving Without Insurance in Georgia

Simple Ways to Lower Home Insurance Costs and Save Money with Credits


Whether you are reviewing your home insurance renewal or shopping for a new insurance policy, finding the best premium to cut your insurance costs and save money is important. People sometimes think that if they have a price, it's already the best it can be, but over time your personal situation and the discounts an insurance company will offer may change so it is worth making sure you are getting all the possible discounts on your policy. Here are some simple ways to lower costs on your home insurance without reducing your coverage by using credits and discounts.

12 Types of Home Insurance Policy Credits and Discounts That Can Save Money On Your Insurance Costs

Everyone has heard that bundling your insurance (having your home and car insurance with the same insurance company) can save you money, or that being claims-free will give you a discount. These are the obvious discounts that we hope you are already taking advantage of. Usually, an insurance company will be aware of these facts, so getting those discounts is generally automatic. You may have also heard that taking a higher deductible can save you money on insurance, you can learn more about how to use your deductible to save you money here. However, in this list, we are going to go through some less obvious credits that people often take for granted, or may not even know about, and hopefully, this will help you knock some money off your current insurance premium.

  1. Home improvement credits, green home credits, new construction or renovation credits. When people keep their homes well maintained and have updated roofs, windows, or wiring, for example, many of the risks will be reduced. Make your insurance company aware of any of these to see if you get credits.
  2. Loyalty credits. Loyalty credits are discounts an insurance company may be willing to give you if you are with them for several years. Sometimes this is called a renewal discount, other times it may be a loyalty credit or even a discretionary credit that the company will give if you ask for it. Every company is different, even if they don't have a discount by this name, let your insurance representative know that you're shopping for the best price and you're wondering if the insurance company might not review your rate due to the fact that you've been loyal. It never hurts to ask.
  3. A good credit score discount. Insurance companies have found that a good credit score is directly related to lower claims incidence. Find out if you can get a discount for having a good credit score and learn more about insurance credit scoring and how that works here.
  4. Water Protection Device Credits and water shut off valves. Water damage is a major source of home insurance claims, so if you have extra protection some insurance companies will discount your premium for this.
  5. Gated community or HOA (Homeowners associations) credits. Living in neighborhoods or communities with increased security, like camera monitoring, 24 security guards or even a neighborhood watch may get you a discount.
  6. New Homeowner Credit. If you are a first-time homeowner we have many tips to help you save money when you shop for your first home insurance here, but you might also be able to ask for a first-time homeowner discount. It is not available with all insurance, but it is worth the ask.
  7. Alarm systems (monitored) with more than just fire and burglary. A lot of people focus on the fire and burglary portion of an alarm discount and forget to tell their insurance company when they upgrade their system or include additional protection devices like:
  • low-temperature detectors,
  • video cameras,
  • water leak sensors,
  • cellular back up.

The addition of these protections may add double the discount (if not more) of just a standard fire and burglar alarm. So when you ask if you have an alarm discount be sure and ask if all of the above are included or ask how much more you would save by upgrading your system. Also, note that a monitored alarm system will give you the best discount as opposed to a local alarm which is not as effective.

Simple Ways to Lower Home Insurance Costs and Save Money with Credits

Using smart home technology and upgraded alarm systems coudl save you money on your home insurance with discounts and credits.
 simonkr / E+ / GettyImages

8. High Tech Sensor credits Some insurance companies may offer 5-10 percent in high tech sensors or smart home credits.

9. Dry hydrants (for rural areas and locations that are not within close proximity to a fire hydrant). Investment in a dry hydrant may save thousands of dollars on home insurance premiums for properties in areas that are more remote. According to the National Fire Protection Association, there were over 1.3 million fires reported in the United States in 2017. When your home is in an area that does not have access to an adequate water supply, the price of your insurance will normally be higher. Ask what kind of discount you get if you have a dry hydrant.

10. Impact-resistant roofing. Impact-resistant roofing will significantly reduce your risk of damage due to hail and other objects falling. Some insurance companies will offer a discount.

11. New Policy discount. Home insurance companies sometimes offer a different rate to a new policyholder vs. the existing policyholder. Many times the "new policy discount" could be balanced by a "loyalty discount" on renewal, but it doesn't always work that way. If you aren't getting the best rates, don't rule out your last insurer when you shop around because they may be willing to offer you a "new client discount" if you go back to them. Before you leave your current insurance company ask them if you are getting their best rates before you cancel, just in case they have other rates to offer. You can also ask your previous insurance company for a letter of claims experience to prove how long you were insured.

12. Non-Smoker Discounts and other personal discounts. Being a non-smoker may get you a discount on your home insurance policy because it may reduce the risk of fire, but this isn't the only kind of discount an insurance company will give based on your personal profile, you may also be eligible for other discounts based on:

  • Your occupation;
  • If you have a university degree;
  • Your employer;
  • Membership with certain organizations;
  • Your marital status (or if you have kids);
  • Retirees, seniors or students may also qualify for discounts;
  • People who are mortgage-free may get a mortgagee free credit
  • People who pay in one installment vs payment plans may get discounts

Getting the Most Discounts to Lower Your Home Insurance Costs

Not every company will offer discounts for all of the items on our list, but as insurance companies look to be more competitive in attracting their target client, discounts like these will come into play. Asking about these discounts will help you find the company that will give you the lowest price while saving you money on your home insurance without having to reduce your coverage.

Simple Ways to Lower Home Insurance Costs and Save Money with Credits

Minimum Car Insurance Coverage in California


A necessity of modern life, insurance is something that is tough to go without—in some cases, it is illegal to not have it. In most states, it is required by law for drivers to have a minimal amount of car insurance. California is one of the states that require residents to purchase minimal insurance coverage for their automobiles.

Minimum car insurance amounts vary by state. For example, the California minimum car insurance coverages and premiums are different from the minimums in North Carolina. Basic car insurance protects you against an accident in which you cause damage to someone else's property or injure another person. More coverage can be purchased to help cover the cost of medical expenses and damage to your vehicle.

It is important to understand the minimum insurance required—by becoming aware of the requirements, you know whether your insurance meets the legal minimums and understand the consequences if it doesn't.

California Minimum Car Insurance

Bodily injury liability is insurance coverage that is designed to pay the medical costs and lost wages due to injuries sustained in an accident that is not the injured person's fault. Liability coverage can also help cover the legal costs if the insured driver is involved in a lawsuit regarding an accident.

If you are comparing policies, you might find many insurance carriers abbreviating coverage amounts, such as 15/30 for limits of $15,000/$30,000.

The minimum limits required are $15,000 for the death or injury of any one person in a car accident and $30,000 for the deaths or injuries if multiple people are involved.

In California, property damage liability coverage of $5,000 is the minimum amount required by law. This pays for damage done to another person's property resulting from a vehicular accident, up to the limit. Similar to bodily injury liability coverage, property damage liability coverage will pay for legal costs if the insured driver is then sued in connection to a vehicular accident. 

A tort is an action or actions, either intentional or unintentional, that cause harm to another person and in which a court will hold a party liable.

California is a tort state, which means the driver needs to be found at-fault for their policy to pay for the damage. What this means is that the investigation needs to determine the fault before the insurance provider will initiate any payments.

One concept to keep in mind is that car insurance, in general, follows the vehicle that is insured. If you loaned your car to a friend, their car insurance policy is not effective in your car—if they get into an accident, your insurance will most likely be responsible.

Purchasing Minimum Coverage

The minimum coverage required is generally very low. Damage amounting to $5,000 is a relatively small amount of repairs. If you only carry the minimum coverage and cause $9,000 in damage to another vehicle, you are going to have to come up with $4,000 to cover the remaining costs.

Car insurance carriers often reward drivers with lower rates for carrying higher limits—also known as preferred limits of liability.

Sometimes you can go from a 15/30/5 limit policy up to a 100/300/100 limit policy for a few dollars more. It really depends on the insurance carrier, your age, and your driving history. You shouldn't request minimum limits, assuming that they will be the cheapest. Have your agent quote you different limits so you can see the difference in cost for yourself.

The Penalties for Driving Without Car Insurance

Californians are required to have insurance only with companies that report electronically to the Department of Motor Vehicles. This means that every vehicle had insurance upon registration—it also means that a driver who does not have insurance did not continue paying for it, or canceled the coverage.

If you cannot afford to pay your insurance premiums and are involved in a car accident that is not covered by car insurance, your driver's license could be suspended. Additionally, if you are stopped by a police officer for whatever reason, you could face tickets and/or fines for being uninsured—in some cases, your license and registration might be suspended as well.

Having Insurance Is the Responsible Thing to Do

Having automobile insurance isn't just a legal requirement—it is also the responsible thing to do. Auto accidents cause property damage and bodily injury—the costs for both add up quickly.

The consequences are not only suspension, fines or other legal actions against the uninsured driver; the injuries and damages caused by an uninsured driver may not be fully covered by a policy, causing further damages to someone and their way of life—they may need to fund repairs or medical procedures on their own, draining their savings or retirement accounts.

Minimum Car Insurance Coverage in California

All About Insurance Renewals


An insurance renewal is the standard length of time an insurance policy is in effect without the insurance company adjusting your rate. Of course, there are exceptions to every rule, and it is possible for your rate to change shortly after purchasing a new policy if you do not meet underwriting guidelines or if you do something illegal or dangerous.

But, once you are through the initial policy period, your insurance rate should stay the same through each policy renewal unless you make a change. You will receive a declaration page along with other information explaining your policy. New proofs of insurance are usually enclosed with the renewal information.

When Does an Insurance Policy Renew?

The renewal date of your insurance policy is based on the date your policy took effect. So it could actually take place on any day of the year depending on when you originally started the policy. The other factor in determining your renewal date is the length of your policy period. Policies usually renew annually or semi-annually.

Some auto policies are locked in for a full year. Homeowner's policies are always one year, and vehicle policies for motorcycles, boats, and RV's are often renewed annually.

It is very common to have an auto policy renew every six months. Some motorcycle, boat, and RV policies also renew semi-annually.

Renewal information is usually mailed or emailed to you 45 to 30 days in advance of your renewal. You will receive a declaration page along with other information explaining your policy. A new proof of insurance is usually enclosed with the declaration page.

What Should I Do When My Insurance Renews?

Your renewal is a good time to review your policy to verify discounts or make changes to coverage. It is a nice reminder because sometimes insurance is easy to forget if you haven’t had the need to use it recently. It is a good time to contact your insurance agent to review your policy.

It is also important to continue making your payments. Making your payment notifies the insurance company you want to continue the policy. It is especially important to pay your renewal payment on time because some carriers do not allow any grace period on renewals. It is equally important to cancel your insurance policy if you do not want to continue because some companies do extend a grace period and may charge you for the grace period if you do not notify them of cancellation.

Why Did My Insurance Renewal Price Go Up?

It is possible for every person insured with a given carrier to have a rate increase. Insurance rates are governed by the states and increases are possible due to increased claim activity. If an insurance carrier is losing money, even a good driver with no accidents or tickets can have their rate increased. Just keep in mind, it is still a lower rate than someone with those violations.

It's also possible that increased driver risk can influence your rate. If you received a traffic violation or were involved in an at-fault accident, more than likely your insurance rates will be increased at your renewal.

Due to increasing costs for the insurance industry, it’s best to buckle up and expect a rate increase. According to James Lynch, chief actuary of the Insurance Information Institute, “Even if you haven’t had any changes in your record, there’s a pretty good chance your premium is going to be higher at the next renewal.” Why is this happening? Though the number of accidents is on the decline in the last decade, these accidents are getting more brutal and deadly– and thus coming with higher insurance payouts. According to the Insurance Research Council, while the number of bodily injury claims has fallen 14.5 percent in recent years, the average payout has risen a full 32 percent.

Can I Make a Change Before My Renewal?

Auto coverage is often changed between renewals, but it's different for motorcycles, RV's, and boats. Sometimes insurance carriers restrict changes on these policies to renewals only. Adding vehicles is always possible, but taking coverage on and off existing vehicles may not be. Check with your insurance carrier to see what is available in regards to changing coverage on your motorcycle, boat, or RV policy.

Rate Increase Before Your Renewal Date

If rates only change at renewal, you might be wondering why you are getting an additional $10 tacked onto your payment. Usually, if you see a mid-term rate change it is a fee. Slipping up and paying late one month on your insurance policy will result in a late fee. Late fees can range in price from $5 to $15. One good thing about late fees is it will go away next month so long as you pay on time.

Insurance policy renewals are a standard part of insurance. All policies renew and insurance companies have the ability to recalculate your insurance rate. Use your next renewal as a reminder to review your policy and think about possible changes.

Talk About Mistakes When They Happen

The biggest reason that your insurance rate goes up is that you have gotten into an accident or engaged in risky driving behavior in the past insurance period. While it’s easy (and perhaps feels less shameful) to avoid talking about the mistake until your rate goes up, you’ll often soften the blow if you tell your insurance agent about the accident or ticket as soon as it happens. At worst, you’ll be prepared for the consequences and have an idea of the anticipated increase in advance, and at best, your agent might be able to save you some money by negotiating before it’s too late. 

All About Insurance Renewals

What Is a Car Insurance Grace Period?


If you miss your car insurance payment by a couple of days or even a week, are you in deep trouble? Will you lose your car insurance coverage or suffer financial consequences? 

It all depends on the particulars of your policy, carrier, and state. But in general, it is never a good idea to rely on the grace period, and instead set good financial habits so that you can pay your car insurance premium on time every time. 

Many car insurance carriers offer a grace period after the date of your payment due date during which you will not be penalized. However, they are not all created equal and can vary a lot by insurance carrier. Grace periods can certainly come in handy, but it is important not to overuse them. Becoming dependent on your grace period can get you in a tight spot in the future. 

What Exactly Is a Grace Period?

A grace period is the amount of time you have to make your insurance payment after your normal due date. Paying within an allotted grace period will allow your insurance policy to continue without a lapse in insurance coverage or another ding on your record.

How Long Is a Grace Period Normally?

Unfortunately, there is not a standard grace period offered by all insurance carriers. It varies by insurance policy and state. Some insurance policies come with grace periods of three days, while others offer up to 30 days. Some companies offer a short grace period with no late fee and an extended grace period which includes a late fee. Definitely check with your insurance agent about your carrier’s specific policies well before you need to rely on the information.

Do All Insurance Carriers Offer Grace Periods?

Unfortunately, not all insurance carriers or policies offer grace periods. Some states, such as New York, do not offer grace periods on any insurance coverage. 

You will have better luck when you are insured by a preferred market insurance carrier versus a high-risk auto insurance policy. High-risk policies usually offer shorter grace periods and come with higher late fees if you miss a payment.

A grace period is an extra perk, not a requirement. Do not automatically assume you have a grace period with your car insurance policy.

Can I Use It Every Month?

Some insurance carriers do allow clients to use their grace period every single month. However, it is never a good idea to do so. Paying within your grace period every month can have some very negative consequences to your policy in the future.

  • Late fees are often added to your payment when you pay during your grace period. Late fees can vary from two all the way up to 20 dollars. Adding that kind of fee to your car insurance premium can make a huge difference in your annual insurance cost.
  • Paying in your grace period can delay any of your change requests. Many insurance carriers will not process your change request until your monthly payment has been made. Holding off on your payment can increase errors on your car insurance because a change cannot be made immediately.​​
  • When you are late on your payment, it can disrupt your future payment plan. There are only so many days in a month, and the insurance company is required to send you a bill with so many days notice. Paying within your grace period every month can throw the system off leaving you with a double payment in a future month to catch you up.
  • Preferred insurance carriers may be less likely to reinstate your car insurance policy if you pay during your grace period every month. If your policy does ever lapse, you want to show you were a good client who always paid promptly. Paying in your grace period over and over could reduce your chance of being reinstated.

Beware of insurance carriers who allow payment in a grace period except for renewal payments and sometimes the last payment in a billing cycle. Abnormalities like this make an accidental lapse in coverage more likely. Know your insurance carrier's grace period rules and make sure to follow them.

What If I Have an Accident?

An accident can happen at any time, even during your grace period. Fortunately for you, claims are typically covered. However, many companies will not proceed with the claim until you are caught up on your payment. Plan on paying your late payment, your current month's payment, and your deductible if you have one for your claim. It is a lot of cash to come up with all at once. It is just one more reason why getting behind on your payments and using your grace period regularly is not a good idea.

What Happens If I Go Past My Grace Period?

At the end of a grace period, your car insurance coverage can be stopped by your insurer—in other words, you no longer have car insurance—and in every state but New Hampshire and Virginia, this means you are breaking the law. If an accident occurs even one day after your grace period, you are on your own, without any coverage from your prior policy. Many states also charge a daily fine if you are caught without car insurance.

To get your insurance coverage back on your vehicle, there are often more penalties, which usually means a higher rate or a stricter payment plan option. You will probably have better luck working directly with your insurance agent than if you sheepishly send payment with no explanation. Ultimately, it is up to the individual insurance carrier whether or not to reinstate your policy.

A grace period is there to help you in an emergency time of need, not serve as a de-facto new due date. 

If you do not like your payment date or it is inconvenient given the way your payday falls every month, ask your insurance agent to help you change your due date. If mailing in your payment is a hassle, look into paying online via direct deposit or credit card. Do not rely on your grace period every month; it will always cost more money in the end.


What Is a Car Insurance Grace Period?