You have to carry full coverage auto insurance any time you're financing a car in Los Angeles. This is a good practice for many reasons, but with the price of insurance in LA on the high side of the national average, this could be a bummer – especially if you’re struggling with credit issues and finances to begin with.
Auto Insurance Requirements for Bad Credit Borrowers
As mentioned, when you finance a vehicle in Los Angeles, you have to have full coverage insurance. But what exactly does this mean?
Full coverage insurance rules vary by state, but typically include some form of liability, comprehensive, collision, and uninsured motorist coverage. This way, you and the lender are covered for nearly any situation that could arise with your car.
Each component of full coverage auto insurance protects you from different types of damage:
- Liability coverage – This is typically mandatory coverage in almost all states. You may have heard of this referred to as “PL/PD,” which stands for personal liability/property damage. This is usually the minimum amount of car insurance a person must carry when they own a vehicle. It covers medical bills and property damage resulting from an accident whether you’re at fault or not.
- Comprehensive coverage – Comprehensive coverage accounts for things which aren’t caused by an accident, such as fallen tree limbs, theft, hail damage, damage from hitting an animal, and more.
- Collision coverage – This covers car repairs that are accident-related.
- Uninsured/underinsured motorist coverage – If you’re in an accident with a driver that doesn’t have insurance, or one that doesn’t have enough insurance, this coverage is designed to protect you.
If you’re looking for a quote, our trusted partner allows you to view and compare auto insurance rates online.
Determining Your Coverage Needs in Los Angeles
California is one of only three states that currently ban the use of credit scores in determining car insurance rates – Hawaii and Massachusetts are the others. Another factor that can’t be used to determine your auto insurance rates in California is gender.
However, there are other factors that can, and do, help insurers decide how much you have to pay for car insurance in LA. These factors include the vehicle you drive, your driving record, where you live, your age, and the type and amount of coverage you’re getting.
When it comes to insuring a car you’re financing in Los Angeles, you’re going to find that it costs a pretty penny. In fact, LA is ranked as having the 10th highest auto insurance rates in the nation, according to the 2019 State of Auto Insurance report issued by The Zebra. The average annual car insurance premium for Angelenos is $2,510.
Of course, your rates are based on your situation and the insurance company you’re working with.
Getting the Car You Need in LA
Now that you know what kind of auto insurance coverage you need as a bad credit borrower in Los Angeles, you can begin the search for your next car loan. Remember, vehicle type can play a factor in how much your insurance costs, so be sure to do your research to ensure you get a reliable car that meets your needs but doesn’t drive up your insurance premiums.
When you’re ready to get a bad credit auto loan in LA, Auto Credit Express is here to help. For over 20 years, we’ve been connecting borrowers to special finance dealerships that can help them, and we want to make you a match, too.
To get connected to a local dealer near you, simply fill out our easy, no-obligation car loan request form, and we’ll get to work for you!