If you're applying for auto insurance for the first time or are looking to switch companies, there are a number of important decisions you'll need to make. These decisions can play a large role in determining how much you'll need to pay and what kind of coverage you have in the event of an accident. Don't go lightly into these decisions.

Do I Really Need Insurance?

Anyone who is faced with buying coverage they can't really afford has at least flirted with the notion of driving uninsured. This decision basically comes down to weighing one thing: the risk of having an accident or getting pulled over against the benefits of saving a lot of money. When it comes down to it, however, there really is no decision to be made here. Your state is likely aware of whether or not you are insured, regardless of whether or not you get pulled over. Your driver's license will probably be suspended if you are uninsured for kibg. So then it comes down to driving on a suspended license. Make that choice if you must, but jail time will follow if you are caught.

What Is The Coverage Amount?

While every state in the country insists that drivers have auto insurance, there is typically a minimum amount of coverage required. This coverage will protect you and other drivers in the event of an accident, but it will do little more. It won't cover you if an act of god damages your vehicle, it won't cover damage done in an accident with an uninsured driver, and it will not cover your medical bills should you be injured. These are big considerations you should think about when signing up for a package. Accidents happen and the costs can rack up rather quickly. Don't get caught in a situation where your financial life goes into a tailspin because of something beyond your control.

How Much Is The Deductible?

The general rule when it comes to buying insurance is that you have a choice. You can opt for a higher deductible, which will translate to a lower premium, or you can have the opposite. Which you choose is up to you. Generally speaking, the wisest choice is to pick the highest deductible you can pay in the event of an accident. Having said that, don't pick a figure you could only possibly pay or you might be able to pay. Pick something you will definitely be able to pay. If this is considerably low, you'll have to pay a higher price for your premium, but it will be worth it if you get into an accident.

It's no secret, California is a big state with millions of drivers puttering around on a daily basis. With such volume comes a certain number of accidents. That is why the State of California has made it mandatory for everyone operating a vehicle to have car insurance.

However, auto insurance can be tricky business. If a potential buyer isn't careful, they could end up paying extremely high premiums for very basic coverage. Nearly 25% of drivers have either inadequate or no car insurance whatsoever.

Enter the CLCAIP

Commonly known as the CLCAIP, the California Low Cost Automobile Insurance Program was setup to give people who are financially struggling the opportunity to get a decent coverage plan at a very affordable rate. Currently, people can start be covered for as little as $22.00 per month through the CLCAIP.

The numbers are astounding. In 2009, the program received around 7,000 applications, which was 1,000 more than the year before. In 2011, the program received over 25,000 applications which indicates exponential growth.

Why California needed the CLCAIP

When the financial crisis hit in 2008, a lot of people lost the ability to afford their current premiums. Steve Poizner, the Insurance Commissioner, saw this as an opportunity to start a service that could help people get proper coverage at a rate most families could afford. Its goal is to offer allow people to be legally insured for less than a 15% down payment alongside minimal monthly payments.

However, to be accepted into the program, an applicant must meet certain requirements. They are easy to meet and consist of:

Must have a clean driving record. The applicant cannot have more than a single at at-fault accident

Must not have any driving related felonies or misdemeanors arrests in the past 3 years.

The eligibility limit for a single person is $27,075. For two people its $36,425 and for a family of four its $55,125.

The car being insured cannot be valued at over $20,000

Despite the growing number of applications, the CLCAIP is in danger of being closed down. Accord to governor Schwarzenegger's office, the program isn't popular enough to keep funding and vetoed a bipartisan legislation increasing the program's yearly budget due to a low rate of participation.

The fate of the program remains unknown, however, the need for such a program remains. It's illegal to drive without insurance and offering people the chance to get full coverage at an affordable rate is something that Californians should keep benefiting from.