California Car Insurance: Guide to Coverage at the Lowest Rates
California isn’t the most expensive state for car insurance premiums.
But it is one of the more expensive ones, coming in at #7 among the 50 states.
That puts additional pressure on drivers in California to take advantage of every opportunity to lower their annual premiums.
Is there a way to get the coverage level you need, without paying a fortune for car insurance? That’s exactly the question we’re going to address in this guide.
We’ll provide basic information on car insurance in California, as well as plenty of premium scenarios.
More importantly, we’ll also focus on strategies to get the best coverage for the lowest premium.
Average Car Insurance Rates in California
Below are average premiums in California based on three popular liability coverage levels.
- “Full coverage” – 100/300/100***, with comprehensive and collision coverage, including a deductible of $500: $2,125 per year
- Liability only, with 50/100/50: $752 per year
- Liability only, using the state minimum coverage levels: $606 per year
Now:
The statewide average car insurance premiums in California are here just to provide a range.
Average premiums are nothing more than the total amount of premiums paid in California, divided by the number of drivers in the state.
That offers little guidance as to what you can expect to pay, though it does provide something of a baseline for comparison purposes.
Your premium, however, is likely to look much different, based on the many factors that go into calculating car insurance premiums.
Understanding coverage levels
***100/300/100 refers to liability coverage levels.
The first number represents bodily injury or death to one person in a single at-fault accident.
The second number represents bodily injury or death to two or more people in a single at-fault car accident.
The third number refers to property damage caused to other vehicles in an at-fault accident.
Full coverage also includes collision and comprehensive coverage, which pays for repairs to your vehicle no matter who is at fault.)
Factors that Will Affect Your California Car Insurance Premium
There are seven primary factors that will affect the premium you’ll pay for car insurance in California.
Let’s look at each individually, and the impact each may have.
Gender
In most states, women will pay less for car insurance than men. This is most true among younger drivers, those between the ages of 16 and 21.
However, by age 25 the premium differences largely disappear.
And at certain age ranges, women may actually pay slightly more than men.
The premium differences are based on insurance industry experience within a given state.
If that experience shows one gender has a greater likelihood of at-fault accidents or moving violations, you’ll pay a higher premium even if you’re a safe driver.
Your age
Drivers under the age of 26 will pay substantially more for car insurance than drivers 26 or older.
For example, an 18-year-old male driver living in Los Angeles will pay $808 per month, or $9,696 per year, for 100/300/10 coverage. But a 30-year-old male with the same coverage will pay just $245 per month, or $2,960 per year.
In most states, drivers over the age of 65 also pay slightly more.
However, in California, this pattern is not particularly evident.
Driving history
There’s no single factor that will have a greater impact on your car insurance premium than your driving history.
Obviously:
Moving violations and at-fault accidents will do more to increase your premium than any single factor.
For example, your premium can increase by 34% for a speeding citation, and as high as 186% for a DUI/DWI first offense. (The premium increase will be even greater for a subsequent offense, and the insurance company may even refuse to renew your policy.)
A typical car insurance premium in California will increase by 73% after a single at-fault accident claim.
However, that’s only an average.
Exactly how much your premium will increase will be based on the dollar amount of the claim, and whether anyone was injured in the accident.
Insurance claims and moving violations will remain on your driving record for at least three years.
Credit history
To many drivers, credit history is something of a mystery factor.
Car insurance industry data shows a strong connection between high-risk driving and a poor credit history.
For that reason, you’ll pay more for car insurance if you have bad credit.
Coverage amount
As presented earlier in this guide, a driver in California will pay, on average, $2,125 per year for 100/300/100 coverage.
But, the premium drops to $752 per year for 50/100/50 coverage, and just $606 if you maintain only the minimum liability coverage required in the state.
Unfortunately, you may not have as much control over how much liability coverage you maintain. The limits should approximate your net worth.
For example, if you have a net worth of $200,000, maintaining state-mandated minimum coverage will be inadequate, and expose you to potential lawsuits where another driver may pursue your personal assets for full compensation.
The covered vehicle(s)
This factor is a major variable. Your car insurance premium will be higher on a $50,000 vehicle than it will on a $15,000 vehicle.
But certain types of vehicles also carry a higher risk.
For example, sports cars are considered high-risk vehicles because of the greater potential for the driver to speed, or even race.
As a general rule, the most expensive vehicles to ensure are pickup trucks, sports cars, and luxury vehicles.
The insurer
If credit history is something of a mystery factor to drivers, the company you buy coverage from can be a pleasant surprise.
Two companies can charge radically different premium levels for what is essentially the same coverage. And the difference can be substantial.
Look at the list below of six popular car insurance companies in California.
Each includes the average annual premium for 100/300/100 coverage:
- Geico: $1,490 per year
- United Financial: $1,795 per year
- Allstate: $2,223
- State Farm: $2,345 per year
- Allied Property & Casualty: $3,295
- Farmers: $2,387 per year
- Amco: $2,510 per year
As you can see from this list, Amco charges more than $1,000 per year over what Geico does for the same coverage.
Average California Car Insurance Rate Based on California City
We’ve been using statewide average premium levels throughout this guide.
But, even within California, there are wide differences in premiums based on your specific location.
Consider the premiums and seven major California cities for 100/300/100 coverage:
- Los Angeles: $2,422
- San Francisco: $2,169
- San Diego: $1,692
- Sacramento: $2,496
- Riverside: $2,100
- Fresno: $1,791
- Stockton: $2,520
Each of the above is a large city, which means the premium you’ll pay will be higher than it would if you lived in a rural area.
Large cities and metropolitan areas have higher premiums due to the greater concentration of traffic, which increases the likelihood of accidents.
What are Auto Insurance Laws in California?
California is not among the 12 US states that have no-fault car insurance laws.
Under a no-fault system, each driver files claims against their own insurance carrier, regardless of who is at fault.
California has standard coverage, which gives you the ability to file a claim against the at-fault driver’s insurance carrier.
Below are the state-mandated minimum liability coverage levels in California:
- $15,000 for bodily injury, for injury or death to one person in a single car accident.
- $30,000 for bodily injury, for injury or death to more than one person in a single car accident.
- $5,000 per accident for property damage (covers damage to the other driver’s vehicle, not yours).
This coverage is commonly shown as “15/30/5”.
Basic Information on Optional Coverages in California
As listed above, only liability and property damage coverage are required in California. But there are plenty of optional coverages you may be interested in.
Uninsured/under-insured motorist
Unfortunately, millions of drivers have no car insurance.
Millions more maintain only the state-mandated minimum, or slightly above.
If you’re involved in an accident caused by a person who either is uninsured or underinsured, this provision will reimburse you for excess costs.
Even though it’s not required, it’s strongly recommended.
Collision
Though you’re required to have property damage coverage in California, it only covers damage to the other driver’s car if you are the at-fault party.
But collision will cover damage to your vehicle, regardless of who is at fault.
Comprehensive
This provision will cover damage to your vehicle while it’s parked. This includes theft, damage from falling objects, and weather-related hazards, like storm damage.
Both collision and comprehensive typically have a deductible of $250 or higher. Both will be required if you have a loan or a lease on your vehicle.
Umbrella coverage
If you’re a high net worth individual, you may need more liability coverage than what is provided under a standard car insurance policy.
If so, you can add that additional coverage through an umbrella policy, and surprisingly low cost.
There are at least a dozen other optional car insurance provisions.
Some include roadside assistance, rental car reimbursement, and towing and labor.
You should request a list of all policy options from any car insurance company you’re working with.
Tips to Get the Best Rates on California Car Insurance Policies
Below are the most popular strategies to get the best rates on car insurance in California:
Shop between carriers
As we showed earlier, the difference between the lowest-cost carrier, and the highest-cost carrier can be as much as $1,000.
You should plan to shop between at least three or four companies before choosing your carrier.
Take advantage discounts
Insurance companies may have dozens of discounts available.
Get a list of those discounts, and take advantage of any that apply in your situation.
Complete a safe driver course
If you’re either a new driver or you have moving violations or at-fault accident claims, look into completing an insurance company-approved driver safety course.
Don’t maintain more liability coverage than you need
If you’re a young driver, and you have few assets, you don’t need full liability coverage.
The state minimum coverage limits will be sufficient.
Maintain credit clean
The difference in car insurance premiums between someone with good credit and someone with poor credit can amount to hundreds of dollars.
Do your best to maintain clean credit for at least the past two or three years, and your premium should decline.
Drive safely
If a single moving violation or at-fault accident claim can increase your premium by hundreds or thousands of dollars, you owe it to yourself to avoid this outcome.
You typically need to be “clean” for at least three years to be eligible for the lowest premiums available.
Bottom Line
California may not have the highest car insurance premiums in the country, but they’re definitely at the upper end of the range.
You owe it to yourself to understand exactly how car insurance in California works, and to know the strategies that will minimize the cost.
Take advantage of as many strategies in this guide as you can, and you can save hundreds or even thousands of dollars per year.
