California Car Insurance Guide (Cheap Rates + Best Companies)

The land of movie stars and endless beaches, California is where we wanna be! It’s not hard to see why other people feel the exact same way we do, as it’s one of the most populated states in the nation.

Having to share the road with all of these other dream-seekers, however, can definitely be quite a squeeze. Making sure that you have the proper insurance in case you get into an accident with one of these other drivers is extremely important.

That’s where we come in! We’ve put together this comprehensive guide to help you navigate your California car insurance needs.

We’ll cover such topics as the specific coverage you’ll need, the largest insurance providers in California, state-specific laws, and some facts and statistics about driving in California.

So hold on tight and buckle up, let’s get started.

If you want to start comparing today, you can use our FREE online tool now. All you need is your zip code to get started.

California Insurance Coverage and Rates

In this first section, we’ll dissect the car insurance coverage you’ll need to have while driving in California, as well as some of the rates unique to California.

Keep reading to find out more.

California Minimum Coverage

Most states across the nation require something known as minimum liability coverage.

This coverage basically ensures that you have the insurance coverage (and funds) needed to cover the costs of an accident, should you be in one. The minimum of this is just the smallest amount of liability coverage you can legally get.

California is no exception. What makes this coverage so important in California, however, is that California is considered a “no-fault” state.

What is a “no-fault” state? It means that regardless of who is at fault for an accident, whether it was you or the other driver, you will have to pay for your own part of the accident.

So if you are injured, or have property damage because of that accident, you will be the one (and your insurance provider) who will have to pay.

Pretty important right? So this minimum liability coverage just ensures that all drivers have the ability to pay.

What kind of minimum liability coverage is required for California you might ask? Well, California has the following minimum liability coverage requirements:

• $15,000 for the payment of bodily injury or death of one person

• $30,000 for the payment of bodily injury or death of multiple people

• $5,000 for the payment of any property damage caused

Keep in mind this is just the minimum coverage you are legally allowed to have, if you get into an accident and have to pay for the costs from that accident, these amounts may not be enough! So it’s always wise to at least consider getting more than this minimum liability coverage.

Forms of Financial Responsibility

As it is required for you to have at least the minimum liability coverage in order to drive in California, you’ll have to be able to provide some sort of proof of this. This is known as a form of financial responsibility, or more commonly known as proof of insurance.

So what kind of proof of insurance should you carry with you in California? Well, any of the following options are acceptable according to California’s DMV:

• A motor vehicle liability insurance policy.
• A deposit of $35,000 with DMV.
• A surety bond for $35,000 obtained from a company licensed to do business in California.
• A DMV-issued self-insurance certificate.

So as long as you have one of these types of forms of financial responsibility while you are driving, you’ll be fine.

Premiums as a Percentage of Income

If you’ve ever had to pay taxes, you’ve probably at least heard of the term disposable income. But what is it and why would it affect your car insurance premium?

Well, disposable income is basically the money that you are left with after your taxes have been fully paid.

So let’s say you earn $75,000 before taxes, and, after taxes, you are left with $60,000. This $60,000 is considered your disposable income.

Your disposable income is what you’d use to pay for all of your expenses. Expenses such as health insurance coverage, mortgage payments, rent payments, etc. All from this disposable income. Including your car insurance premium.

In the table below, we’ve collected the per capita disposable income for California and compared it to how much insurance premiums cost, giving you a percentage of exactly how much of your disposable goes to paying your insurance premiums.

As you can see, California citizens tend to pay approximately 2 percent of their disposable income towards their insurance premiums.

Not too bad, but this is why it’s so important to make sure to budget your income so that you are able to pay your premiums.

Want to know how much of your own income is going to your insurance? Use the tool below in order to get the exact percentage.

CalculatorPro

Average Monthly Car Insurance Rates in CA (Liability, Collision, Comprehensive)

According to the National Association of Insurance Commissioners (NAIC), California has the following core coverage costs:

Additional Liability

In addition to the minimum liability coverage, there are additional liability coverage options that you can add to your policy for extra protection.

The two most common, and probably most valuable in California are Medical Payments (MedPay) and Uninsured/Underinsured Motorist coverage.

MedPay is the coverage option that will help cover any medical expenses that you incur from any accident that you’re in.

Uninsured/Underinsured Motorist coverage is the coverage option that will help cover you should you be involved in an accident with another driver who either has less than the minimum liability coverage or who doesn’t have any insurance coverage.

Considering the fact that the uninsured/underinsured motorist rate in California is 15.2 percent (ranking is as the 12th in the nation for uninsured/underinsured drivers), having this coverage definitely wouldn’t hurt.

https://youtu.be/LH-6wizPE-g

So now that you know what these coverage options are, we’ll discuss their loss ratios. But what is a loss ratio and why would it matter here?

Well, a loss ratio is basically comparing how much a company makes from the insurance premiums you pay them to the amount of money they pay in insurance claims for their customers.

Knowing the loss ratios gives you a better idea as to how financially stable companies are for these coverage options.

So what do you have to look for? Well, you want a loss ratio that isn’t too high (over 100 percent) and you don’t want a loss ratio that is too low. Aim for that Goldilocks, just right kind of loss ratio. Why?

A loss ratio that is too high means that companies are paying out too much in insurance claims and are at a risk for going bankrupt.

A loss ratio that is too low means that companies aren’t paying out enough in insurance claims for their customers.

So what do you have to look forward to in California?

As you can see from the table above, the loss ratios for both coverage options in California is pretty stable. Not too high and not too low.

Add-Ons, Endorsements, and Riders

If you’re looking for additional coverage but not sure what to choose, there are a few cheap add-on coverage types you may not have even thought of.

Getting additional coverage for cheap can save you cash down the road.

Here are a few add on coverage types that you could find useful:

• Guaranteed Auto Protection (GAP)
• Personal Umbrella Policy (PUP)
• Rental Reimbursement
• Emergency Roadside Assistance
• Mechanical Breakdown Insurance
• Non-Owner Car Insurance
• Modified Car Insurance Coverage
• Classic Car Insurance
• Pay-As-You-Drive or Usage-Based Insurance

Average Monthly Car Insurance Rates by Age & Gender in CA

We’ll now take a look at the demographic rates for California citizens. There’s a common myth that men tend to pay more for their insurance rates, so we took a look to see if this was true, with the data we found displayed in the table below.

As you can see, it’s actually marital status and age that play bigger factors into what you’ll pay for insurance rates.

Some states have banned discrimination based on gender for car insurance rates, and this is one of those few states. As you can see the rate for males and females is the same, but the rate still varies with age.

Rates by ZIP Code and City

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Best Car Insurance Companies in California

There are thousands of car insurance companies in the United States, making it pretty overwhelming when you’re trying to choose the perfect insurance coverage for yourself.

We’ve taken the hard part out for you and have collected some data from the largest insurance providers in California to hopefully help you narrow down your choices.

Largest Companies Financial Rating

There’s a rating system in place, known as the A.M. Best Rating, that can actually help you determine what an insurance provider’s financial health looks like. That’s right.

The higher the grade the provider receives, the more financially stable they’ve been deemed, and therefore they’re likely a more reliable provider.

Take a look at the A.M. Best Ratings for the largest companies in California below:

Companies with the Best Customer Ratings

Knowing how satisfied other people are with companies can definitely affect how we feel about a company and its reliability. The more satisfied others are with a company, the more we tend to trust that company.

Who is the cheapest car insurance company in CA? Review the average auto insurance rates by company below:

J.D. Power conducted a study to help find out the best customer ratings across the nation by region. Based on their results, these were the results for the California region:

California Car Insurance Rates by Company

Commute Rates by Companies

How far you travel for your commute on a regular basis can actually affect your insurance rates at some companies.

Some states have banned discrimination based on your credit score when it comes to auto insurance rates, and this is one of those States.

As you can see from the table above, the farther you travel, the more expensive your insurance rate is going to be in California.

Coverage Level Rates by Companies

No one likes paying more for less, but did you know you could actually be paying a higher insurance rate for a lower coverage level?

You can see from the table above that low coverage plan with Farmers would cost you $4,651.83, while a high coverage plan with Allstate would only cost you $4,739.46.

Making sure you compare insurance provider rates will be key to helping you keep your costs low.

Driving Record Rates by Companies

Yes, obviously insurance companies are going to look at your driving record as well. It helps to let them know how safe of a driver you are.

So if you’re looking to lower your insurance rates, being a safe driver is one of your best bets.

How Much Car Insurance Costs in California

Explore the varying costs of car insurance in California by city. From Alviso to Upland, discover how insurance expenses differ across different locations within the state. Get insights into the factors influencing these cost variations and make informed decisions about your car insurance coverage based on your specific city of residence.

Number of Insurers in California

Did you know there are two major classes of insurance providers? Insurance providers are divided into domestic providers and foreign providers. What’s the difference between the two?

• Domestic Provider: Providers that are only available in the state they are located in (think of that mom and pop’s local insurance agency)
• Foreign Provider: Providers that are available in many states across the nation (think of the larger insurance providers such as Allstate or Progressive).

So how many of these two provider classes do you have available to you in California? Well, you have 99 domestic providers and 671 foreign providers to choose from.

California State Laws

California is one of the largest states in the nation, making it extremely unique from most others. As such, California has some unique state laws that you’ll want to be aware of while you’re out on the road.

We’ll cover topics on car insurance laws, vehicle licensing laws, safety laws, and more.

Car Insurance Laws

We’ve mentioned a few times that it’s required for California citizens to carry at least the minimum liability coverage in order to legally drive. Due to this, there are a few car insurance laws you’ll want to know about.

High-Risk Laws

A high-risk driver is someone who has a high number of traffic violations, accidents, or DUI related incidents on their driving record.

In California, if you’ve been labeled as a high-risk driver, you likely are having a hard time finding an insurance provider willing to provide you with coverage.

But you’re required to have at least the minimum liability coverage in order to legally drive in the state, so what are you to do?

Well, luckily for you, California has something known as the California Automobile Assigned Risk Plan (CAARP). This is a program that high-risk drivers can apply for, that basically guarantees you will get at least the minimum liability coverage you need.

What happens when you apply to this program is that you are assigned to a participating insurance provider (all providers who want to do business in California must agree to participate) and they will then provide you with the coverage that you need.

There is a caveat to this program, however. As you as assigned to this provider, the provider can then charge you whatever they deem reasonable for your insurance rates.

So it’s always wise to try and find coverage prior to applying to this program because when you are assigned to a provider, you are locked into whatever rate they charge.

Low-Cost Insurance

For those citizens in California that are in need of a low-cost government insurance program, you will have California’s Low Cost Auto Insurance Program (CLCA) to rely on. It is a state-sponsored program that helps to makes car insurance affordable for you.

According to the program, to qualify you must have the following:

• Have a Valid California Driver’s License
• Meet Income Eligibility Guidelines
• Own a Vehicle Valued at $25,000 or Less
• Be at Least 16 Years of Age
• Have a Good Driving Record

The policy you would receive from this program would include a 10/20/3 minimum liability coverage.

• Up to $10,000 per person in case of bodily injury or death
• Up to $20,000 per accident in case of bodily injury or death
• Up to $3,000 for property damage

Additionally, the program can also provide two optional coverage options: Uninsured Motorist-Bodily Injury and Medical Payment.

What’s an additional way for you to save some cash on your car insurance? Car insurance discounts.

Check out the list below of some of the most common car insurance discount to see if you qualify for any:

• Good Student
• Safe Driver / Accident-less Driver
• Homeowners
• Multiple Vehicles
• Paperless / Green (discounts offered if you opt for a paperless insurance policy)
• Auto-Payments
• Safety Devices

Read more: What is the Allstate Good Student Discount?

Windshield Coverage

Windshield coverage can be extremely valuable for your vehicle, but it is usually optional in most states. The same goes for California, as they have no specific laws requiring insurance companies to offer special glass coverage or no-deductible windshield replacement.

Should you need to repair or replace your windshield, insurance companies can use aftermarket parts as long as there is a written notice to the consumer and at least equal in terms of fit, quality, performance, and warranty as to the OEM.

Automobile Insurance Fraud in California

Insurance fraud is one of the largest and most common crimes in the nation. According to the Insurance Information Institute (III), insurance fraud attributes $30 billion in losses each year.

Insurance fraud is particularly relevant in no-fault states such as California, as individuals ranging from the policyholder to even medical provider, will pad costs associated with a legitimate claim to obtain more money.

According to California’s Department of Insurance, insurance fraud can be committed in the following ways:

• The suspect had the intent to defraud. Insurance fraud is a “specific” intent crime. This means a prosecutor must prove that the person involved knowingly committed an act to defraud.
• An act is completed. Simply making a misrepresentation (written or oral) to an insurer with knowledge that is untrue is sufficient.
• The act and intent must come together. One without the other is not a crime.
• Actual loss is not needed as long as the suspect has committed an act and had the intent to commit the crime. No money necessarily has to be lost by a victim.

Therefore, it is a crime in every state across the nation, and committing insurance fraud can land you into some serious trouble, including jail time.

You can contact the California Department of Insurance to report insurance fraud if you suspect that it has occurred.

Check out the video below for some of the more hilarious attempts at car insurance fraud.

https://www.youtube.com/watch?v=09MK6qLPWOg&t=3s

Statute of Limitations

If you are to get into an accident and need to file a claim or file a lawsuit for any reason, you will need to be familiar with a term known as the statute of limitations.

The statute of limitations is essentially a time cap on the amount of time you have in order to submit any claims/lawsuits.

How much time do you have in California?

• Personal Injury: Three years
• Property Damage: Three years

So if you need to bring a case to court or need to submit a claim, make sure you remember these time frames. They start on the day of your accident until the times above.

Vehicle Licensing Laws

California has some vehicle licensing laws for citizens that you’ll want to adhere to while you are out for a drive.

Penalties for Driving without Insurance

As we’ve mentioned several times already, you are required to have at least the minimum liability coverage in order to legally drive in the state of California.

If you are caught driving without insurance, you’ll be facing the following penalties:

Teen Driver Laws

One of the most exciting times of a young person’s life is when they are finally able to hop behind the wheel. Well, in order to get to this freedom, teens will need to adhere to the following rules:

License Renewal Procedures

New Residents

If you are new to California, you will need to make sure you get your new California driver’s license.

According to California’s DMV, you will need to obtain your California driver’s license by providing proof of residency in California.

Read more: How much is car insurance for a 20-year-old?

Rules of the Road

Now that you know some of the car insurance and vehicle licensing laws, you’ll need to familiarize yourself with some of the rules of the road.

Fault Versus No-Fault

As we’ve stated in an earlier section, California is a no-fault state.

This means that regardless of who caused the accident, you will need to depend on your own insurance coverage to pay for any damages/injuries you incurred from that accident.

This is why having at least the minimum liability coverage is so vital.

Seat Belt and Car Seat Laws

California has the following car seat and seat belt laws, according to the Insurance Institute for Highway Safety (IIHS):

Keep Right and Move Over Laws

Keep Right and Move Over laws are extremely easy laws to follow.

Keep Right laws in California state that you need to keep right if you are driving slower than the average speed of traffic around you. Easy right?

Move Over laws are just as simple. If you see a vehicle approaching that has flashing lights, move over! This includes vehicles such as emergency vehicles, law enforcement, utility vehicles, etc.

Speed Limits

According to the Insurance Institute for Highway Safety (IIHS), California has the following speed limits:

Safety Laws

As frustrating as they may seem at the time, safety laws are put in place for a reason. They’re there to not only keep you safe but other drivers on the road as well.

DUI Laws

Drinking and driving has become an epidemic in the country, becoming one of the leading causes of traffic fatalities nationwide. It is a cause that is 100 percent avoidable,

It is why most states have cracked down on offenders, with California being no exception. California has the following DUI laws:

If you are caught drinking and driving, you will be facing the following penalties:

Read more: How much is car insurance for an 18-year-old?

Marijuana-Impaired Driving Laws

California is one of the states in the nation that has actually completely legalized the use of marijuana for both medical use and recreational use.

As this is such a new law to be passed, however, there aren’t really any driving-related specific laws on this in California as of now.

If you want to see how drivers can be affected by marijuana use behind the wheel, check out the video below.

Distracted Driving Laws

Distracted driving is another common cause of traffic fatalities in the nation, which is why this is another thing lawmakers have been cracking down on.

In California, you have the following distracted driving laws you’ll want to adhere to:

Driving in California

So now that you know all of the laws and rules you’ll need to equip yourself with, in this section, we’ll discuss how those rules translate into the facts and statistics of driving in the state of California.

Vehicle Theft in California

The table listed below are the most common vehicles types to be stolen in the state of California:

An FBI conducted study also found the top ten cities in California for vehicle theft, shown in the table down below:

Road Fatalities in California

We’ll now discuss some of the road fatality statistics for California. It’s definitely not the more fun side, but they’re facts that we feel will better equip you in the future.

The various factors below that contribute to the road fatalities in California are according to the National Highway Traffic Safety Administration (NHTSA).

Fatal Crashes by Weather Condition and Light Condition

Top 10 Counties for Fatalities

Fatalities by Road Type

Fatalities by Person Type

Fatalities by Crash Type

Speeding Fatalities by County

Alcohol-Impaired Fatalities by County

Teen Drinking and Driving

One of the saddest parts of the statistics above is that this includes teens who have been drinking and driving.

California is currently ranked as the 36th most dangerous state for teens drinking and driving.

Responsibility has the following facts on underage drinking and driving in California:

EMS Response Time

Transportation

Almost there, just one last section! Here, we’ll talk about some of the various transportation statistics in California.

The data for this section (for Car Ownership, Commute Time, and Commuter Transportation) was taken from the Census Bureau via DataUSA.io.

Car Ownership

The average number of vehicles owned per household in California is two vehicles.

Commute Time

According to the national average, most American citizens have a commute time of 25.5 minutes. In California, the commute time is an average of 28 minutes. That means that California citizens, on average, spend more time commuting than others across the nation.

Commuter Transportation

There are so many different ways to commute these days, from driving yourself to even working from home. But in California, the top method of transportation is to drive alone at a whopping 73.9 percent.

Traffic Congestion in California

What’s the one thing most drivers dread out on the road? That’s right, traffic.

Unfortunately for California, there are a few cities pretty notorious for traffic congestion.

According to INRIX Scorecard, the following cities are pretty hectic in terms of traffic:

TomTom has the following traffic congestion data for California:

Finally, according to Numbeo, the following California data could be found:

It’s the final countdown… of this comprehensive guide. You made it to the end! We hope that we were able to give you the information you need to help you select the perfect insurance coverage for your needs.

If you’re ready to start comparing today, don’t forget to use our FREE online tool, all you need is your zip code.

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