- California currently has over 25 million registered vehicles and over 27 million issued driver’s licenses.
- The state’s minimum required liability coverage includes a bodily injury liability of $15,000 per person and $30,000 per accident, and a property damage liability of $5,000 per accident.
- California is a tort or fault state, where the party at fault is responsible for the other party’s damages.
- The average car insurance rate in California is $1,647.
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If you’ve ever tried to get anywhere in California, you know one of the most popular ways is by car. In 2018, the local Department of Motor Vehicles (DMV) counted over 25 million registered automobiles and over 27 million issued driver’s licenses.
Like most states, California requires anyone who drives to have car insurance. And as you may have guessed, with the number of drivers on the road, there are a lot of car insurance options.
To help you find the best one, we’ve put together everything you need to find affordable California car insurance. From the minimum coverage required to the top rated providers, our team has researched the best auto insurance available nationwide.
To find a plan that fits your needs, fill out the form below to start comparing quotes from providers available in California.
What Is The Required Car Insurance in California?
California requires all drivers to have an auto insurance policy with at least two types of liability coverage. In general, liability coverage helps pay for any damage to other drivers, their passengers, and their property in accidents where you are responsible. There are two types of liability coverage:
- Bodily injury liability (BI): Covers any injuries sustained by another person resulting from an accident you caused.
- Property damage liability (PD): Covers any damage to another person’s property, namely their car, resulting from an accidents you caused.
The California state minimum requirements for auto insurance coverage are:
- BI: $15,000 per person.
- BI: $30,000 per accident.
- PD: $5,000 per accident.
While this is the minimum coverage in California, it’s important to note that liability auto insurance only protects the other party – it doesn’t pay for any damage to you or your vehicle. Furthermore, the minimum usually isn’t enough to cover all the costs of an accident, and you may still be required to pay a sizable balance. When it comes to auto insurance, the best practice is to get the highest coverage you can afford in order to be fully protected.
DMV Self-Insurance Certificate
An alternative to having car insurance in California is proving you can be financially responsible to cover any potential accident.
California’s DMV recognizes the following types of financial responsibility:
- $35,000 cash deposit with DMV.
- DMV-issued self-insurance certificate.
- $35,000 surety bond from a company licensed to do business in California (Contact the Department of Insurance or 800-927-4357 to locate a licensed company).
These alternatives eliminate the need to pay monthly premiums and are good for those unable to get standard auto insurance (i.e., they have a rare car). However, they can be much pricier. In an at-fault accident that exceeds $35,000, the driver is required to pay the balance out of pocket.
What Are Car Insurance Laws in California?
When it comes to dealing with car accidents, California is a tort or fault state. A tort state requires that a party must be proven to be at fault for the accident before their insurance provider will pay for damages.
The party at fault is legally responsible to pay for all the other party’s damages, including medical expenses, property repairs, lost wages, and the like.
Oftentimes, a single party can’t be proven to be at fault. In these cases, California operates as a pure comparative negligence jurisdiction, where each party will be held responsible for their fault in the accident. For example, if the court finds you at fault for 20 percent of an accident, you will only be paid $8,000 out of a total $10,000 in damages.
This is in contrast to no-fault states, where all parties use their own car insurance provider to pay for damages, regardless of who is at fault for the accident.
While tort state law does require more time to reach a resolution, it generally results in a fairer outcome for all parties involved.
California Point System
In California, all tickets and accidents are assigned points. Every violation typically counts as one or two points on your record. For example, if you get a ticket for speeding, you will get one point. If you are cited as drinking while driving, you may get two points. Depending on the violation, points stay on your record for 39 months, although more serious cases (such as DUIs or hit-and-runs) will stay on record for 13 years.
“Driving under the influence also includes drugs,” explained Ian Hoey of the California Highway Patrol’s Office of Community Outreach and Media Relations. “You can be arrested for cannabis – including edibles, concentrates, and other products – prescription drugs, and even over the counter drugs if they impair your ability to safely operate a motor vehicle.”
In addition to points, a DUI arrest in California is a major hit to the pocketbook. “The fine for a first-offense DUI along with associated costs can run more than $15,000,” Hoey said.
California’s Distracted Driving Law
California strongly prohibits drivers from using a cellphone while operating a motor vehicle. The state currently has two laws in effect. The first law makes it illegal for drivers of any age to call or text while driving, unless the phone is in hands-free mode. The second law makes it illegal for drivers under the age of 18 to use a phone, even in hands-free mode (except for emergencies).
The base fine for texting and driving is $20, although the actual amount may be more than triple after penalty assessments. The violation currently doesn’t result in a point. However, it does appear on your driving record.
How Do California Car Insurance Rates Compare to Other States?
When it comes to auto insurance rates, California falls somewhere in the middle. According to data from Business Insider, in between the most expensive (Michigan at $3,343) and the most affordable (Vermont at $1,127), the average car insurance rate in California is $1,647. This rate can range between $987 and $1,815.
What makes California’s car insurance so expensive? There are several reasons, but the state’s high population density is one. With millions of people on the road – most driving their own vehicle – there is a greater likelihood for accidents, theft, and vandalism.
What Determines California Car Insurance Rates?
In most states, auto insurance rates are generally based on a number of factors, from where you live to what car you drive.
However, unlike most states, it’s illegal in California for auto insurance rates to be based on gender, zip code, or credit history.
Instead, providers must only consider the following when calculating an individual’s insurance rate:
- Driver’s safety record.
- Total miles driven annually.
- Years of previous driving experience.
- Any other factors that can be proven to have a substantial relationship to the risk of loss.
How Do You Get the Cheapest Auto Insurance in California?
Although driving in certain California cities can be a pain (INRIX found the average annual time spent in traffic is 128 hours in Los Angeles and 116 in San Francisco), the state does offer a few ways to help its drivers get the best California car insurance.
Below are three state-sponsored programs intended to reduce car insurance costs.
California Low Cost Automobile Insurance Program (CLCA)
Residents who have trouble meeting the state minimum for California car insurance coverage may be eligible for the California Low Cost Automobile Insurance Program (CLCA). To qualify for the program, you must meet the income guidelines, own a vehicle valued at a maximum of $25,000, and have a good driving record.
If eligible, you will only be required to meet a lower minimum coverage:
- BI: $10,000 per person.
- BI: $20,000 per accident.
- PD: $3,000 per accident.
Under the CLCA, you can expect to pay an annual premium between $244 and $966, depending on the county.
California Automobile Assigned Risk Plan (CAARP)
Even high-risk drivers can get help from California state programs. In cases where a driver has difficulty finding affordable car insurance due to previous traffic violations or low credit scores, the California Automobile Assigned Risk Plan (CAARP) offers assistance.
The CAARP assigns the high-risk driver to one of their affiliated insurance companies, which agrees to charge reasonable premiums through an installment plan. Then, in a few years when the traffic violations are removed from their record, the driver will be able to secure more affordable auto insurance rates on their own.
Good Driver Discount
California’s Proposition 103 was passed in November 1988 to protect consumers against any unreasonable treatment from insurance companies. This led to lower rates, fair policy premiums, and a sizable 20 percent good driver discount.
To qualify for 20 percent off any California car insurance plan, the driver must meet the following:
- Have had a driver’s license for the past three years.
- Have not had more than one violation in the past three years (insurance providers may count any accident that you had that included more than $500 in damages as a violation).
- Have not been principally at fault in any accident that resulted in injury or death in the past three years.
- Have not been convicted of driving under the influence of alcohol or drugs in the past seven years.
Aside from California’s programs, it’s always best to shop around with reputable providers for the best auto insurance rates. Most insurance companies offer discounts like ones for students, teachers, members of the military, or members of affiliated clubs and companies.
Some providers also offer discounts for specific vehicles, drivers with low mileage – an estimated savings of $81 for every 5,000 fewer miles driven a year, according to Consumer Federal of America – and bundling multiple policies. Look for a provider that offers at least one of these options, as well as reasonable premiums and deductibles.
Who Are The Best Car Insurance Providers in California?
Many great car insurance companies serve California. To find the best price, get at least three quotes. To help you get started, we think these three providers offer great customer service, cheap car insurance plans, and a variety of coverage options.
GEICO: Best Overall
GEICO consistently ranks as one of the most popular and most affordable car insurance providers. The company receives an A++ from AM Best, and AA+ from Standard and Poor’s, along with other notably high ratings. The average GEICO policy in California is $1,352.60, depending on the driver and desired coverage, according to U.S. News & World Report.
Progressive: Best Online Experience
Progressive is a popular provider, not just for cheap car insurance but for its useful online features and handy apps. Customers can use Progressive’s Name Your Price® tool to find a policy that fits their budget or its Snapshot® mobile app to see helpful tips about driving behavior. Progressive provides one of the cheapest car insurance policies in California, with an average policy costing $1,292.14.
Mercury: Best Local Provider
Founded in 1962, Mercury is positioned as one of California’s leading independent providers for automobile insurance. While it has since expanded to other states, California still counts for 80 percent of the company’s revenue. The provider offers all the standard types of coverage, add-ons, and several discounts. Mercury also claims to save drivers an average of $769 as compared to other providers. However, it’s still best for drivers to contact them directly for an actual quote.
California operates under a lot of state-specific car insurance laws, which affects the type of coverage and policy you should carry. To find the best California car insurance, fill out the form below and start learning more about your available options:
Original article: Your Complete Guide to California Car Insurance
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