Cheap Car Insurance Companies In California

The average semiannual cost of car insurance in the state of California is $921.80. An insured premiums are influenced by more variables than purely their place of residence. Car insurance underwriters calculate auto insurance rates after assessing a range of criteria such as the policyholder’s age, driving record, marital status, and credit rating. We examined typical car insurance costs in California across each of the predominant rating factors. We aim to provide consumers insight to identify a car insurance policy that meets their needs and budget.

*Data Methodology – Updated 3/2/2024

The California car insurance rates are based on a 35-year-old male with the most popular car (Honda Accord) living in CA. The Quote is for full coverage with comprehensive at $500 deductible and collision at $500 deductible.

California Minimum Liability Coverage

California requires all drivers to carry a minimum level of car insurance coverage. This coverage includes:

• Bodily Injury Liability – $15,000 per person and $30,000 per accident. This covers injuries to others caused by your vehicle, up to these limits.
• Property Damage Liability – $5,000. This covers damage to others’ property, such as other vehicles, up to this limit.
• Medical Payments – $5,000 per person. This optional coverage pays for medical expenses of others injured in an accident with your vehicle, regardless of fault.
• Uninsured/Underinsured Motorist – $15,000 per person and $30,000 per accident. This optional coverage protects you if you are injured in an accident caused by an uninsured or underinsured driver.
• Collision – This optional coverage pays to repair damage to your own vehicle from an accident, regardless of fault. Deductibles typically range from $250 to $1,000.
• Comprehensive – This optional coverage pays to repair damage to your vehicle from events other than a collision, such as theft, fire, vandalism, or falling objects. Deductibles apply as with collision coverage.

Penalties for Driving Without Insurance in California

Driving without auto insurance in California is illegal and carries heavy penalties. The California Vehicle Code requires that all drivers have liability insurance coverage at all times. Drivers caught operating a vehicle without insurance face both criminal and civil penalties.

The primary penalty for driving without insurance in California is a misdemeanor charge punishable by up to six months in jail and up to $1,000 in fines. Additionally, the California Department of Motor Vehicles (DMV) will impose administrative penalties on uninsured drivers, including a 2-year driver’s license suspension.

The DMV also requires drivers to prove they have purchased auto insurance before their driving privileges can be reinstated. To reinstate a suspended license, drivers must provide proof of current insurance and pay a $125 restoration fee. The DMV may also require drivers to complete an approved driving safety course.

Uninsured drivers caught by law enforcement will have their vehicle registration suspended for one year. To reinstate vehicle registration, drivers must provide proof of insurance and pay a $25 fee.

Drivers caught driving without insurance may also face higher insurance premiums in the future. Insurance companies often consider violations like driving without coverage as part of their underwriting and pricing decisions. This can lead to higher auto insurance rates for up to three years after an incident.

Auto Insurance Rates in California

Auto insurance rates in California are among the highest in the nation due to a number of factors. California has a very litigious culture, meaning residents are more likely to sue over accidents and injuries. This drives up insurance costs to cover legal claims and settlements.

California also has some of the most stringent insurance regulations in the country. Insurers must comply with numerous mandates regarding what coverages they must offer and at what rates. While well-intentioned, these regulations ultimately increase costs that are passed on to consumers.

Traffic congestion is another significant contributor. California has some of the most crowded roadways in the U.S. This means more accidents that require insurance payouts. The state also has a high rate of auto theft, which increases claims for comprehensive coverage.

Other factors include the higher costs of repairs and medical care in California compared to most other states. Insurers pay higher prices to auto body shops and medical providers, so they charge higher premiums to offset those expenses.

Insurers also consider the demographics and credit histories of California drivers when setting rates. Younger and lower-income drivers tend to have higher rates of accidents, injuries, and insurance claims. This leads to higher premiums for those groups.

Low Cost Car Insurance Programs and Discounts in California

Car insurance rates in California can be high, but there are steps you can take to lower your premiums. From government assistance programs to insurance company discounts, there are several options available to help make car insurance more affordable.

For those with low incomes, California offers the Low Income Auto Insurance Program (LIAIP). This state-sponsored program provides affordable car insurance coverage to eligible applicants. To qualify, your household income must be at or below 200% of the federal poverty level. LIAIP offers minimum liability coverage as well as uninsured and underinsured motorist coverage. Premiums are based on your income and range from $36 to $192 per year.

In addition to government programs, car insurance companies offer various discounts that can save you money on your premiums. Common discounts include:

• Multi-car discounts: If you insure more than one vehicle with the same company, you can often get a discount of up to 25%.
• Good student discounts: Students with a B average or higher may qualify for a discount of up to 20%.
• Anti-theft devices: Having an anti-theft device like an alarm or immobilizer can earn you a 5% to 10% discount.
• Online quotes and paperless billing: Obtaining quotes and managing your policy online rather than through an agent, as well as opting for paperless billing, can save you around 5%.
• Mileage discounts: Driving fewer annual miles may qualify you for a discount.

California Car Insurance Statistics

California has some of the highest car insurance rates in the nation. Several factors contribute to these elevated rates:

Traffic: California has some of the worst traffic in the country, especially in major metro areas like Los Angeles and San Francisco. This leads to higher accident rates and insurance claims, raising premium costs.

Theft: Car theft is common in California, particularly in large cities. Stolen vehicles result in comprehensive insurance claims, pushing up insurance costs for all drivers.

Weather: California experiences many extreme weather events like wildfires, floods, earthquakes and landslides. These natural disasters can damage vehicles and roads, resulting in higher insurance payouts.

Litigation: California is known as a litigious state where injured parties often file lawsuits. The high likelihood of litigation means insurance companies pay out more in claims, raising premiums for consumers.

Regulations: California has some of the strictest insurance regulations in the U.S., requiring insurers to cover certain risks and claims. While this provides benefits for consumers, it also increases the cost of doing business for insurance companies.

Demographics: Younger drivers and lower-income drivers tend to file more insurance claims on average. California has a high percentage of both high-risk groups, contributing to higher premium costs.

The 10 Largest California Car Insurance Companies

California has one of the largest auto insurance markets in the country due to its large population and high number of registered vehicles. Many insurance providers operate in the state, but the following 10 companies make up the bulk of the California auto insurance market.

1. State Farm – State Farm is the largest auto insurance provider in California, insuring over 3 million vehicles and holding a 23.2% market share. The company is known for competitive rates and a wide range of coverage options.
2. Farmers Insurance – Farmers Insurance is the second largest auto insurance provider in California, insuring over 2 million vehicles and holding a 15.8% market share. The company offers many discounts and has a strong network of agents across the state.
3. Progressive – Progressive insures over 1.7 million vehicles in California, giving it a 12.8% market share. The company is known for its simple online quoting and purchasing process.
4. AAA – AAA, formally known as the Automobile Club of Southern California, insures over 1.2 million vehicles and holds a 9.2% market share. The company offers many discounts for AAA members.
5. Allstate – Allstate insures over 1 million vehicles in California, representing a 7.6% market share. The company provides coverage through both agents and online.
6. Mercury Insurance – Mercury Insurance is a California-based insurer with over 1 million insured vehicles and a 7.4% market share. The company focuses primarily on the California auto insurance market.
7. CSAA – CSAA, also known as AAA Northern California, Nevada & Utah, insures over 800,000 vehicles and holds a 6% market share. The company offers many of the same benefits as AAA.
8. Nationwide – Nationwide insures over 500,000 vehicles in California, representing about a 3.7% market share. The company offers coverage through a mix of agents and online.
9. Liberty Mutual – Liberty Mutual insures over 400,000 vehicles in California, holding around a 3% market share. The company provides coverage through both agents and online.
10. USAA – USAA insures over 300,000 vehicles in California, representing a 2.2% market share. The company only serves active military members, veterans, and their families.