Car insurance is more than just a protection payment for your car—there are plenty of moving parts. And when it comes to insuring your car and yourself, you want to make sure you’re getting the most for your money.

According to Bank Rate, the average cost of car insurance in the United States in 2021 is $1,738 per year, or $145 per month. But how much is the average rate in California? How does it compare to other states? How can you make sure you’re not being overcharged for quality insurance?

In this article, we’ll cover the average price of car insurance in California, as well as low-income auto insurance, rideshare insurance, and how different elements of your history can affect these premiums.

What is a Premium?

Investopedia defines a premium as the amount of money an individual or business pays for an insurance policy, aka your insurance rate. Premiums exist in all types of insurance policies, including healthcare, home, life, and auto. Insurance premiums can be paid upfront or in installments depending on the car insurance policy, not including taxes or service fees.

Average Car Insurance Rate in California

Average full car insurance coverage costs around $1,738 per year in the USA, but premiums can vary significantly from state to state. Maine is the state with the lowest auto insurance, whose full-coverage premiums range from $780 to $831. Florida and New York are on the other end of the spectrum, charging anywhere from $2,205 to $2,587 for full auto insurance coverage in 2021.

How much is car insurance in California? California is on the higher end of state insurance rates. With average car insurance California ranging from $1,974 to $2,012, customers will pay about $165 per month for full auto insurance coverage. Why is California car insurance so expensive?

Why Does Car Insurance Vary so Much Between States?

Car insurance pricing has everything to do with potential liability. This means insurance companies decide their pricing based on the probability that each individual subscribing to their insurance will file a claim.

  • In smaller states, like Maine or New Hampshire, insurance rates top out at around $1099 a year, are small in size. These city centers are less busy and their populations smaller. Statistically, that means fewer claims and cheaper insurance.

  • On the other side of the insurance spectrum, bigger states like New York and Florida may have millions of drivers on the road at a time. Most cars on the road are navigating dense city centers, which increases the risk of accidents, tickets, theft, and other mishaps, thus needing liability coverage.

  • The likelihood of weather-related incidents in a geographical area can also impact insurance rates. For example, states like New York and Florida have to contend with floods, hurricanes, and heavy winters—this means a higher probability of accidents and, thus, insurance claims.

California is one of these larger states, with many cities packed to the brim with cars and people. Whether you’re driving through downtown Los Angeles, traveling on the weaving highways that cover the state, or navigating a hilly city like San Francisco, it’s important to have full car insurance coverage.

What Factors Affect Premiums?

A variety of factors can affect the price of your premium beyond the state you live in. Below, we’ll dive into each factor and what fluctuations to expect when shopping for car insurance based on your personal information.

  • Driving record – If you want to keep your premiums low, drive carefully; a clean record means a lower car insurance rate in California. Have you had to pay a texting and driving California fine? Frequent fender benders? Accidents, tickets, and other driving violations drive your insurance price up. You’ll also typically pay a higher premium if you’re a new driver without a track record based around insurance.

  • Annual mileage – Are you commuting to work every day? Do you often make long-distance drives for your profession? Then you can expect your insurance rate to be higher. More time on the road means you’re more accident-prone. In comparison, rates are lower for someone who uses their car solely for grocery runs or the occasional trip.

  • Car model – What’s more expensive to insure: a new luxury car or an older vehicle that needs frequent repairs? Surprisingly, both of these options can be costly. Insurance cost is determined by how much the vehicle was originally worth, as well as the risks associated with driving it. Other variables may include engine size, car safety record, and the likelihood of theft. If your car has special safety equipment, on the other hand, it may encourage discounts in some companies.

  • Age – Generally, car insurance rates are higher for young adults than for mature drivers. Statistics from the CDC say that the risk of motor vehicle crashes is higher among teens aged 16–19 than among any other age group. So to cushion against the statistical probability of accidents, the younger you are, the higher the rate. On the converse, plenty of insurers offer discounts for senior drivers.

  • Location – Where you live has a lot to do with how much you get charged for your premium. Again, this has to do with statistical risk. Accidents, theft, and vandalism are more common in cities than in rural areas, so premiums are higher when you live in an urban area. Premiums can even vary depending on the area of the city you live in, or if you park your car on the street vs. a car garage.

  • Gender – Women typically pay less for auto insurance than men. The numbers reveal women tend to get into fewer accidents and fewer DUI instances. So, less statistical risk means a lower insurance rate.

  • Credit score – An insurance company usually considers credit history to create a “credit-based insurance score” before offering coverage. This is a way of predicting how likely a potential customer is to file insurance claims that may cost the company money. \ \ Luckily, the state of California (as well as Hawaii, Massachusetts, and Michigan) does not allow the use of credit information when deciding your auto insurance rate. So if you’re a California driver, your credit score won’t affect your rate.

  • Coverage amount – When buying insurance, how much you pay differs depending on how much and what types of coverage you need. Below are some common—and required—forms of insurance you can expect to pay for when shopping to insure your car.

  • Liability insurance – The basic legal requirement for most states. This type of insurance covers accident and bodily injury costs and legal representation if required.

  • Personal Injury Protection (PIP) Insurance – PIP insurance, also known as “no-fault, ” extends to yourself and your passengers in case of bodily injury, no matter who caused the accident.

  • Uninsured/Underinsured Motorist Insurance (UMI) – Uninsured motorist insurance covers damage costs incurred if you get into an accident with an uninsured driver. That way, you’re still protected, even if the other uninsured driver cannot compensate you for damages.

  • Collision Insurance – Totalling your car is every driver’s worst nightmare. But with collision coverage, your insurance provider will pay back the amount of money the car was worth, as well as cover repairs or other damages. It’s especially beneficial for newer or more expensive cars.

  • Comprehensive Insurance – As the name suggests, comprehensive insurance covers everything: collision, weather, animal damage, vandalism, and more.

Rideshare Insurance California

What if you use your car as a rideshare service and source of income, like Uber and Lyft employees? How does that change car insurance rates in California?

Rideshare providers are also known as Transportation Network Carriers or TNCs. In California, state law requires extra insurance coverage whenever a TNC is behind the wheel. \ \ While Uber and Lyft cover some insurance costs. However, “Period 1”—or the time spent driving when you have the app on, but have not yet reached the passenger you are matched with—is uncovered. This lack of coverage can rack up to $100,000 in total injury per accident.

If you’re using rideshare as a source of income, make sure you get rideshare endorsement as part of your car insurance policy. This will help you avoid astronomical charges in the case of an accident that are otherwise not covered by personal or app-provided insurance.

Low Income Insurance, California

If California car insurance rates seem out of your price range, don’t worry—there are options to help you achieve an affordable car insurance premium. California law requires you to have auto insurance while behind the wheel. Don’t skip out or you could be subject to:

  • Suspension of your vehicle registration

  • Suspension of your license

  • Having your car impounded.

  • Fines

To avoid penalties like these, take steps to research California’s Low Cost Automobile Insurance policies that satisfy the state’s liability insurance requirement. You may be qualified for a low-cost insurance policy if you meet the following:

  • Have a valid California driver's license

  • Own a vehicle that is valued at $25,000 or less

  • Meet income eligibility requirements

  • Are at least 16 years of age

If you want to learn more about California car insurance requirements, it’s worth researching the state-sponsored California Low-Cost Automobile (CLCA) Insurance program.

Finding the Best Insurance Rates in California

If you are looking for California minimum car insurance, but you don’t meet low income auto insurance California eligibility requirements for the CLCA program, your best bet to find who has the cheapest car insurance in California is with OnlineAutoInsurance.com.

We find the lowest rates for your needs without sacrificing quality coverage. It’s fast, free, and best of all, accessible at the click of a button. We’ll compare personalized car insurance quote options from leading providers in your location, so you can find the discounts you qualify for, quit inflated premiums, and enjoy the cheapest insurance rates on the web with the insurance provider that works with your needs.

Sources:

Insurance Information Institute. What determines the price of an auto insurance policy? \ https://www.iii.org/article/what-determines-price-my-auto-insurance-policy

CDC. Teen Drivers: Get the Facts. https://www.cdc.gov/transportationsafety/teen_drivers/teendrivers_factsheet.html#:\~:text=The%20risk%20of%20motor%20vehicle,be%20in%20a%20fatal%20crash.

Investopedia. Insurance Premium. https://www.investopedia.com/terms/i/insurance-premium.asp

Bankrate. Average Cost of Car Insurance 2021. https://www.bankrate.com/insurance/car/average-cost-of-car-insurance/

Aceable. What is the Average Cost of Car Insurance in California? https://www.aceable.com/blog/average-cost-of-car-insurance-california/

Coverage. Car insurance rates by state for 2021. https://www.coverage.com/insurance/auto/states/