Car insurance is required in most states, and California is no exception. Compared to many other states, California’s car insurance premiums are on the pricey side. In fact, California is the 7th most expensive state to register a car in. These premiums have been on the rise for many years. Since 2011, the average insurance rates have increased by a whopping 43%!

So why is car insurance so expensive in California? Keep reading to find out.

How Much is Car Insurance in California?

The average annual car insurance premium in California is $1,661. This is around 20% higher than the national average.

However, your premiums depend on how much coverage you purchase. A full-coverage policy costs $1,804 on average. Conversely, if you only get the California minimum amount of car insurance required by law, the average premium is only $574 per year.

California Minimum Car Insurance

If you’re wondering, “do you have to have insurance to register a car in California?” the answer is yes. You must have the following policies:

  • $15,000 of bodily injury liability coverage per person

  • $30,000 of bodily injury liability coverage per accident

  • $5,000 of property damage liability coverage per accident

While these liability policies are all you need legally, many California residents purchase more coverage to protect themselves from costly accidents. You can insulate yourself financially by adding these optional policies:

  • Uninsured or Underinsured Motorist Coverage

  • Collision and Comprehensive Coverage

  • Medical Payments Coverage

Average California Car Insurance Cost By City

California is a big state. It spans over 900 miles North to South, encompassing 142 cities. Depending on which city you look at, the average car insurance premiums differ significantly.

Here are a few California cities’ annual average car insurance rates to give you an idea:

  • Paramount – $2,373

  • Huntington Beach – $2,257

  • Mission Viejo – $2,241

  • Burlingame – $2,159

  • San Diego – $2,084

  • San Francisco – $1,783

  • Los Angeles – $1,624

  • Sacramento – $1,483

  • Spring Valley – $1,351

  • Fontana – $1,372

  • Newbury Park – $1,374

  • Fullerton – $1,266

As you can see, there’s a wide range of car insurance prices, depending on which California city you live in. Each city has its own unique risks, such as traffic levels, vandalism rates, and average vehicle values. In turn, car insurers adjust their prices accordingly. For more information, see our guide on How Much is Car Insurance in California.

Why is California Car Insurance so Expensive?

There’s no doubt that California car insurance is costly. But why is car insurance so expensive? Here are the leading reasons for California’s high car insurance premiums:

  • A large population With a population of nearly 40 million residents, California is a highly-populated state. It has more cars on the road than any other state in the nation, with over 15 million registered vehicles. With so many drivers, accidents are bound to happen at a higher frequency. Car insurers know this, so they increase California premiums as a result.

  • High urbanization – Compared to many other states, California is particularly urban. It has a multitude of large cities and sprawling suburbs. Due to its urbanization, it experiences more traffic congestion, vandalism, and car accidents. Not to mention, California has the 5th highest amount of auto theft in the nation. Car insurers raise their rates to account for this increased risk.

  • Minimal use of public transportation Compared to residents of other states, Californians drive a lot. Only 5.3% of Californians use public transportation for their daily commute. The more you drive, the more likely it is you’ll get into an accident. Thus, car insurance companies charge more for customers that rack up high mileage.

  • Natural disasters – Even though California has wonderful weather, it still faces destructive earthquakes and wildfires from time to time. These natural disasters can wreak havoc on California’s vehicles and cause more accidents. In turn, California car insurers raise their rates.

  • Uninsured drivers – Roughly 15% of California drivers don’t have any car insurance at all. When these drivers get into an accident, they’re unable to take financial responsibility for the resulting damages. Insurance companies account for this risk by increasing their rates.

In addition to these state-specific factors, car insurance premiums are rising nationwide due to:

  • More distracted driving – These days, people have a hard time staying off their smartphone, even when they’re on the road. The rise of texting and driving has increased accidents across the country. Thus, insurance companies get more accident claims than they used to and have raised premiums as a result.

  • More expensive vehicle repairs – Modern cars have more bells and whistles than they did a few decades ago. Due to fancy navigation systems and specialized stereo systems, cars are costlier to repair these days. This increased burden on car insurance companies is accounted for in their higher premiums.

With more accident claims and costlier car repairs, it’s natural that car insurance companies have raised their rates. They need to charge more in order to stay afloat.

What Can California Drivers Do To Lower Their Car Insurance Rates?

While many external factors contribute to your car insurance premium, there are still plenty of steps you can take to lower your rate. Location is just one element that car insurance companies consider when setting your annual premium.

Here are a few ways to get a lower car insurance rate:

#1 Take Advantage of Discounts

Most car insurance companies offer discounts. You’re probably eligible for a few of them already. If not, you can qualify for some by making a few adjustments to your driving habits. Ask your car insurance provider about:

  • Multi-car discounts – By bundling your car insurance with family, you can easily bring down your rates.

  • Senior discounts – If you’ve recently entered the golden years, make sure you’re getting the discounted rate you deserve.

  • Safe driver discounts – Take a defensive driving course to prove you're committed to safe driving and to brush up on your skills. You’ll be rewarded with a discount.

  • Good student discounts – If your teen has a B grade average or above, you can realize significant car insurance savings.

  • Anti-theft device discounts – By installing anti-theft devices in your car, you decrease your risk of vandalism and theft. In turn, you’ll pay less on your premiums.

If you combine a few of these discounts, you’ll quickly compound your car insurance savings.

#2 Drive Less Often

While driving is necessary for Californians’ lifestyles, there are many ways to cut back on your annual mileage. By dropping to a lower annual mileage bracket, you’ll save a considerable amount on your car insurance premium.

To cut back on your mileage, try combining a few of these strategies:

#3 Become a Safer Driver

One of the best ways to keep your car insurance premium low is to be a safe driver. Even if you’ve had some accidents in the past, it’s never too late to improve your driving record.

To build a reputation as a safe driver, focus on the following:

  • Adhere to the speed limit.

  • Never text and drive.

  • Never drive under the influence.

  • Take a defensive driving class.

  • Drive extra carefully when it’s raining.

By avoiding accidents through cautious driving, you’ll enjoy many car insurance discounts and set yourself up to receive lower rates.

#4 Shop Around to Find a Cheap Car Insurance Policy

Who has the cheapest car insurance in California? Based on a few scenarios, these are the cheapest California car insurers, along with their average annual rates:

  • If you have a clean driving record: Geico – $1,341

  • If you’ve received a speeding ticket: CSAA – $2,009

  • If you have a DUI: Infinity – $2,558

  • If you’re married: Geico – $1,724

  • If you have a teenage driver in the family: Wawanesa – $3,223

  • If you only want the minimum coverage: Geico – $437

Even though some car insurers boast low average rates, your final premium is based on a plethora of personal factors, such as your driving history, family situation, age, and preferred level of coverage. Thus, the cheapest insurer for California car insurance will differ for everyone.

The best way to score a great rate on auto insurance is to do your research. Get customized quotes from a variety of insurers. Then choose the one that matches your goals. By shopping around, you’ll feel confident that you got the best deal out there.

Online Auto Insurance: Find The Best Rate On California Car Insurance Today

Now you know why California car insurance is so expensive and what you can do to score an affordable rate. If you’re ready to start your research process, begin with Online Auto Insurance’s car insurance rate comparison above.

Online Auto Insurance lets you get free quotes from California car insurers in minutes. Once you’ve received your quotes, you can compare offerings and decide on the one that’s best for you.

If you want additional assistance during your search, don’t hesitate to consult with one of Online Auto Insurance’s live agents. They’ll help you get the best deal.


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