California car insurance: Everything you need to know

Since no two insurers price policies the same way, shoppers searching for the cheapest car insurance in California will need to compare personalized rate quotes from a variety of companies. And shoppers can do this in the most efficient manner by completing our quote comparison form. All you need to do is provide your zip code, and answer a few quick questions without having to provide any personal information. After completing the form, rates are provided from a handful of reputable California auto insurance companies.

California has some of the highest car insurance premiums in the nation, with an average yearly cost of close to $2,000. Finding good, affordable coverage can be done, but it will take some thoughtful browsing.

Compare CA car insurance quotes to find cheap rates

There are 19 different factors - such as driving record, marital status, zip code, and a car's make and model - that insurers in the state are allowed to take into account when setting rates. No two insurers weigh those factors identically, so conducting a CA auto insurance comparison showing prices for multiple companies is the only way to get a full picture of a driver's coverage options and to find the cheapest rates.

Of course, you’ll want to do more than find the cheapest policy and sign up. A policy from one company might be a few dollars cheaper than another, but the cost might be much greater than it seems. Comparing rates takes a little background knowledge of what you need, and a lot of care put into what’s most important to you.

CA coverage requirements

California car insurance laws require drivers to have the following liability coverages:

  • $15,000 Bodily Injury Liability (coverage per person)

  • $30,000 Bodily Injury Liability (coverage per accident)

  • $5,000 Property Damage Liability (coverage per accident)

But this coverage - commonly abbreviated as 15/30/5 - is only the minimum amount of protection that policies in the state must provide.

Those numbers might seem low, and if you’re comparing them to other states, you’re right. California has some of the lowest requirements for minimum coverage in the United States, nearly half that of many states. California does not require uninsured motorist coverage to meet the minimum liability requirements. California law dictates you must be a full-time resident or prove that your vehicle is parked there principally in order to ensure it through a California insurance agency. The only exception is for active-duty military members.

If you still owe money on your car, the minimum coverage isn’t going to cut it for your lienholder. Any change in your policy will be reported to the company who owns your title, and if it isn’t adequate they could repossess your car for breaching your contract. Once you’ve made the final payment, though, the choice to go down to minimum coverage is entirely yours.

Choosing the best car insurance in California

Drivers may want to buy an insurance policy with coverage limits that exceed the minimum limits of liability coverage. In serious accidents, the medical bills per person can easily exceed $15,000 and property damage costs can easily total more than $5,000. The best CA auto insurance is one that adequately protects the insured from liabilities for significant damage and bodily injury that is worse than average. The Insurance Information Institute says that in 2009, the average bodily injury claim was about $13,500, and the average property damage claim was about $2,900.

Note that liability policies pay only for other parties' damages that are caused by the policyholder. They will not provide compensation for the policyholder's own damages. When getting California car insurance quotes, drivers may also want to factor in other ways to protect themselves. Comprehensive coverage to protect from damage that could be caused by wildfires or vandalism, or even the theft of your vehicle. Collision coverage would cover damage to your vehicle in an accident, and Med Pay and uninsured/underinsured motorist coverage can be there for you in cases where you’d otherwise be left to your own devices.

Other considerations when choosing an insurance policy are the size of the deductible. If you’re unable to meet a big deductible, then you'll need to find a policy with a low deductible that’s a suit you. Something else to consider is how your car insurance will help you in the event of an accident. If you miss work because of an injury from an underinsured motorist, the right policy can even cover your lost wages.

Why purchase California car insurance?

There are between 450,000 and 500,000 accidents reported annually in the Golden State, according to the California Highway Patrol. Approximately 60 percent of those are property-damage only, while the remaining 40 percent result in injuries and, in some cases, fatalities.

At that rate, licensed drivers in the state have greater than a 1-in-25 chance of getting into an accident over the course of a year. This fact, along with the state's financial responsibility laws, makes choosing to buy auto insurance in California a sensible financial decision.

California is an at-fault state, so if the officer on the scene or the insurance investigators find you responsible for the accident, you have to pay the damages in full, whether or not your insurance covers all of it. And in the case of a hit-and-run, you won’t have another driver’s insurance to cover any damages to your vehicle or injuries you or your passengers sustain.

There are also legal penalties for not having a policy. Motorists driving without proof of insurance may be fined hundreds of dollars, according to the state vehicle code. Vehicles may also be impounded if they turn out to be uninsured. And, of course, uninsured drivers who cause accidents may have to pay out of pocket for the damages they cause. In these instances, the driver will likely need to get an SR-22 insurance policy, in addition to their required minimum liability insurance, to keep their license and registration active. For most insurance companies, this means higher premiums.

What about surety bonds?

California is one of the states that allow a surety bond in lieu of an insurance policy. If you are unable to obtain insurance, a surety bond of $35,000 or more will keep you legal to drive in California. You can accomplish the same thing with a cash deposit of $35,000 at the DMV, but most of us don’t have that kind of money lying around (and if you do, it’s better invested elsewhere!).

Surety bonds don’t require a monthly payment. Instead, you put a certain percentage of the bond down, depending on the company and your credit score, and then you are covered up to that amount if you get into an accident. Unlike insurance, however, you are required to pay back the full amount as soon as you can.

That might sound nice if you never plan on getting into a car accident. But if the damages from an incident exceed the amount of the surety bond, you will have to come up with a way to cover the rest of the money out of pocket, as well as repay the surety bond in full as soon as you are able. If you’re properly covered, insurance will never leave you in debt, where a surety bond could leave you high and dry in accidents with serious bodily injury and property damage. An insurance policy will pay out the coverage without putting you in serious debt.

How can I save money?

Not everyone can afford auto insurance for their vehicle, but California’s low-cost automobile insurance program was established in 1999 low-income families. To qualify, you must have a good driving record, drive a vehicle worth less than $25,000, and meet the income eligibility guidelines. You must also be at least 16 years old and have an up to date driver’s license.

If you’re looking for the best value, there are a few ways to keep your insurance premiums down. By avoiding speeding tickets and car accidents you can maintain a clean driving record. In California, most incidents stay on your record for three years, but the more serious ones can hang around for longer. If you get a DUI, it can affect your premium for a decade. The less risk there is in covering you, the easier it is to find a cheap car insurance quote. Discounts are usually offered when you roll in other policies, like renter or homeowners insurance. A lot of companies will offer discounts for low mileage drivers or drivers who demonstrate safe practices using a tracking device in their car.

If you are having trouble getting coverage because of a high number of accidents or multiple DUIs, you might qualify for an alternative insurance program. The California Automobile Assigned Risk Plan will connect you with an insurance company that can provide you the coverage you need to get you to and from work.

The Bottom Line

Different auto policies cater to different drivers. USAA offers a great discount for people in the military and their families. Esurance has excellent rates for safe drivers. Even if you already have an insurance policy that you’re happy with, it doesn’t hurt to see what other companies have to offer. If you find out your insurance company is overcharging you, there’s no reason to be loyal. Search our site for the lowest available quotes and start saving today!