California Car Insurance

California Car Insurance

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Learn how to buy the best California car insurance policy for your particular situation, what the average car insurance rates are for your neighborhood and how California state insurance and traffic laws work.

 

The average car insurance rate in California is $1,518. Unlike nearly all other states, in California your credit history isn’t allowed to be factored into your car insurance rate, and where you live is considered, but not given as much weight as in other states. California insurance companies primarily factor in your age, your driving record and how many miles you drive when deciding how much you pay. But every company uses its own method for assessing risk. That’s why the cost for the same policy can vary significantly among insurance companies – and why you should compare rates. For example, in Los Angeles ZIP code 90029, the highest rate among six carriers ($3,450) is more than twice as much ($2,014 more) as the lowest ($1,436).

 

Cheap car insurance in California

California car insurance requirements

California laws mandate that you carry minimum liability coverage limits of 15/30/5 on your vehicle. While buying just minimum coverage means you are getting the cheapest car insurance in California, you are only covered for damage you do to other drivers’ cars and for others’ injuries. That means your insurer won’t pay for damage to your car or for your injuries if you cause an accident.

Keep in mind that a minor accident could easily exceed minimum liability coverage limits, leaving you responsible to pay for damages not covered by insurance. For example, if you have $30,000 in bodily injury liability insurance and you cause an accident that costs $50,000, you have to pay $20,000 out-of-pocket. If you don’t have the money on hand, your assets may be taken to cover the costs. California also has one of the lowest property damage liability limits in the country at just $5,000. If you hit a car and it costs more than $5,000 to fix it, you’re on the hook for the rest of the bill.

If you want more protection, it will cost more, but as you’ll see in the chart below, additional coverage is typically affordable. Boosting coverage from the state minimum to higher liability limits costs $101 a year or about $9 a month. Hiking your policy to full coverage with a $500 deductible costs, on average, $1,027 more, or $86 a month.

*The table shows the average annual rate of nearly every ZIP code in California from up to six major insurance companies. Rates are for a male driver, age 40, with a clean record and good credit for a 2016 Honda Accord. Data was provided for CarInsurance.com by Quadrant Information Services.

Recommended car insurance coverage

When deciding how much car insurance to buy, you need to assess your particular situation. To drive legally, you must buy at least the minimum liability insurance required by your state. If you didn’t borrow money from a lender to buy your car and you don’t have a lot of money or assets to protect, that might be a wise choice. If, however, you don’t own your car outright, you will be required to get comprehensive and collision coverage. Additionally, if you have a home and savings to protect, it’s wise to buy more coverage.

Use our How Much Car Insurance Do You Need? tool to get a recommendation.

Liability

The more money and assets you have, the more likely it is that you may be sued following a car accident. Unless you are determined to pay the lowest car insurance rate possible, we recommend you buy higher than minimum liability coverage. If your net worth is:

  • less than $50,000, choose at least 50/100/50
  • between $50,000 and $100,000, choose at least 100/300/100
  • more than $100,000, choose at least 250/500/100

If you’re leasing or financing your car, you automatically need coverage of 100/300/100 or higher.

Collision and comprehensive

Collision coverage pays for damage to your car after an accident that you cause. Comprehensive insurance pays to replace stolen cars and for damages from vandalism, flooding, hail, fire and animal strikes. If your car is:

  • less than 10 years old, you should strongly consider buying collision and comprehensive.
  • more than 10 years old, only buy collision and comprehensive if your car is worth $3,000 or more, if you couldn’t afford to replace your car if it’s wrecked, or if you just want more protection on your policy.

If you buy comp and collision, check our guide to choosing a deductible amount.

Uninsured/underinsured motorist

Uninsured motorist coverage and underinsured motorist coverage pays for damages if you’re hit by a driver with no insurance or a driver with coverage that’s insufficient to pay for your repairs and medical expenses. These should match the liability limits you choose. In most states, including California, these coverages are optional.

Medical coverage (MedPay)

Medical payments coverage can help pay for the medical or funeral expenses of covered drivers and passengers after an accident, regardless of fault, up to $25,000. In most states, including California, it’s an optional addition to your car insurance policy. MedPay does the following:

  • Covers you and your passengers’ medical expenses
  • Pays for expenses after health insurance limits are exceeded
  • Offers additional protection to insured drivers who are hit by a car while walking or biking

If you and your passengers:

  • Don’t have health insurance, or have a plan that doesn’t cover car accidents or has low limits, we recommend that you add medical coverage of at least $5,000 to your car insurance policy.
  • Do have health insurance, it’s still a good idea to have medical coverage if you want the best protection in your policy, as it can pay out after your health benefits are maxed out.

Gap insurance

If you got a loan to pay for your car and have an accident, gap insurance pays the difference between the cash value of your car and the current outstanding balance on your loan or lease.

  • If you’re financing your car, your car is less than one year old and you’ve put less than 20 percent down on it, you should buy gap insurance. If not, you don’t need gap insurance.
  • If you’re leasing your car, it’s a good idea to buy gap insurance if you don’t already have the coverage in your lease agreement.
  • If you own your car outright, you don’t need gap insurance.

California car insurance rates by company

Below you’ll see average annual rates for California, ranked cheapest to most expensive, for three coverage levels:

  • State minimum liability requirements
  • Liability limits of $50,000 per person/$100,000 per accident and $50,000 property damage
  • Liability of $100,000 per person/$300,000 per accident and $100,000 property damage, with comprehensive and collision at $500 deductible

California rates by company and city

Below you’ll see average annual rates for the 10 cities in the state with the largest population. Rates are for coverage of $100,000 per person/$300,000 per accident and $100,000 of property damage coverage, with comprehensive and collision carrying a $500 deductible.

Best car insurance companies in California

Scores are based on Insure.com’s “Best Insurance Companies” customer review survey of 3,700 customers. Companies not in the top 10 of market share do not qualify. All scores are out of 100.

Best customer service:

  1. USAA – 100
  2. Mercury —  94
  3. Auto Club of Southern California – 93.9
  4. State Farm – 92
  5. Allstate – 91.8

Best claims service:

  1. USAA – 100
  2. Auto Club of Southern California – 96.3
  3. Liberty Mutual – 96
  4. Geico –93.9
  5. CSAA Insurance Group – 92.5 Progressive – 92.5

Best value for the price:

  1. Auto Club of Southern California – 95
  2. Mercury – 92.5
  3. CSAA Insurance Group – 91.7
  4. USAA – 91.3
  5. Progressive – 86.3

    Largest car insurance companies in California

    Source: A.M. Best market share rankings are based on direct premiums written in 2015.

    Customer review rankings based on Insure.com’s 2016 “Best Insurance Companies” survey of 3,700 customers. Scores are out of 100.

    Car insurance for cities in California

    Find out what the most expensive and the cheapest car insurance rates are by ZIP code, as well as how they compare statewide.

    Los Angeles car insurance

    San Francisco car insurance

    San Diego car insurance

    California car insurance laws

    Good Driver Discount

    Under Prop 103, drivers who meet these conditions must receive rates at least 20 percent lower than a driver who does not meet these criteria at the same car insurance company:

    • Has been licensed for at least three consecutive years
    • Has no more than one point on his or her driving record

    CAARP: California Automobile Assigned Risk Plan for high-risk drivers

    In California, if you cannot find a car insurance company that will insure you, you can get liability coverage through the California Automobile Assigned Risk Plan (CAARP). This plan is designed for high-risk drivers who are unsuccessful in obtaining insurance from companies that sell non-standard policies.

    The plan works by taking your application and assigning it to an insurance company. All insurance companies licensed in the state must accept CAARP applicants. The number of CAARP assignments is based on insurance company market share. The more policies an insurance company issues, the larger the portion of CAARP assignments it is required to take.

    The rates used by the plan are the same no matter what insurance company issues the policy. The plan also offers installment options. After three years with a clean driving record, you can get out of the CAARP program and buy a standard policy.

    To buy a CAARP policy, you have to work with an agent who is certified by the state to assist in getting drivers these special policies. Start by calling the number below to be paired up with a “certified producer” in your area who will help find an insurer for you. Afterwards, you and your assigned certified producer will work with the insurance company’s agent to get you an appropriate policy.

    To Find a CAARP Certified Producer, call 1-800-622–0954

    Insurance for low-income drivers

    If you are low-income, you may be eligible for the California Low Cost Auto Insurance program, which permits lower liability limits of:

    • Bodily injury liability – $10,000 person / $20,000 per accident
    • Property damage liability – $3,000 per accident

    The low-cost program (rates range from about $241 to $556 a year; discounts are available for those who have had a clean driving record for three years) is available to drivers who meet the following criteria:

    • Have a valid California driver’s license
    • Own a vehicle valued at $25,000 or less
    • Be at least 19 years old and meet income eligibility guidelines

    Income eligibility requirements per household effective February 2016 are:

    • 1 person – $29,700.00
    • 2 people – $40,050.00
    • 3 people – $50,400.00
    • 4 people – $60,750.00
    • 5 people – $71,100.00

    Pure comparative negligence

    California is among the 13 states that have a pure comparative fault rule. States with pure comparative negligence laws let all drivers recover some payment for their damages, even if they are mostly to blame. For example, a driver 70 percent at fault in an accident could make a claim for damages against the other driver’s liability coverage but expect to receive only 30 percent of the claim amount.

    Claims

    You should file a claim promptly after an accident. Your policy should state what is required of you, which may say a reasonable time period or give a specific time-frame in which to make the claim. For instance, you typically must file a stolen car claim within 30 days of the theft.

    California requires an acknowledgment of all claims within 15 days. Under California law, insurance companies are required to accept or deny the claim within 40 days after receiving proof of the claim. If the claim is accepted, payment must be made within 30 days from the date settlement was reached.

    You have up to three years to file a property damage lawsuit.

    Medical claims

    California law requires that you file medical claims within two years of the incident. You have up to two years after the incident to file a personal injury lawsuit.

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