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 $1,433. 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 is ($3,194) is more than twice as much as the lowest ($1,464).
Cheap car insurance in California
California car insurance requirements
State law requires the following coverages:
Minimum bodily injury liability
Minimum property damage liability
California car insurance 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 $188 a year or $16 a month. Hiking your policy to full coverage with a $1,000 deductible costs, on average, $1,545 more, or $129 a month.
Average annual rate
Liability Only – state minimum
Liability Only - 50/100/50 BI/PD
Full Coverage - 100/300/100 BI/PD $1,000 Comp/Collision deductible
Full Coverage - 100/300/100 BI/PD $500 Comp/Collision deductible
Full Coverage - 100/300/100 BI/PD $250 Comp/Collision deductible
*The table shows the average annual rate of 10 ZIP codes in the state from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. 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.
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.
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.
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.
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 car insurance companies in California
Best customer service:
USAA – 100
Mercury -- 94
Auto Club of Southern California – 93.9
State Farm – 92
Allstate – 91.8
Best claims service:
USAA – 100
Auto Club of Southern California – 96.3
Liberty Mutual – 96
CSAA Insurance Group – 92.5 Progressive – 92.5
Best value for the price:
Auto Club of Southern California – 95
Mercury – 92.5
CSAA Insurance Group – 91.7
USAA – 91.3
Progressive – 86.3
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Largest car insurance companies in California
Direct premiums written
Market share %
Overall Customer Review Ranking
State Farm Insurance Group
Farmers Insurance Group
Allstate Insurance Group
Mercury General Group
Auto Club Enterprises Insurance Group
CSAA Insurance Group
Progressive Insurance Group
Liberty Mutual Insurance Companies
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.
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.
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.
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.
To drive legally in California, you must have liability insurance with at least limits of:
15 / 30 / 5
Bodily injury liability limits of $15,000 -- the maximum payout for any one person you injure -- and $30,000, the maximum payout for all injuries in an accident, and property damage liability of $5,000.
HOW MUCH IS CAR INSURANCE IN CALIFORNIA?The average car insurance rate in California is:
$1,433 per year
9th most expensive state in the U.S.
"Tort" Insurance Law
California has a tort insurance system. After a car insurance claim, someone is found responsible for damages and their insurance company must step in. Responsibility for an accident can be evenly split between parties.
DRIVING IN CALIFORNIA
In our independent study of the best and worst states for driving, California was the
2ND WORST STATE
68% percent of roads are in poor or mediocre condition
14.7% of the drivers on the roads are uninsured
7.9 traffic-related deaths per 100,000 population
4.3% of the average annual median household income is spent on car insurance
80 hours of commuter delay per year in Los Angeles, the state's most congested city