How Much is Car Insurance in California?

California attracts many people with its sunny weather and beautiful beaches. However, if you plan to live and drive in the Golden State, you need adequate car insurance—it’s required by state law. But California car insurance premiums are known to be on the pricier side.

With a little research, this doesn’t have to be the case.

If you’re wondering exactly how much car insurance costs in California, you’re in the right place. This article will review the costs of California car insurance, as well as explain the reasons for California’s high rates. Most importantly, you’ll learn how to get the best deal on your car insurance premiums.

Insurance is Required to Register a Car in California

So, do you have to have insurance to register a car in California? Yes, California requires its drivers to have car insurance before they register their vehicle. But why is this car insurance coverage required?

Car insurance is mandatory because driving comes with a certain degree of liability. If you cause an accident, you’re liable for the resulting damages, whether they’re injuries, death, or property damage to another person.

Car insurance proves that you’re financially prepared to deal with the consequences of an accident, and therefore, responsible enough to be a driver.

What is the California Minimum Car Insurance Coverage?

In California, all drivers must purchase the following liability insurance policies to register their vehicles and drive:

• Bodily Injury Liability Coverage – If you cause a car accident that results in injury or death, you are liable for medical bills, lost wages, funeral expenses, and more. However, with bodily injury insurance, these expenses are taken care of by your insurer up to your predetermined limit. All California drivers must have at least $15,000 of bodily injury liability coverage per person and $30,000 of bodily injury liability coverage per accident.
• Property Damage Liability Coverage – If you damage another person’s property during a car accident, you’re liable for the resulting expenses. Property damage liability coverage pays for the damage you inflict on another person’s vehicle, property, or belongings in an accident. Thus, you’ll be able to reimburse them and pay your legal fees without dipping into your savings. California drivers must have at least $5,000 of property damage liability coverage per accident.

As long as you have these insurance policies at the stated amounts, you’re in good standing with California state law. However, these car insurance coverages aren’t very high. If you got into a costly accident, you might still have to use your personal assets to pay in full. Thus, it’s prudent to purchase additional coverage.

Additional California Car Insurance Policies

In California, the following car insurance policies are optional:

• Uninsured or Underinsured Motorist Coverage – Did you know that 15% of California accidents involve an uninsured driver? If you get into one of these accidents, you won’t receive compensation from the at-fault drivers’ insurance company, since they don’t have one. However, if you purchase uninsured or underinsured motorist coverage, your insurer will cover your medical expenses, lost wages, or damaged property expenses.
• Medical Payment Coverage – If you want to make sure your medical bills are covered in the case of an accident, as well as those of your passengers, medical payment coverage accomplishes just that. It won’t matter which driver was to blame for the accident.
• Collision and Comprehensive Coverage – If your car is valuable, purchasing collision coverage and comprehensive coverage is a smart move. These policies insure your vehicle from harm due to collisions, natural disasters, harsh weather, vandalism, theft, falling objects, and much more. This way, you won’t need to pay for expensive repairs out of pocket.

As you can see, purchasing additional car insurance coverage has its benefits. You’ll protect your financial standing and have fewer factors to worry about.

How Much is Car Insurance in California Per Month?

So how much is car insurance per month in California? The average cost of California car insurance is $1,661, or $138 per month.

If you purchase the bare minimum of California car insurance, the average premium is only $574 per year. This breaks down to around $48 per month.

If instead you select a full coverage policy, the average cost is $1,804, which is around $150 per month. Compared to the national average for full coverage, which is $1,548, California’s annual average is 20% higher.

How Much is Car Insurance in California for New Drivers?

Young drivers often have to pay more for car insurance, since they’re considered a riskier demographic. If you’re a young driver with a good driving record, the best car insurance rates out there range between $1,600 and $1,985 per year, depending on your auto insurer.

Why is California Car Insurance So Expensive?

If you’re wondering why California’s rates are so expensive, here are a few reasons:

• California has a high urban population – California is one of the most urbanized states, with large cities like Los Angeles and San Francisco. Urbanized states have more cars on the road, more traffic congestion, and more accidents. Thus, car insurance companies charge more to insulate themselves from this risk.
• Californians experience more vehicle theft – Along with having a high frequency of accidents, California is also the 5th leading state for auto theft, after Alaska, New Mexico, Hawaii, and Oregon. Thus, insurers raise their California rates to account for this risk.
• Californians drive more – Many urbanized states have thriving metro systems. However, California is not one of them. Most California residents drive a car, rather than relying on public transportation. In turn, Californians have a high annual driving mileage. Driving more often increases the frequency of accidents, and insurance premiums rise in response.
• California’s weather causes vehicle damage – Even though California is known for its amazing weather, it still experiences destructive earthquakes and wildfires. As a result, car insurers raise their rates to protect against weather-related damages.

Due to these factors, car insurance will be a bit higher in California than in many other states.

Average Car Insurance Cost California By City

California is a big state. It has 142 cities, all of which vary in traffic congestion, accident frequency, vandalism, and average vehicle value. As a result, the cost of California car insurance depends greatly on which city you live in.

The top five most expensive cities in California for car insurance are:

1. Paramount – $2,373
2. Huntington Beach – $2,257
3. Mission Viejo – $2,241
4. Modesto – $2,221
5. Burlingame – $2,159

The five least expensive cities in California for car insurance are:

1. Fullerton – $1,266
2. Spring Valley – $1,351
3. Fontana – $1,372
4. Newbury Park – $1,374
5. Buena Park – $1,375

Some other notable California city car insurance averages you might be curious about are:

• Sacramento – $1,483
• Los Angeles – $1,624
• San Francisco – $1,783
• San Diego – $2,084

Who Has The Cheapest Car Insurance in California?

As you can see, California car insurance is pricey. If you want cheap car insurance in California, you need to shop around for an auto insurance company that provides competitive rates.

If you have a clean driving record, the cheapest auto insurers on the market are:

1. Geico – $1,341 per year
2. Liberty Mutual – $1,466 per year
3. Wawanesa – $1,477 per year
4. Kemper – $1,557 per year
5. 21st Century – $1,588 per year

What to Know About Car Insurance If You’re Moving to California

If you’re planning to move to California, here are a few things to keep in mind about car insurance:

• You may need to change car insurers – Your current car insurance company may or may not operate in California. If it doesn’t, you’ll have to find a new insurance company. If it does, you must ensure that your current policy is equal to or above California’s minimum car insurance coverage requirements.
• You must register your vehicle within ten days of moving to your California residence – You can’t register your vehicle without proof of insurance, and the timeframe to register your car is tight. Thus, it’s a good idea to arrange your car insurance before you move.
• California car insurance companies can’t use your credit history – It’s illegal for California car insurance companies to consider your credit history when determining your premium. Thus, if you’re coming from a state that used your credit history against you, you could enjoy a better insurance rate in sunny California.

Online Auto Insurance: Find Deals on California Car Insurance Today

While car insurance is a little more expensive in California, it’s worth it to live in such a beautiful state. That said, you don’t have to settle for an inflated rate. By doing your research, you can find a low price on car insurance, no matter which California city you choose to live in.

If you’re ready to explore your car insurance options, use Online Auto Insurance as a resource, see our handy rate comparison tool on the top of this page.

Online Auto Insurance helps you:

• Get fast, free quotes from a plethora of auto insurance providers
• Compare quotes and determine your ideal level of coverage
• Speak with a helpful agent who can guide you in the right direction.

Ready for a great deal on California car insurance? Us too.

Sources:

California Department of Insurance. Automobile Insurance Information Guide.\ http://www.insurance.ca.gov/01-consumers/105-type/95-guides/01-auto/auto101.cfm

ValuePenguin. Uninsured & Underinsured Motorist Coverage Car Insurance.\ https://www.valuepenguin.com/uninsured-underinsured-motorist-coverage-car-insurance

ValuePenguin. Where in California is Car Insurance the Most Expensive?\ https://www.valuepenguin.com/where-california-car-insurance-most-expensive

Nerd Wallet. Best Cheap Car Insurance in California for 2020.\ https://www.nerdwallet.com/blog/insurance/cheapest-car-insurance-in-california-ca/

Iowa State University. Urban Percentage of the Population for States, Historical.\ https://www.icip.iastate.edu/tables/population/urban-pct-states

Statista. Motor vehicle theft rate in the U.S. in 2018, by state.\ https://www.statista.com/statistics/232588/motor-vehicle-theft-rate-in-the-us-by-state/

United States Department of Transportation. Vehicle miles traveled and vehicle trips by State.\ https://www.bts.gov/statistical-products/surveys/vehicle-miles-traveled-and-vehicle-trips-state

ValuePenguin. Where in California is Car Insurance the Most Expensive?\ https://www.valuepenguin.com/where-california-car-insurance-most-expensive

Nerd Wallet. Best Cheap Car Insurance in California for 2020.\ https://www.nerdwallet.com/blog/insurance/cheapest-car-insurance-in-california-ca/