May 10, 2022

Cheap Car Insurance in California

Can’t afford car insurance? You may be eligible for a low-cost government program.

California has the fourth-highest cost of living after Hawaii; Washington, D.C.; and New York. Groceries in the state cost 12 percent more than the national average, utilities cost 28 percent more, and transportation costs a whopping 37 percent more. 

That said, the state’s average car insurance costs are actually slightly lower than the national average, but many people still find it difficult to set aside enough money for car insurance. If that’s you, keep reading for information on how to get the cheapest car insurance in California.

Cheapest Car Insurance in California

Marital Status

  • Married: Progressive, $1,448 per year

Military

  • Current military personnel: USAA, $483 per year
  • Military veterans: USAA, $483 per year

Coverage

  • Full coverage car insurance: Esurance, $1,055 per year
  • Minimum coverage car insurance: GEICO, $372 per year

 

The Best Car Insurance in California

  • AAA NorCal
  • AAA SoCal
  • Allstate
  • Esurance
  • Farmers
  • GEICO
  • Mercury
  • Progressive
  • State Farm
  • Wawanesa

Ways to Save

  1. Apply for the Low Cost Auto Insurance Program. If you’re eligible, the state could match you with a low-cost liability coverage provider. However, your income must be between $12,909 and $33,975 per person, depending on the size of your household, to qualify. See below for more eligibility requirements.
  2. Get discounts from your provider. For most people, the quickest way to save money on car insurance is to ask your insurance agent for discounts. Look for discounts for enrolling in automatic payment, bundling multiple policies under one provider, or taking a defensive driving course, especially if you have expensive teen drivers.
  3. Get the minimum coverage. You’ll find the absolute lowest prices if you only get minimum coverage. However, if you have a covered claim with more than $45,000 in bodily injuries and/or $5,000 of property damage, you’ll have to pay the other party out of pocket (not to mention your own losses in accidents you caused).
  4. Switch providers. By shopping the entire market, you may be able to find a company that can offer you lower premiums. Don’t be afraid to switch your auto insurance if you’re not happy with your rates.

FYI:

California is one of four states that doesn’t allow car insurance companies to use credit scores to determine pricing.

How Much Coverage Do You Need?

California, with its amazing cities, beautiful beaches, and delicious wine country, is a great place to live. However, with all of these attractions comes a high cost of living.

Category Average rates in California compared to U.S. average
Health 10% higher
Misc. 12% higher
Grocery 12% higher
Utilities 28% higher
Transportation 37% higher
Index 39% higher
Housing 96% higher
Average 33%1 higher

Given that healthcare in California costs 10 percent more than the national average and transportation costs 37 percent more, is a total liability limit of $50,000 sufficient? Our answer is no — the minimum insurance coverage in California is not enough.

We recommend you buy more than the minimum coverage the state requires. Why? First of all, liability coverage only applies to the other party’s bodily injuries and property damages in accidents you caused. You’ll be responsible for your own bodily injuries and property damages, and if you lack personal injury protection (PIP), collision coverage, and comprehensive coverage, you’ll have to pay out of pocket.

In contrast to liability insurance, full coverage insurance will cover both your and the other party’s damages and losses in accidents you caused. We recommend liability limits of up to $500,000, or however much you can afford. If you have a high net worth, buy more coverage to protect yourself from lawsuits. For collision and comprehensive coverage, the limit is your car’s actual market value (AMV) —  what you could get if you sold it tomorrow.

Finally, we recommend adding uninsured/underinsured motorist coverage (UM/UIM) for people who are driving without insurance or driving with insufficient insurance to match your losses. An estimated 17 percent of California drivers lack insurance, which is above the 12 percent national average.2 If someone who lacks insurance hits you, UM would cover your bodily injuries and property damages. The limits should match your liability limits.

Talk to your agent or broker about how much insurance you need, as it’s highly individualized based on your needs, circumstances, and budget.

Alternatives

Self-Insurance

Technically, there is a way to insure your own car. If you have $35,000, either in cash provided to the DMV or as a surety bond to any company licensed to do business in California, you can insure yourself. However, most people won’t be able to self-insure.

DID YOU KNOW?

You need car insurance to register a car in California.

California Automobile Assigned Risk Plan

For high-risk drivers, such as those required to carry an SR-22 certificate, finding insurance can be difficult. That’s why California created the Automobile Assigned Risk Plan, which connects people with insurers who will cover them. You should only use it as a last resort if you can’t find an insurance company that will work with you. If you’re interested, use the below contact information to find out more from the Automobile Insurance Plan Service Office (AIPSO).

  • URL to apply online: https://easi.aipso.com/
  • Mailing address:
    • California Automobile Assigned Risk Plan
    • P.O. Box 6530
    • Providence, RI 02940-6530
  • Phone number: 800-622-0954 (Monday through Friday, 8 a.m. to 4:30 p.m. PT)
  • Email: caarp@aipso.com3

Low Cost Auto Insurance Program

The average cost of car insurance in California was $1,051.79 in 2019, the last time the National Association of Insurance Commissioners published national data.4 Although that cost is 2 percent lower than the national average, car insurance in California is too expensive for many low-income families. Since auto insurance is a requirement in the Golden State, California has a program that provides low-cost car insurance to eligible households under the Low Cost Auto Insurance Program.

To be eligible, you must meet the following criteria:

  • You have a valid California driver’s license.
  • You own a vehicle with a maximum value of $25,000.
  • You either have a good driving record or are a new driver.
  • You are at least 16 years old.
  • You meet the income requirements below.
Number of people in household Maximum income
1 $33,975
2 $45,775
3 $57,575
4 $69,375
5 $81,175
6 $92,975
7 $104,775
8 $116,575
9 $128,375
10 $140,175
11 $151,975
12 $163,775
13 $175,575
14 $187,375
15 $199,175
16 $210,975
17 $222,775
18 $234,575
19 $246,375
20 $258,1755

Here’s how to apply to the program if you meet these requirements:

  1. Gather the required documents. You’ll need the following:
    • Valid driver’s license
    • Current vehicle registration
    • Initial deposit for payment
    • One of the following documents
Program Document required
CalFresh (food stamps) Electronic Benefit Transfer (EBT) card
California LifeLine A utility company LifeLine verification
CalWorks (welfare) Notification letter
Income level Federal or state income tax returns

W-2 form

1099 form

Payroll stub

LIHEAP (low-income home energy assistance) LIHEAP (low-income energy assistance) verification
Medi-Cal / Medicaid Medi-Cal card
Social Security or pension Social Security or pension letter
SSI (aged, blind, disabled) SSI verification
State of California Employment Development Department (EDD) EDD debit card or benefits letter
  1. Apply online. The easiest way to apply is online at https://www.mylowcostauto.com/eligibility-questionnaire.
  2. Make an appointment. Once you get in contact with someone from the California Department of Insurance, they’ll determine if you are eligible. If you are, they’ll find a certified agent near you who can sell you low-cost liability coverage. Search for an agent using your ZIP code at https://www.mylowcostauto.com/find-an-agent.

If you aren’t ready to apply but want to learn more, call, email, or mail the California Department of Insurance at 866-602-8861, crb@insurance.ca.gov, or its mailing address:

  • 300 S. Spring St., South Tower
  • Los Angeles, CA 900136

California DMV Information

  • Mail:
    • Office of the Director
    • Department of Motor Vehicles
    • 2415 First Ave., Mail Station F101
    • Sacramento, CA 95818-2606
  • Phone: 800-777-0122
  • URL: https://www.dmv.ca.gov/portal/

Conclusion

California requires $50,000 worth of liability coverage, whether you’re driving down the Pacific Coast Highway or up to Big Bear Mountain. But that doesn’t mean you have to spend a fortune. To learn more about California car insurance and how to save, keep reading our frequently asked questions below.

Frequently Asked Questions

Is GEICO really the cheapest?

In general, GEICO is one of the cheapest car insurance companies in California, with rates as low as $390 a year. However, other companies might be cheaper for some people, as prices are based on several factors. To find out where you can get the cheapest rate, shop the entire market and disclose personal information such as your driving history, ZIP code, and vehicle.

How much is car insurance per month in California?

Car insurance per month in California costs an average of $87.65, according to the most recent data from the National Association of Insurance Commissioners. That breaks down as $52.31 for liability coverage, $41.27 for collision coverage, and $8.04 for comprehensive coverage.

How much is AAA car insurance a month?

AAA reports its car insurance costs an average $148 per month. However, your exact rate will depend on many factors, such as your policy, car, the area you live in, and your driving record.

How do I get cheap car insurance for a 19-year-old in California?

  1. Compare rates from multiple providers.
  2. Add your 19-year-old to your insurance policy, rather than getting them a separate policy.
  3. Ask your agent about discounts for teen drivers. You may be able to get a discount if your teen takes a driving training class, has good grades, or installs teen driver monitoring in their car.
  4. Get just the minimum coverage.
  5. Bundle multiple policies under the same provider.
  6. Move to a suburb or rural area, as car insurance costs more in urban areas.
  7. Get your teen a car with high crash-test safety ratings.

Citations

  1. Cost of Living Data Series. Missouri Economic Research and Information Center. (2022)
    https://meric.mo.gov/data/cost-living-data-series

  2. One in Eight Drivers Uninsured. Insurance Research Council. (2021, Mar 22).
    https://www.insurance-research.org/sites/default/files/downloads/UM%20NR%20032221.pdf

  3. California Automobile Assigned Risk Plan. California Automobile Assigned Risk Plan. (2022).
    https://www.aipso.com/Plan-Sites/California-ARP

  4. 2018/2019 Auto Insurance Database Report. National Association of Insurance Commissioners. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf

  5. California’s Low Cost Auto Insurance. MyLowCostAuto.com. (2022).
    https://www.mylowcostauto.com/

  6. California’s Low Cost Auto Insurance Program. California Department of Insurance. (2022).
    http://www.insurance.ca.gov/01-consumers/105-type/95-guides/01-auto/lca/index.cfm