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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.
California is one of four states that doesn’t allow car insurance companies to use credit scores to determine pricing.
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|
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.
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.
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).
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:
|Number of people in household||Maximum income|
Here’s how to apply to the program if you meet these requirements:
|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
|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|
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, firstname.lastname@example.org, or its mailing address:
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.
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.
Car insurance per month in California costs an average of $87, according to the most recent 2020 data from the National Association of Insurance Commissioners. That breaks down as $52 for liability coverage, $42 for collision coverage, and $8 for comprehensive coverage.
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.
Cost of Living Data Series. Missouri Economic Research and Information Center. (2022)
One in Eight Drivers Uninsured. Insurance Research Council. (2021, Mar 22).
California Automobile Assigned Risk Plan. California Automobile Assigned Risk Plan. (2022).
2019/2020 Auto Insurance Database Report. National Association of Insurance Commissioners. (2023, Jan).
California’s Low Cost Auto Insurance. MyLowCostAuto.com. (2022).
California’s Low Cost Auto Insurance Program. California Department of Insurance. (2022).