Comparing policies is more than simply looking at price tags, too. It’s important to look at customer satisfaction ratings, coverage limits, and deductibles when choosing the company that will protect you as a California driver.
In this article, we are going to take you through everything you need to know about acquiring an auto insurance policy in the state of California. We will talk about what the law requires you to hold in the form of policy coverage, as well as the factors that will impact your premiums, the companies that are most likely to serve you best, and the impacts of driving with little or no coverage.
By the end of this article, you should not only have an excellent idea of exactly what you need from your next auto insurance company but where to look when you’re ready to buy.
Compare Car Insurance Plans in California
Our Top Five Picks for the Best Car Insurance in California
If you’re looking for auto insurance in the Golden State, you have a number of options. Keep in mind that your rates will vary depending on the coverage you choose, your personal driving record, and even your location.
Based on our research and consumer ratings, here are our top picks for your next auto insurance policy:
- Best Customer Service: Mercury
- Lowest Premiums: Mercury
- Great If You Have a Perfect Record: AAA
- Best If You Have a Less-Than-Perfect Record: Mid-Century (Farmers)
California Auto Insurance Requirements
Here is a look at your legal requirements for minimum auto insurance coverage in the state of California. These include both bodily injury and property damage liability coverage.
Bodily injury liability coverage pays for any injuries that you may cause to someone else. Keep in mind that if multiple people are injured, your total bodily injury coverage will be split between the parties.
Property damage liability coverage pays for any damage caused to someone else’s property, for which you are responsible. This may include other vehicles, structures/buildings, or objects.
You’re welcome to choose a policy that provides additional coverage, of course, but these are the minimum amounts of liability coverage that you are required to hold in order to drive in the state.
|Bodily Damage Liability|
|Death or injury of one person in any one accident||$15,000 minimum|
|Death or injury of 2+ people in any one accident||$30,000 minimum|
|Property Damage Liability||$5,000 minimum|
California also allows drivers to self-insure, if they’d rather bypass a liability insurance policy through another company.
In order to self-insure as a driver in California, you’ll need to prove financial responsibility to the state. You’ll receive a self-insurance certificate issued from the DMV, which usually requires a $35,000 cash deposit. You can also obtain a surety bond for the same amount, from a company licensed to do business in the state.
To learn more about self-insuring in California, contact the state DMV’s Financial Responsibility Unit.
If you do not hold at least a liability coverage policy, you are unable to register your vehicle in California. You are also considered “uninsured” and, as such, are unable to legally drive a motor vehicle in the state.
If you get pulled over and cannot present proof of valid liability coverage when asked, you’ll be ticketed for being an uninsured driver. The fine for this ranges from $100-200 for the first offense, plus court costs. Subsequent offenses bring with them penalties between $200-500 each, plus court costs.
If you don’t actually have coverage that meets the state’s required minimums, there’s also a possibility of your vehicle being impounded and your driver’s license suspended. This is in addition to the fines for being unable to produce valid proof upon request.
If you get in an accident and aren’t carrying the minimum liability insurance–regardless of whether the wreck is your fault or the other driver’s–you’re looking at some pretty serious consequences. Keep in mind that these are in addition to being responsible for the cost of any damages and injuries for which you’re at fault (which could financially ruin you, were you to be sued for your assets!).
First off, if you’re in an accident and are uninsured/underinsured at the time, your license is likely to be suspended. This penalty could last for up to four years. In some cases, you can have it reinstated after 12 months by acquiring valid auto insurance and paying a license reinstatement fee to the DMV.
On top of that, you’ll now be required to carry a pricey SR-22 insurance policy in addition to your regular policy, and also obtain an SR-22 Proof of Financial Responsibility certificate.
Proof of Insurance
Simply having a policy with the minimum required coverage isn’t enough. You actually need to carry proof of that coverage with you every time you’re behind the wheel.
In California, you are required by law to carry proof of insurance. This may be in the form of an insurance card, which the company may mail you or provide online for you to print out. Some companies also provide a mobile app, from which you’ll be able to pull up a digital version of your insurance card. While this is handy, you should probably also keep a hardcopy version in your vehicle, just in case.
Your proof of insurance card will include the policy number, name of the policyholder, all vehicles covered under the policy, and the dates of valid coverage. Insurance companies will report to the DMV if you stop paying your auto insurance premiums. So, even if your insurance card still shows a valid date, if your payments have lapsed and you get pulled over, the officer will know.
California also allows you to self-insure, as mentioned above. If this is the case, you’ll need to carry your proof of cash deposit or surety bond. Contact the state’s DMV to learn more about self-insuring options and requirements.
Average Cost of Coverage in California
Ever wondered how your own coverage cost compares to others in your state. Well, if you live in California, here’s how your policy measures up.
According to QuoteWizard, the average total cost for coverage in the Golden State is $814.82, which equates to $67.90 a month. This breaks down to an average annual cost of $482.18 for liability coverage, $374.31 average for collision coverage, and $98.73 average for comprehensive coverage.
|Total Cost Per Year||$814.82|
|Price Per Month||$67.90|
Of course, your actual policy cost could vary greatly depending on many factors. These could include your personal driving record, age, location in the state, what kind of car you drive, and whether you qualify for any discounts.
Cheapest Car Insurance in California
As you can expect, insurance rates have a wide range based on each insured individual. It’s hard to compare companies when looking for the one with the cheapest rates since averages include 18-year-old male drivers with sports cars just as much as they include 35-year-old women with minivans (and everyone in between).
However, we took the time to compare some of the more popular companies, to see how they measured up in the state of California. They were pitted against one another with the same search criteria. Our sample policyholder was a single male, age 30, with a clean driving record. He lives in the Sacramento area and drives a 2013 Chevrolet Malibu.
Here’s how some of the most popular companies measured up:
|Insurance Company||Annual Premium|
Let’s take a look at how our same example guy would fare if he instead lived in Los Angeles:
|Insurance Company||Annual Premium|
Your results may vary based on your specific zip code. However, if you live in California, you can probably bank on California Capital and Mercury being two of your cheapest insurance providers in the state.
Cost of Auto Insurance in California
How much does auto insurance cost in California? is a question with literally hundreds of answers. It depends on so many variables, including:
- Marital status
- Driving record
- Vehicle(s) covered
- Whether your vehicle is financed, leased, or paid in full
- ZIP code
- Whether you own or rent your home
- Miles driven each year and the purpose of those miles (work commute, pleasure, etc.)
- How much coverage is desired
There would be no way to precisely answer that question without knowing your individual factors. As mentioned above, though, the average cost of an auto insurance policy across the entire state of California is about $815 a year.
Let’s narrow that down a bit further, though, and see if we can give a better idea of how much you can expect to pay in the state. We will compare four different profiles and see how our auto insurance quotes change.
All four of our example drivers live in ZIP code 95338, which is one of the lower-cost auto insurance areas in the state. Keep in mind that ZIP codes in cities like San Diego, Los Angeles, or Sacramento could potentially be much, much higher.
Little Timmy is your typical high-risk insured driver. He’s 22 years-old, still in college, and cruises around in a financed 2012 Chevrolet Impala. He has a bit of a lead foot: in the last three years, he’s managed to acquire two speeding tickets (though no accidents). He drives to work every day, for an average of about 15,000 miles a year, and rents an apartment across town.
John and Jane Smith are your average 42 year-old parents. They’re still paying off the mortgage on their home, though they own a 2011 Chevrolet Equinox and have a financed 2014 Toyota Sienna for carting their children to soccer practice (for an average of about 16,000 miles a year). Both have bachelor’s degrees, and Jane was in a small fender bender a couple of years ago.
Then there’s Straight-Laced Sally, 35. She owns her 2010 Toyota Camry, which she drives about 10,000 miles a year. She owns her condo outright, graduated college, and hasn’t had an accident or traffic ticket in over 10 years.
Lastly, we have Grandpa Joe. He’s 65 years young and still cruising around in his 98 Honda Civic (about 8,000 miles per year). He owns his home, hasn’t had a traffic ticket or accident since his 40s, and earned his bachelor’s degree long ago.
So, which of these folks do you most closely relate to, for insurance purposes? Let’s see how they each measure up when it comes to obtaining policy quotes in the state of California for basic, state-minimum liability coverage. (Quotes provided by thezebra.com.)
|Little Timmy||John & Jane Smith||Straight-Laced Sally||Grandpa Joe|
As you can see, accidents and citations seem to have more of an impact on premiums than anything else, followed by age.
California's Unique Car Insurance Rules
There are a few state-specific laws that will affect your premiums in California. Let’s talk about them and see how they will impact the price you pay for insurance coverage.
This California law requires insurance companies to give good drivers a discount of at least 20 percent if three criteria are met. This reward is guaranteed as long as the driver:
- has been licensed for at least three years,
- has no more than one point on their record in the past three years, and
- hasn’t been found at-fault for an accident in the past three years.
If you look at our four example policyholders above, you can see that this definitely applies. The two who had citations or accidents on their records (Little Timmy and Jane Smith) also paid higher premiums on average.
Credit Isn’t a Factor
In many states, insurance providers will take into account your credit history when determining your insurability. In California, this isn’t the case.
For drivers in this state, credit history won’t play a factor in determining your approval or premium costs. Depending on the credit history you’ve built over the years, this may be a good thing or a bad thing for you!
...Location Is, Though
Thanks to 90210, we already know that ZIP codes matter in California. However, did you know that they will play a factor in determining how much you pay for auto insurance?
Where you live in the state plays a role when it comes to calculating your premiums. Can you imagine moving down the road and seeing your auto insurance costs double or triple?
Of course, California law dictates that your location be used as a secondary factor in figuring out the rate you’ll pay. This makes locale less important than your driving record, of course, but it’s still a pretty significant part of the calculation.
If you have trouble obtaining, and paying for, the state-required minimum coverage ($15,000/$30,000/$5,000) in the state of California, you may be eligible to apply for the California Low Cost Automobile Insurance Program.
In order to apply, you’ll need to meet a few requirements. These include being at least 19 years of age, having a valid California driver’s license, owning a vehicle that’s worth $25,000 or less, and meeting income eligibility requirements.
To find out if your qualify for the low-cost program, you can visit this page and answer the questionnaire.
Top Car Insurance Companies in California
Wondering who the most popular, and most widely-used, insurance companies are in the Golden State? Here’s a look at seven of the top providers, and the market share that they hold in the state.
Curious to see how these insurance companies measure up in customer satisfaction? Here are some scores from two of the most popular rating bureaus, for the top five insurance providers in the state. We looked at both A.M. Best and JD power ratings for these comparisons.
AAA Northern + Interinsurance Exchange of the Automobile Club
These two companies combine to serve the northern and southern halves of the state, and account for the biggest auto insurance market share in California. Here’s how they are rated in customer satisfaction and stability:
- A.M. Best: A+ rating (AAA Northern) and A+ rating (Interinsurance Exchange of the Automobile Club)
- JD Power: #5 in the state with a 5-star rating in overall satisfaction (Interinsurance Exchange of the Automobile Club) and #11 in the state with a 3-star rating in overall satisfaction (AAA)
State Farm is the second-largest auto insurance market shareholder in the state. Here’s what its customers think:
- A.M. Best: A++ rating
- JD Power: #7 in the state with a 4-star overall satisfaction rating
Allstate is the third-largest insurer with a ~7% market share.
- A.M. Best: A+ rating
- JD Power: #13 with a 3-star overall satisfaction rating
This company insures only 6.5% of drivers in the state, but its justified complaints ratio is the lowest of all the California auto insurance companies.
- A.M. Best: A+ rating
- JD Power: #15 in the state with a 3-star overall satisfaction rating
This company is under the umbrella of Farmers Insurance insures 5.7% of the California market, making it the fifth most popular insurer in the state.
- A.M. Best: a rating
- JD Power: #16 in the state with a 2-star overall satisfaction rating
If you want to learn more about being an insured driver in California, the state provides a wealth of free guides and useful educational materials on its website. You can view them here.