With more than 27 million licensed drivers filling the roads in California, it’s important to have good auto insurance. Here’s how to choose a good insurance policy that won’t leave you with big accident bills.
Cheap Car Insurance in California
Price is top of mind for many auto insurance shoppers. We evaluated average prices for 10 large auto insurance companies in California for a variety of drivers. Comparison shopping is important, as you’ll see, because the cheapest companies will vary depending on your driving record and how much insurance you’re purchasing, among other factors.
Cheap Car Insurance Companies for Good Drivers
Geico and Progressive are the cheapest companies in the state for good drivers, among the insurers we evaluated. Make sure to ask for a review of discounts regularly from your insurer.
Cheap Car Insurance Companies for Drivers with a Speeding Ticket
Geico and CSAA (the regional AAA insurer) are the cheapest companies in California if you have a speeding ticket. A speeding ticket in California will usually result in a fine and one point on your license, which will last for 39 months.
Cheap Car Insurance Companies for Drivers with an Accident
CSAA and Geico are the cheapest California auto insurance companies if you’ve caused an accident. California law says you must report an accident to the DMV if there was an injury, death or property damage above $1,000. An accident will stay on your record for three years. Here’s California’s guide to what’s next after you have an accident.
Cheap Car Insurance Companies for Adding a Teen Driver
Adding a teenage driver to an insurance policy is one of the most expensive insurance situations you can have. Farmers and Mercury are the cheapest companies in California for adding a teen driver, among the insurers we evaluated.
Cheap Car Insurance Companies for Drivers with State Minimum Coverage
Progressive and Geico are the cheapest companies if you’re looking to buy only the minimum California coverage limits. While you’ll save money on the front end, be aware of the financial trade-off: You might not have enough insurance if you cause an accident.
California’s Low Cost Automobile Insurance Program
California runs a program that makes auto insurance more affordable for drivers who meet income guidelines. You can find out whether your income level qualifies at MyLowCostAuto.com. To qualify you also must:
- Be at least 16 years old
- Have a valid California driver’s license
- Have a vehicle worth $25,000 or less
- Have a good driving record
Many Californians Dissatisfied with Fairness in Auto Insurance
Almost six in 10 (58%) California voters said they are dissatisfied with the fairness of car insurance rates, according to a November 2020 survey conducted by EMC Research and commissioned by Root Insurance. Just over half of survey respondents feel the current method to determine car insurance rates in California is discriminatory.
Ironically, California’s Prop 103 law, passed in 1988, was supposed to reduce these grievances. The law says auto insurers in California must base their rates on driving record, years of driving experience and annual mileage.
The level of dissatisfaction with California auto insurance rates was high among key demographic groups:
- 70% of lower-income voters said they are unsatisfied with fairness of rates, as well as 64% of Latino voters, 61% of Asian/Pacific Island voters, 59% of Black voters and 61% of Democrats
- Only 11% of Black voters and 17% of Latino voters are satisfied with the availability of affordable car insurance for low-income drivers
The survey also found that 58% of Latino and Black voters believe the current way car insurance rates are determined is discriminatory.
“Black and Latino voters feel discriminated against and that won’t change unless we make changes to give them more fair and equitable options,” said Edwin Lombard, CEO of the California African-American Chamber of Commerce, in a statement.
When asked if car insurance rates should be determined by how someone drives versus their demographic makeup, California voters overwhelmingly chose driving behavior as the most important.
Nationwide, insurance regulators have pledged to address racism and discrimination within the industry. The National Association of Insurance Counselors announced the formation of a special committee with a focus on Race and Insurance. The committee is tasked with looking into potentially inherently discriminatory practices in the industry’s use of non-driving pricing factors such as occupational status, education, home ownership and insurance credit scores.
Required Minimum Auto Insurance in California
Liability insurance pays for damage and injuries you cause to others. In turn, if someone else crashes into you, you should be able to make a claim on their liability coverage. Car owners in California must buy at least:
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
What Else Should I Have?
The best car insurance starts with liability insurance that’s higher than state requirements. State minimums are low and can leave you open to lawsuits when you don’t have enough insurance. If you have assets to protect from a lawsuit, such as savings, you’ll want a higher level of coverage. As your income and assets get higher, you can become a lawsuit target and should consider generous auto insurance limits.
Other coverage types we recommend are:
Collision and comprehensive coverage: Collision and comprehensive pay for repairs to your car from a wide variety of problems, including hail, floods, fire, vandalism and crashes with other objects and animals. Comprehensive insurance also covers car theft.
Uninsured motorist coverage: If you’re injured by a driver who has little or no liability insurance, uninsured motorist coverage (UM) can help. It pays your medical bills when someone else causes an accident and they have no insurance or not enough to cover your bills. UM can also pay for lost wages and pain and suffering due to the accident.
Umbrella insurance: This coverage provides an extra layer of liability insurance above your auto and homeowners insurance. In the event of a disastrous auto accident, umbrella coverage gives increased coverage from lawsuits.
Can I Show My Insurance ID Card from My Phone?
California law allows you to show proof of insurance from your mobile phone. Otherwise you must keep a paper copy in your car and show it when:
- Law enforcement requests it.
- You renew the vehicle registration.
- You’re in a car accident.
Average Car Insurance Premiums in California
California drivers pay an average of $892.55 a year for auto insurance. That average includes all levels of insurance purchased. Below are average premiums for common coverage types.
Factors Allowed in California Car Insurance Rates
Car insurance companies typically use many factors to calculate your rates, and prices can vary significantly among insurers. Your driving record, past claims, vehicle model and more all play a part. In California companies can also use these factors.
Solving Insurance Problems
The California department of insurance is responsible for taking complaints against insurance companies. If you have an issue with your insurer that you haven’t been able to resolve, the department of insurance may be able to help. See the getting help page.
Methodology
To find the cheapest auto insurance companies in California, we used average rates from Quadrant Information Services, a provider of insurance data and analytics. The companies evaluated for California were AAA (Interinsurance Exchange of the Automobile Club), Alliance United, Allstate, CSAA, Farmers, Geico, Infinity, Mercury, Progressive and State Farm.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
