California, by population, is the largest state in the country. There are approximately 34,273,969 drivers in the state. Because of this large number and the presence of heavily populous cities, such as Los Angeles and San Francisco, auto insurance rates can be very high because of the potential for car accidents.
In California, car insurance is mandatory. There’s no way around it. The Golden State has plenty of rules, regulations, and policies unique to it. Luckily, this article will break it all down for you. We’ll give you a run-down of how much car insurance costs in California and which companies are best. You’ll also learn about the state’s various laws and policies.
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Average California Auto Insurance Rates
Average rates are important to know when you’re buying a new policy. They can help you find out if you’re currently paying above or below the average. If you’re paying above, it may be time to look for a better deal.
Surprisingly, California car insurance rates stack up well to the national average. In the table below, you can see that only collision coverage rates in California are higher than the national average.
|Coverage||California Average||US Average|
|Price Per Month||$87.65||$89.20|
Average Full Coverage Rates
The graph below shows the change in average California car insurance rates from 2012 to 2019. Full coverage prices rose from $749 in 2012 to $1,070 in 2019. This was an increase of $321, or 43%! California’s average premiums have also been lower than the US average from 2012 to 2019, even despite the state’s huge population.
Average Liability Coverage Rates
The next graph displays California’s average liability coverage rates from 2012 to 2019. Throughout this period, California’s liability rates have stayed below the national average. However, you can see that average rates have increased from $450 to about $620 from 2012 to 2019. This is due to factors, such as:
- Growth in population
- Distracted driving
Average Collision Coverage Rates
Unlike liability insurance, California’s collision coverage rates are much higher than the national average. The state’s population may be to blame for such high prices. California saw a rise in collision costs from $350 in 2012 to about $490 in 2019. As the population and number of drivers grow, so does the risk of accidents. Insurers tend to account for this with a rise in rates.
Average Comprehensive Coverage Rates
The national average cost for comprehensive car insurance is much higher than in California. As the national average has been rising since 2012, California’s rates have been gradually decreasing. This is surprising because, in 2019 and 2020, California ranked number one for motor-vehicle thefts, according to the III.
California Minimum Auto Insurance Requirements
Almost all states require insurance to drive. But each of them has unique requirements. State requirements include the following:
- Certain coverage types
- Coverage limits
Unlike some states, California only requires you to carry liability. Other coverage types, such as personal injury protection (PIP) and MedPay, are optional.
California requires proof of financial responsibility before you can register a vehicle. You’ll also need to keep it in your car at all times. Financial responsibility means that you’re able to pay for the damages if you were to cause an accident.
One way to show proof of financial responsibility is to simply carry the state’s recommended amount of liability coverage. California requires a minimum of:
- $15,000 of bodily injury liability (BIL) for the injury or death of one person in a car accident caused by the driver of the insured vehicle
- $30,000 of bodily injury liability (BIL) for the injury or death of more than one person in a car accident caused by the driver of the insured vehicle
- $5,000 of property damage liability (PDL) for each accident caused by the driver of the insured vehicle
Note: on January 1, 2025, California’s minimum liability insurance limits will raise to $30,000 for the bodily injury of one person, $60,000 for the bodily injury of two or more people, and $15,000 for property damage. This is due to the state’s Protect California Drivers Act.
You will sometimes see minimum liability requirements written in shorthand form: “15/30/5.”
Purchasing the minimum required coverage satisfies the law. But the auto insurance industry recommends bodily injury limits of $100,000 per person and $300,000 per accident.
Zachary Schneiderman, president of Schneiderman Insurance Agency, warns that California is a “litigious state.” He adds, “Think of the cars around you. There are lots of Teslas and BMWs. These cost much more to repair.” In light of this reality, you should consider adding as much coverage as you can afford.
You also need to consider the fact that, when injuries occur, your liability coverage limits won’t always be enough. This leaves you to pay out of pocket for any remaining expenses. “What happens when someone breaks their leg in an accident and needs physical therapy? If they hire a lawyer, the costs can go up very quickly,” says Schneiderman.
Find the Best Car Insurance in California
Compare quotes among leading car insurance companies to get better coverage and lower rates.
Uninsured/Underinsured Motorist Coverage
Uninsured and underinsured motorist (UM and UIM) coverage helps protect you if you get into an accident with someone who has no insurance or not enough. Normally, a person’s liability would cover damages and injuries if they caused the accident. But, in the case of uninsured and underinsured drivers, you could be left to pay for the damages unless you have the right coverage.
While California doesn’t require UM and UIM coverage, it still requires providers to offer it to you. You may reject it in writing and then you won’t have to buy it. To reject it, you’ll need to fill out a waiver form. It will indicate that you didn’t want UM and UIM when your insurer offered them to you.
Keep in mind that California has the 10th most uninsured drivers in the country, per the III. This means that while most drivers have the required liability coverage, 16.6% do not. Getting into an accident with an uninsured or underinsured driver could leave you to pay for the expenses out of pocket. UM and UIM coverage can help you avoid this and give you peace of mind.
Valid Proof of Financial Responsibility
There are many ways to prove your financial responsibility. In California, these are acceptable forms of proof:
- The minimum amount of liability coverage
- Self-insurance certificate (your DMV would issue this)
- Deposit of $35,000 cash with the DMV
- A surety bond of $35,000
Penalties for Driving Without Car Insurance
Driving without insurance is a bad idea. Each state has its own set of penalties for doing so. In California, first-time offenders normally receive a $500 fine and a license suspension. Any future offenses will get you another $500 fine and a longer suspension of your driver’s license.
Best Car Insurance Companies in California
If you’re looking to buy a new policy in the Golden State, you have plenty of options. But which one is the best? The best auto insurers will have competitive rates, lots of benefits (such as discounts), and great customer service. These are the factors you should consider when you’re shopping for coverage.
Top Companies by Market Share
Market share can be a key metric to look at when you’re trying to find the best insurance company. It can show you how popular (or not) an insurer is. It’ll also tell you who the major players in the area are. Keep in mind that the company with the biggest market share may not be the best one to buy from.
The table below lists the top ten auto insurance companies in California in 2020 by market share and policies written:
|Rank||Company||Direct Premiums Written||Market Share|
Top Companies by J.D. Power Rating
Another way to find the best insurers in your state is by looking at their J.D. Power rating. J.D. Power ranks carriers based on an overall customer satisfaction rating.
|Rank||Company||Customer Satisfaction Score (Out of 1,000)|
|2||CONNECT by American Family||839|
|3||Auto Club of Southern CA||830|
Does California Have Low-Income Car Insurance?
Car insurance can be expensive. This can make it hard or even impossible to get. But what if you need to drive? Luckily, California offers a program to help low-income individuals afford car insurance. You’ll see the state and insurers refer to it as the California Low-Cost Auto insurance program (CLCA).
What CLCA Includes
The CLCA program will help you get the bare minimum car insurance you need to drive in the state. Keep in mind that this doesn’t include extra types of coverage, such as collision, comprehensive, or MedPay. Here’s what the program includes:
- $10,000 of bodily injury for each person
- $20,000 of bodily injury for each accident
- $3,000 of property damage
While California doesn’t require UM and UIM coverage, you can still get it through the CLCA. Here’s what the program gets you:
- $20,000 per accident
- $10,000 per person
You can also opt to get MedPay through the program. The CLCA will give you up to $1,000 per person if you want to receive MedPay.
How to Qualify
Only people whom California sees as low-income can qualify for the CLCA program. There’s a set of requirements that you’ll have to meet to qualify for the program. Here’s what would qualify you as a low-income individual:
- Have an up-to-date driver’s license
- Be at least 16 years old
- Own a car that’s worth $25,000 or less
- Keep a clean driving record
- Have an income that doesn’t go over California’s threshold of eligibility
- One person/household – $33,975.00
- Two people – $45,775.00
- Three people – $57,575.00
- Four people – $69,375.00
- Five people – $81,175.00
California Auto Insurance Laws
In 1988, voters in California passed Proposition 103 into law. This policy requires insurers to get “prior approval” from the state’s Department of Insurance before setting property and casualty rates. The law also bans insurers from using unjustifiable factors to calculate your rates. This includes anything that the state deems unrelated to your driving behavior, including credit scores and gender.
While not technically a car insurance law, Proposition 24 affects how carriers can use telematics data. Also known as the California Privacy Rights and Enforcement Act of 2020, Proposition 24 prevents businesses from using a consumer’s personal information, unless they otherwise approve. This includes location tracking that insurance telematics devices use.
So, in simple terms, you must allow your insurer to use your data as an auto insurance rate factor. Otherwise, they may not use it to set your rates. Be sure to read the fine print when you sign up for a telematics program to avoid any unwanted usage of your data.
No-Fault or Fault
No-fault states are those that require coverages like MedPay and PIP, which will cover your injuries regardless of fault. California is not a no-fault state. Rather, it’s a fault or tort state. This means that a person needs to be found at fault for an accident before their policy covers the damages and injuries.
Although California doesn’t require you to buy no-fault insurance, such MedPay or PIP, they could still be a good idea. Medical bills can cost thousands of dollars. These coverages will help ensure that you don’t have to pay any money out of pocket.
A total loss is where the damages from an accident cost more than your car is worth. Insurers will declare your car to be a total loss if it exceeds a threshold of damage. In many states, this threshold is when the damages reach a certain percentage of the car’s value.
In California, a total loss is based upon a total loss formula or TLF. Here, the insurer determines the cost of repairs plus the scrap value. If it equals or exceeds the actual cash value (ACV) of your car before the accident, then it’s a total loss. Your insurer will repair and return your car if the damages come out below the total loss threshold.
Salvage and Revived Salvage Titles
A salvage title car is one that an insurer has previously declared as a total loss. These cars are typically undrivable or have significant damage. Total Loss Salvage title cars aren’t legal to drive. They’re also very hard to insure. But it’s common for people to buy salvages for cheap and then restore them to a drivable state. If you restore a salvaged car, it’ll receive a revived or revived junk title.
How to Get a Revived Salvage Title in California
It’s not as simple as repairing your car to a drivable state to get a revived title, though. You’ll also need to get your state to approve it. California has specific criteria that your total loss salvage car will need to meet before it receives a revived title brand. The revived title law requires:
- A complete and signed Application for Title or Registration (REG 343)
- A junk receipt from the DMV (You’ll need a statement of facts form if you bought the car outside of the state)
- Brake and light adjustment certificates
- An odometer disclosure statement
- Paid all the registration and filing fees with the DMV
Insurance for Cars with Revived Titles
Once repaired, revived junk cars must be insured before you can drive them. You should have no problem finding an insurance policy for a revived junk-branded title in California. However, your insurer may limit you to a liability-only policy. This means you wouldn’t be able to get full coverage.
Car insurance for a revived junk or total loss salvage car will also cost more. This is because your insurer understands that there are still risks with rebuilt cars. It’s hard to know for sure how safe the car is, even after undergoing full repairs and an inspection. While your policy will be more expensive, you should still try and find the best deal possible. It’s smart to shop around and compare quotes to find the best rates.
An SR-22 form is a document that serves as proof of financial responsibility. States will typically ask high-risk drivers to sign them. The form certifies that you have state-mandated minimum liability coverage.
In California, you’ll need to file an SR-22 form if you want to reinstate your license after a DUI. Normally, you’ll know when you need to file one because a court will order you to do so. You may also have to file an SR-22 form if you were driving without insurance and got into an accident.
Be sure to check out our article on SR-22 forms to learn exactly how they work and how you can file one.
Filing an accident claim is a pretty straightforward process. First, you’ll need to notify your insurer, even if the other driver is at fault. If the other driver caused the accident, you’ll need to file a claim with their insurer. If the car accident was your fault, you’ll only need to file claims for collision coverage, MedPay, or PIP (if you have them).
Below are a couple of common questions relating to filing claims in California:
How long does an insurance company have to settle a claim in California?
Insurance companies have 85 days to settle an auto claim. The Fair Claims Settlement Practices Regulations ensure that carriers will settle your claim in a reasonable and timely manner.
How long does an accident victim have to file a claim in California?
The deadline for filing an auto claim in California is two years. If the accident only involves damage and no injuries, you have up to three years to file a claim.
Keep in mind that you may still have to report the accident to the California DMV. You have ten days to report the accident to the DMV if the accident causes:
- Injuries or death
- Property damage of at least $1,000
Your credit history is a rate factor used by insurance companies to set rates. But not all states allow insurers to use it to determine your rates. California’s Proposition 103 doesn’t allow your credit score to affect your car insurance rates. Insurers also can’t cancel or deny your policy based on your credit history.
Insurance companies use telematics programs as a way to determine your rates. These programs collect data about your driving behavior (braking, acceleration, speed, mileage, etc.), either through an app or other device and raise or lower your rates accordingly. However, in California, insurance companies may only collect mileage data. Insurers may not use any other data to set your auto rates.
California’s Propositions 103 and 24 both govern insurers’ use of telematics to determine auto insurance rates. Proposition 103 only allows providers to use certain factors to price your rates. On the other hand, Proposition 24 prevents businesses from collecting and releasing personal info from consumers. This includes data that insurers collect via telematics apps or devices.
In many states, insurers will raise prices to test the boundaries of how much you’re willing to pay. This practice is what many refer to as “price optimization.” California doesn’t allow price optimization to determine your rates. This is because California believes that price optimization isn’t based on assessing a driver’s risk of getting into accidents or costing the insurer money.
Many insurers offer accident forgiveness as a benefit. Accident forgiveness is where your insurer won’t raise your rates after your first at-fault accident. The accident will remain on your record, however.
Insurers in the Golden State may not offer accident forgiveness. This is due to California’s Proposition 103.
Canceling Your Policy
There are some instances where insurers may cancel your policy. State laws commonly regulate this. In California, car insurance companies may only cancel your policy if you:
- Don’t pay your premium
- Have your license suspended
- Commit fraud
- Misrepresent or falsify information
- Are a high-risk driver
Reinstating your policy after cancellation is possible in some situations. If you receive a cancellation notice from your insurance provider, contact them immediately. It’s always easier to reinstate a policy before insurance lapses. So, you can save yourself a lot of grief by acting fast to maintain coverage.
New Car Insurance Grace Period
Some states have a grace period for new cars. California, on the other hand, does not have any sort of grace period. This means you must have coverage when you drive your vehicle off the lot. You’ll have to add your new car to your existing policy so that you can leave with your car.
California Drunk Driving Laws
Driving while under the influence of drugs or alcohol can land you in some big trouble. It’s sure to have an impact on your car insurance rates. But it can also net you huge fines and possible jail time. California imposes severe penalties for DUI offenses.
Here’s what’ll happen if you’re a first-time DUI offender:
- License suspension for up to six months
- At least three years of probation
- $390 fine and penalty assessments (which amount to about $2,000)
- Installation of an ignition interlock device (IID). This depends on which county you’re in.
- Potentially six months in jail
- DUI school lasting anywhere from three to nine months
The total cost of a DUI can rack up fast. Legal fees, fines, and mandatory classes can cost you thousands. Repeated offenses will result in more severe penalties and possibly more jail time.
California Driver’s License Points System
California uses a driver’s license points system to keep track of any violations against you. If you end up with too many points on your record, the DMV will suspend your license. California’s Negative Operator Treatment System issues up to three points for various types of moving violations and at-fault accidents. Below are examples of violations that would result in points:
- Speeding ticket – one point
- Driving an unsafe car – one point
- Hit-and-run – two points
- DUI – two points
- Reckless driving – two points
Most Popular Cars in California
Each state has a unique list of popular cars. These are the most common and desirable cars in the area. It can also make them a target for thieves. Providers pay close attention to which cars are the most popular in each state and it may affect your rates, one way or another if you have one on the list. Here are 2021’s most popular cars:
- Honda Civic
- Toyota RAV4
- Tesla Model Y
- Toyota Camry
- Tesla Model 3
Most Stolen Cars in California
Below are the state’s top ten most stolen cars in 2021. If you own one of these vehicles or are thinking of buying one in the future, be aware that it could be a target for thieves. Your insurer may also raise your rates if you have one of these cars on your policy.
- 2000 Honda Civic
- 1997 Honda Accord
- 2001 Chevrolet Pick-Up (Full Size)
- 2004 Ford Pick-Up (Full Size)
- 2000 Honda CR-V
- 2019 Toyota Camry
- 2001 GMC Pick-Up (Full Size)
- 2020 Toyota Corolla
- 2001 Chevrolet Tahoe
- 1999 Toyota Tacoma