With more than 27 million licensed drivers on the roads of 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 auto insurance in California
Price is a priority for many auto insurance buyers. We evaluated the average prices of 10 major auto insurance companies in California for a variety of drivers. As you’ll see, comparison purchases are important, as the cheapest companies vary based on your driving record and the amount of insurance you purchase, among other factors.
Cheap auto insurance companies for good drivers
Geico and Progressive are the state’s cheapest companies for good drivers, among the insurers we reviewed. Be sure to regularly request a remittance review from your insurer.
Cheap auto insurance companies for speeding drivers
Geico and CSAA (the AAA regional insurer) are the cheapest companies in California if you get a speeding ticket. Speeding in California will usually result in a fine and a point on your license, which will last for 39 months.
Cheap auto insurance companies for injured drivers
CSAA and Geico are the cheapest auto insurance companies in California if you’ve been in an accident. California law states that you must report an accident to the DMV if there has been an injury, death, or property damage over $ 1,000. An accident will remain on your record for three years. Here is the California guide to what’s next after you have an accident.
Cheap Auto Insurance Companies For Adding 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 to add a teenage driver, among the insurers we reviewed.
Cheap auto insurance companies for drivers with minimal state coverage
Progressive and Geico are the cheapest companies if you want to buy only California’s minimum coverage limits. While you’ll save money upfront, be aware of the financial trade-off – you might not have enough insurance if you cause an accident.
California Low Cost Auto Insurance Program
California operates a program that makes auto insurance more affordable for drivers who meet income criteria. You can find out if your income level qualifies for MyLowCostAuto.com. To be eligible, you must also:
- 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 unhappy with auto insurance fairness
Nearly six in 10 California voters (58%) said they were dissatisfied with the fairness of auto insurance rates, according to a November 2020 survey conducted by EMC Research and commissioned by Root Insurance. Just over half of those surveyed believe that the current method of determining auto insurance rates in California is discriminatory.
Ironically, California’s Prop 103 law, passed in 1988, was supposed to reduce these grievances. The law states that auto insurers in California must base their rates on driving record, years of driving experience and annual mileage.
The level of dissatisfaction with auto insurance rates in California was high among major demographic groups:
- 70% of low-income voters said they were dissatisfied with rate fairness, along with 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 auto insurance for low-income drivers
The survey also found that 58% of Latino and black voters believe the current way of determining car insurance rates 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 auto insurance rates should be determined by how well a person drives relative to their demographic, California voters overwhelmingly chose driving behavior as the most important.
At national scale, insurance regulators pledged to fight racism and discrimination within the industry. The National Association of Insurance Consultants has announced the formation of a special committee focused on race and insurance. The committee is charged with examining the potentially discriminatory practices inherent in the industry’s use of non-driving pricing factors such as employment status, education, home ownership and insurance credit scores.
Minimum auto insurance required in California
Liability insurance pays for damages and injuries you cause to others. In turn, if someone else hits you, you should be able to make a claim on their liability coverage. Car owners in California must purchase at least:
- $ 15,000 for personal injury / death.
- $ 30,000 for injuries / deaths of more than one person.
- $ 5,000 for property damage.
What else should I have?
the best auto insurance begins with liability insurance that exceeds state requirements. State minimums are low and can put you at risk for legal action when you don’t have enough insurance. If you have assets to protect against a lawsuit, such as savings, you’ll want a higher level of coverage. As your income and assets increase, you may become a target for lawsuits and should consider generous auto insurance limits.
The other types of coverage we recommend are:
Collision and full coverage: Collision and global pay for repairs to your car from a wide variety of problems including hail, floods, fires, vandalism, and collisions with other objects and animals. Comprehensive insurance also covers car theft.
Coverage for uninsured motorists: If you are injured by a driver who has little or no liability insurance, coverage for uninsured motorists (UM) can help. It pays your medical bills when someone else causes an accident and they don’t have insurance or 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 additional layer of liability insurance on top of your auto and home insurance. In the event of a catastrophic car accident, Umbrella Coverage provides increased coverage against lawsuits.
Can I show my insurance ID card from my phone?
California law allows you to show proof of insurance from your cell phone. Otherwise, you must keep a hard copy in your car and show it when:
- The police demand it.
- You renew the vehicle registration.
- You are in a car accident.
Average auto insurance premiums in California
California drivers pay an average of $ 892.55 per year for auto insurance. This average includes all levels of insurance purchased. Below are the average premiums for common types of coverage.
Factors Allowed in California Auto Insurance Rates
Auto insurance companies typically use many factors to calculate your rates, and prices can vary widely from insurer to insurer. Your driving record, previous claims, vehicle model and more all play a role. In California, companies can also use these factors.
Resolve insurance issues
The California Department of Insurance is responsible for handling complaints against insurance companies. If you have a problem with your insurer that you haven’t been able to resolve, the insurance department may be able to help. To see the get the help page.
To find the cheapest auto insurance companies in California, we used the average rates of 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.