Driving a vehicle means having auto insurance, because in California it’s a requirement. California does not play games when it comes to driving and staying insured. There are dozens of auto insurance providers offering lots of different options that meet or exceed the state requirements since there are millions of drivers to insure.
Do all of these options mean more competition and better rates for drivers? Or is it going to be more expensive to get insurance that does more than meet the bare minimum? Is the average cost of car insurance in California more or less than other states?
Before we get into that, let’s go over the state minimum requirements first since that helps dictate auto insurance rates in California.
Average Cost for Minimum Auto Insurance Requirements in California
California, like almost all other states, has created state laws that mandate vehicle owners must have a certain level of auto insurance coverage. If you're driving in California, you are legally required to have insurance and the policy information should be in the vehicle with you.
California requires the following minimum amounts for liability insurance:
$15,000 for bodily injury/death per person
$30,000 for bodily injury/death per accident
$5,000 for damage to property
You might hear auto insurance called by its other name, financial responsibility. The state of California has deemed auto insurance minimums to be necessary so that drivers who cause accidents are able to take financial responsibility for the damage they caused.
To give you a better idea of what you’ll pay for auto insurance in California, here’s the annual average rate for minimum insurance coverage from some of the state’s top providers, according to the latest California auto insurance analysis from Forbes:
Progressive: $433
USAA: $447
GEICO: $487
CSAA: $538
State Farm: $617
Alliance United: $661
Forbes found that the annual average premium for the minimum liability coverage only is $520.81. The Zebra crunched the auto insurance costs and determined $573 was the annual average for liability coverage only in California. ValuePenguin has the highest annual average of $617 for minimum coverage. Given that data, it’s safe to say auto insurance will cost around $550 a year or more if you opt for additional coverage.
*Rates valid as of the writing of this article. These rates do not include comprehensive and collision coverage that provides additional protection.
Average California Auto Insurance Costs Beyond the Minimum
If you live in California you won’t be too surprised to find that the annual cost of auto insurance is 20% higher on average compared to other states. But that’s considering all 27 million California drivers, many of which choose to get auto insurance coverage beyond the minimum required amounts.
Forbes notes that the average annual premium for auto insurance in California is $892.55.
The Zebra estimates the average annual premium for California auto insurance is $1,713 a year.
There’s a wide spread between the averages for good reason. A lot of factors go into the cost of an auto insurance premium. Providers are considering your age, marriage status, location and driving record before they give you a quote. As a result, some drivers pay a lot more on average.
- If you are 16 years old . . . the average annual cost of car insurance is going to be $7,175.12.
- If you are in your 30s . . . the average annual cost of car insurance is going to be $1,618.56.
- If you add a teen driver to your policy . . . the average annual cost will increase by $2,812.
- If you have been convicted of a DUI . . . the yearly premium cost for auto insurance will be $4,689.59.
- If you recently got a speeding ticket . . . the yearly premium cost for auto insurance will be $2,324.98.
The other big factor, location, causes even more variation in insurance rates. Basically, the less traffic and accidents there are in a city the safer it will appear to be for drivers. Safer means less risk of an accident, which means lower auto insurance rates.
Wallethub recently updated its list of the best and worst cities to drive in. When you drill down to the traffic and infrastructure metric, some California cities rank near the bottom.
- San Francisco - #95 out of 100
- Oakland - #92 out of 100
- Los Angeles - #89 out of 100
- San Jose - #88 out of 100
- Fremont - #82 out of 100
Bakersfield, CA got the best traffic and infrastructure ranking at #23. The California city with the highest ranking for overall safety is Irvine, CA - it came in at #1 on the list for driving safety! Irvine was closely followed by Chula Vista, CA which came in at #2.
Overall, where you live in California can be one of the biggest determining factors for the price of your premium. Some cities will have you paying lower than the national average, while others will be exorbitantly higher based on what it’s like driving in the city.
In California, it is actually illegal for car insurance providers to take into account your credit history when determining your rate. Instead, your insurance rate is primarily decided by your age, driving record and how many miles you drive - thus your location.
With such a vast amount of options for car insurance companies, it's important to compare coverage and rates before deciding which one you want to go with. Check out this helpful guide on everything you need to know about vehicle insurance in California, including the types of discounts offered and the ideal insurance providers based on your driving type.
Don’t Forget About the Auto Insurance Deductible
Your monthly premium is just one expense you have to watch out for. If you actually need to use your auto insurance because you are at-fault for an accident then you’ll most likely have to pay the deductible. A deductible is a one-time, lump-sum that must be paid before the insurance company will pick up the rest of the tab.
Liability insurance is all about covering the expenses of others that were involved in the accident. It doesn’t cover damage to your own vehicle. The auto insurance deductible is there to help you handle the cost of an accident. Instead of paying the full cost of repairs, in most cases you only have to pay the deductible and the insurance company handles the rest.
The good news is if you are involved in an accident and the at-fault driver is uninsured you may not have to pay the deductible. The California Deductible Waiver option is available to drivers who get collision coverage in addition to liability insurance. For a few dollars more a month the waiver can help you save hundreds or thousands of dollars if someone without insurance hits you because you won’t have to pay the deductible.
For more information on the top insurance providers in California, check out our post comparing insurance providers in the Golden State. Finally, if you're trying to save money on your car insurance, here are some money hacks that can save you $600 on car insurance - especially if you're a teen driver or have a new teen driver in the house.
*This article was updated on 2/5/21.