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Best Car Insurance California
Our top 5 picks for the best cheap car insurance in California
With so many options available today, it can be overwhelming. Some companies may work better for your needs with exclusive programs and discounts they may offer. Cost is just one factor when considering the best California car insurance for you.
We examined the options for California’s best cheap car insurance, taking into consideration their J.D. Power Ranking, which conveys customer satisfaction, and their AM Best placement, which judges the company’s financial stability.
These companies stand out for their exceptional customer support, a high financial rating and strong financial stability. All the companies on our list offer a safe driving discount, and most offer special pricing for the college student in your household. Many companies also offer exclusive discounts that apply to your car insurance policy.
J.D. Power conducts incredibly thorough customer service satisfaction surveys. Each of these companies possess a J.D. Power rating of “better than most” or higher within the California region. These companies also have earned favorable ratings from AM Best, which examines an insurance company’s financial viability and assigns it a score.
The combination of high scores from J.D. Power and AM Best will help you determine an insurance company’s reliability in case of loss. If you find yourself in a predicament one day, you don’t want to be stuck with an unresponsive insurance company.
|SimpleScore||J.D. Power Rating||AM Best Rating||S&P Rating|
- Esurance – $1,196
- USAA – $1,455.11
- Geico – $1,352.60
- Allstate – $1,683.12
- State Farm – $2,029.13
California car insurance cost
California is the most populous state, with 58 counties and hundreds of cities and towns. Because of that, car insurance rates vary by city. For instance, Los Angeles residents pay an average of $2,569.02 per year for car insurance, which is well above the state-wide average of $1,792.67. But in nearby Long Beach, the rate is much lower at $1,963.35. In San Diego, the average car insurance premium costs $1,700.57, and in San Francisco, the rate is $2,053.40.
How are car insurance rates determined in California?
Each state has different requirements for drivers and these impact your car insurance policy. It is essential to know the laws and requirements for your specific state because you may be eligible for additional savings. Here are some things to know about in California.
In California, drivers benefit from Proposition 103, which is legislation that prohibits insurance companies from raising insurance rates without legal approval. The bill was passed in 1988 as a way to lower insurance rates across the state, which had skyrocketed due to consistent rate hikes that benefitted insurance companies. Since the bill was passed over 30 years ago, Proposition 103 has saved California drivers about $154 billion.
As part of Proposition 103, the state also created a Good Driver discount, that rewards safe drivers with lower car insurance premiums. To qualify, drivers must be a licensed driver without multiple points on your driving record for the last three years. You also cannot have been found at fault in an accident within the last three years that caused damage of $1,000 or more. Drivers who meet the Good Driver discount criteria can save 20% off their auto policy.
Other factors included in your rate
Regardless of whether you qualify for Proposition 103, other factors impact your car insurance policy can include:
- Your age
- Where you live
- The make and model of your car
- Your driving record
- How much you drive
Even your gender can affect your insurance, as studies have shown that women have fewer accidents and DUIs. The cheapest car insurance in California for you will depend on these factors.
California’s minimum coverage requirements for 2020
The most basic level of insurance coverage required for auto insurance in California is $15,000 for bodily injury per person, $30,000 for bodily injury per incident and $5,000 for property damage, also known as a 15/30/5 plan. When calculating your auto insurance policy, you also have the option of adding $1,000 for medical expenses.
If you do not have an insurance policy, California offers a special caveat that still allows you to operate your vehicle legally. Per state laws, California drivers have the choice of eliminating their auto insurance if they can prove their financial responsibility to the state.
Drivers must do one of the following to meet the requirement:
- Pay a $35,000 cash deposit with the California Department of Motor Vehicles (DMV)
- Receive a Certificate of Self-Insurance from the California DMV
- Possess a $35,000 surety bond from a licensed California company.
Shop for a new policy every couple of years
Many companies will offer loyalty discounts to long-time customers, so most customers don’t look for another insurance provider. However, other companies could provide greater deductions that substantially reduce your costs for California auto insurance.
Until recently, it was legal in California for car insurance companies to set their rates by their own criteria. Risk factors could include an instance where a company would upcharge your policy if they think you might be willing to foot the bill. This practice is called price optimization, and it was a popular practice used by nearly half of insurance companies. Some carriers used extra data to determine price elasticity, using things like your social footprint and how long you’ve been with your cellphone carrier.
Basing your rates upon your complacency as a customer makes auto insurance less about protection and more about cost margin and increased profit. That comes at the price of the customer. Bob Hunter, the director of insurance for the Consumer Federation of America, refers to it as “profit maximization.”
Eighteen states, including California, have banned price optimization through official regulation. The California Department of Insurance issued a notice in February 2015, announcing that “any use of price optimization in the rate-making/pricing process or in a rating plan is unfairly discriminatory in violation of California law.”
Still, shopping around isn’t a bad idea. Some argue that loyalty discounts are more complicated than they seem. Not only do they incentivize you to remain with your current carrier despite rate hikes. Your rate might go up a lot, but the loyalty discount could make it appear cheaper than it is. Even though price optimization is illegal in California now, you could still be paying an optimized rate on a policy created before the law was made.
Check with your agent to ensure that you are not locked into price optimization with your current policy. By law, insurance agents are required to divulge that information so you can decide how comfortable you are with that company. Gather a few competitor quotes first, so you’re educated on the different options available to you. Your current company may offer to match pricing.
Keep in mind some factors could affect the cost of a different policy. For example, adding a new or teenage driver to your policy could increase your expenses. Your credit score can also affect your insurance rate. If your credit score is below 620, you may pay a higher price. Discounts like safe driving incentives can help to mitigate those costs.
Average cost of the minimum coverage in California
|Insurance Company||California Minimum Avg. Cost||California Min Monthly Avg. Cost||California Min Weekly Avg. Cost||CaliforniaMin Daily Avrg. Cost|
Average cost of full coverage per carrier in California
|Insurance Company||California Full Avg. Cost||California Full Monthly Avg. Cost||California Full Weekly Avg. Cost||California Full Daily Avrg. Cost|
Should I get more coverage than California’s required minimum?
With an average of six million accidents each year, you will likely have to file a claim in your lifetime. When that happens, you might want full coverage liability instead of minimum coverage. Even with a simple auto accident, it’s expected the other party will experience damages totaling more than $25,000. If the other vehicle has multiple passengers with injuries, costs could exceed $65,000 for damages to include medical bills, lost wages or lost income and pain and suffering.
In most cases, upgrading to a top-tier 50/100/50 plan isn’t as daunting as you might think. The extra coverage can add just a few hundred dollars, a drop in the bucket compared to out-of-pocket expenses in the event of an accident.
What is the California automobile assigned risk plan?
The California Automobile Assigned Risk Plan (CAARP) is a way for drivers who can’t get insurance or can’t afford insurance, to purchase affordable coverage. There are two plans available through CAARP—insurance for low-income residents, and insurance for high-risk drivers. The program was designed to ensure every California driver has access to insurance, regardless of their income level or driving history.
With CAARP, drivers who can’t get voluntary insurance are entered into a pool, and participating insurance companies will accept a certain number of drivers to insure. If you use CAARP for protection, there’s no guarantee that it will be cheaper than a regular policy. However, it does ensure that you will get coverage if you’re not able to get insurance on your own.