California is one of the most affordable states for car insurance, but there is still the question of which auto insurance company is right for you. With some careful shopping, you can save yourself a pretty penny in no time.
When shopping for your policy, remember that little factors affect the way your quote is calculated. Everything from your ZIP code to your age and credit score can significantly impact the quote you receive, making it paramount that you explore your options. You’ll be grateful for having spent the extra time researching all of the possibilities for the best possible loan.
Compare Affordable Car Insurance Rates in 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.
|Company||J.D. Power Ranking||AM Best Financial Rating||BBB Rating|
|State Farm||4/5||A++ (Superior)||A|
- Esurance – $1,196
- USAA – $1,455.11
- Geico – $1,352.60
- Allstate – $1,683.12
- State Farm – $2,029.13
Allstate: Best for students and young drivers
Allstate has all the coverage options you’d expect and a few add-ons to give you extra peace of mind such as sound system and towing coverage. Allstate has a long list of discounts for car safety features, policy bundling, early signing, paying your premium in full, having a new car, signing up for paperless billing, and more.
Additionally, Allstate offers a great discount for good students, which is why we recommend this provider for students and young drivers. Any student who is not married and younger than 25 can qualify for the discount if they have a B- grade average, or have a GPA of at least 2.7. College students who attend school at least 100 miles away from their home, and don’t take their car with them, are also eligible for a discount.
Esurance: Best for customizable coverage options
Esurance is a good option if you want to build your policy and customize it to your needs, which is why we recommend this company to drivers who want personalized coverage. Esurance has a streamlined quote system and lots of add-on options like gap insurance, custom equipment coverage, personal injury protection, rental car coverage and roadside assistance.
Esurance doesn’t offer as many discounts as some of its competitors, but there are ways drivers can save. The company claims that drivers who switch to Esurance save an average of $462 per year. Additionally, the company offers a Fast 5® discount for 5% off your first-term premium and a paid-in-full discount on your entire plan. The DriveSense discount also rewards safe drivers with a lower rate.
Geico: Best for cheap insurance policies
Geico is one of the most popular car insurance companies because of the low rates and discount options. That’s why Geico is our top pick for drivers looking for the cheapest possible car insurance policy. Because of the low rates, Geico is a good option for people with a low credit score, drivers with a history of claims, or anyone else who is considered a high-risk driver.
Geico offers discounts for safe driving, good students, members of the military, senior drivers, and federal employees. Additionally, drivers who have certain safety features installed in their car, like anti-lock brakes, an anti-theft device, and airbags can save money on their insurance. If you’re at least five years accident-free, you also qualify for savings.
State Farm: Best for discounts
State Farm is known for its customer service and coverage options, but it doesn’t always have the best prices. However, State Farm offers a vast number of discounts that can help drivers lower their insurance premium. Any driver who wants to save money through discounts should look into State Farm.
Some of the discounts that drivers can take advantage of include policy bundling, safe driving, being a student away at school, taking a defensive driving course, being accident-free, being a good driver, being a good student, having an anti-theft device in the car, insuring multiple vehicles and more.
USAA: Best for customer service
USAA is an auto insurance company that exclusively serves the military and their families. The company is consistently rated as one of the best insurance providers across the board. Part of that is due to the exceptional customer service. If you qualify for USAA, and look for great customer service and a personalized customer experience, USAA is the way to go. It usually has the least expensive auto insurance rates for people who are eligible, and it has some discounts to lower the cost even more.
USAA offers car insurance discounts for safe drivers, good students, taking a defensive driving course, insuring a new vehicle, insuring multiple cars, and storing an insured car. The company also offers a family discount, military installation discount, and length of membership savings.
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.
Frequently asked questions
Why are California’s rates so expensive?
While there is a bevy of different factors at play here, the high urban population of the state contributes to its higher rates. More urbanized states tend to have more car accidents and thefts, and California is no exception. There have also been significant weather-related events, such as wildfires, which have prompted insurance companies across the board to raise their rates in response.
What if I’m not a full-time California resident?
To purchase insurance in the state of California, you must either be a resident or prove that your vehicle is principally garaged within the state. An exemption applies to those with active military status.
Do I need collision or comprehensive coverage?
When considering more than the minimum coverage, collision and comprehensive insurance are a critical part of your policy. Factors like your driving style and where you live can determine whether you are at high risk for an accident.
Collision insurance protects you when your vehicle hits an object or another car. It can also apply if your vehicle is damaged from road conditions, like potholes. Comprehensive insurance, on the other hand, covers a wide variety of damages. It applies if you hit a deer or a tree branch falls on your car. Vandalism and theft are covered, and you can also claim comprehensive insurance in the event of a natural disaster, such as California’s infamous wildfires. If you are more likely to have one kind of accident over another, that can help determine your type of insurance.
Is California a no-fault state?
In a no-fault state, your car insurance will cover your vehicle damages and medical expenses, regardless of who causes the accident. However, California is considered a fault state, so the person that causes the accident is responsible for the damages. Because of that, drivers in California are required to carry a higher amount of car insurance than drivers in no-fault states. Drivers in no-fault states are required to have personal injury protection (PIP) insurance, which essentially takes the place of bodily injury coverage.
What is SR-22 insurance?
An SR-22 policy is required for a few different reasons, such as those who had an accident without insurance or have a DUI or DWI on their record. It also applies if you have multiple traffic violations over a short period. The SR-22 should remain on your policy until otherwise ordered by the court.
In these instances, SR-22 insurance may be required for the driver to remain licensed. It is a policy that you can purchase from your regular insurance provider, but it is a longer and more expensive process because of the extensive paperwork required.
Our Car Insurance Rates
We used insurance rates from Quadrant Information Services. This includes analyzing thousands of rates from all 50 states that were publicly sourced from 2019 insurer filings. Rates are based on a 30-year-old male or female that had a clean driving record. Full Coverage premiums assumed a $500 collision and comprehensive deductible, and we looked at those who had both good and poor credit. These rates should be used to inform your car insurance shopping process, but your own quote may differ.