Before driving off the lot with your new wheels, you must purchase insurance that complies with California law. Finding cheap car insurance in California can depend on numerous factors, including your age, driving record and location.
According to the California Department of Motor Vehicles, there are over 27 million licensed drivers on the road. California has the highest population in the country, making it one of the busiest states for drivers. And in 2018, California was second only to Texas for motor vehicle deaths.
Because of this, auto insurance is important when driving in California, but you need to shop around before purchasing because while California car insurance isn’t the most expensive, it’s far from being the cheapest.
Here’s what you need to know about the best car insurance in California.
The top California car insurance companies
J.D. Power’s 2020 U.S. Auto Insurance Study ranked Wawanesa as the best car insurance California company, followed by Auto Club of Southern California Insurance Group (an AAA affiliate), State Farm, Ameriprise and Geico. The J.D. Power study uses a rating system and rates companies based on:
- Overall customer satisfaction
- Policy offerings
- Policy pricing
- Billing process and policy information
- Customer interaction
- Claims handling
Although USAA beat Wawanesa, it does not qualify for J.D. Power ranking because it only offers car insurance to military members and their families.
Requesting quotes can help you analyze costs, but also consider a company’s financial strength and performance because this indicates their ability to pay your claims.
|J.D. Power Rankings||A.M. Best Financial Rating||Better Business Bureau Rating|
|#1 Wawanesa||A+ (Superior)||A-|
|USAA||A++ (Superior)||Not rated|
|#2 Auto Club||Not rated||A+|
|#3 State Farm||A++ (Superior)||A|
|#4 Ameriprise||A (Excellent)||A+|
|#5 Geico||A++ (Superior)||A+|
Here’s what you should know about the companies offering the best auto insurance in California.
Wawanesa car insurance California gets high customer approval for its prices on car insurance — it’s one of the reasons the insurer ranks as the best auto insurance companies in California.
Wawanesa stands out for other reasons, too. It has a fully functioning mobile app, unlike other insurance companies, and it has a strong web presence. Other providers seem to post as little as possible online whereas Wawanesa does the opposite. It’s probably one of the most transparent insurance providers you can find.
It’s also one of the most coverage heavy providers out there. Take a look at the amount of coverage options available (10 options and counting).
USAA would take over Wawanesa’s first place ranking if everyone was eligible to join. Currently, USAA only accepts current and former military members and their spouses.
That said, USAA consistently scores 5 out of 5 in every J.D. Power rating year after year. It has low rates, multiple ways for its members to save and a variety of coverage options.
Probably the coolest thing about USAA is that it pays its members dividends each year it exceeds certain profit margins. You can get paid just for being a member.
Part of the reason Auto Club scores so well is that it offers a strong variety of discounts for its members. These discounts include: getting a discount for driving safely, insuring multiple cars or bundling with another insurance product.
One of the coolest things about Auto Club is that you can save even more by installing the AAAdrive app on your phone. The app will analyze your driving habits, and if it likes what it sees – meaning you score high on the safe driver scale – you can save even more on your premium.
State Farm provides a variety of insurance offerings including vehicle, homeowners and life insurance. The insurer has agents across the state ready to help you create the best California car insurance policy. They’re ready to answer any questions you may have and make sure you have the right amount of coverage.
Annual premium rates are a bit higher for home insurance California policyholders than other auto insurance companies, but the one-on-one service from a State Farm may make the slight upcharge worth it.
Ameriprise scores well because of its solid ratings across the board, making it a value-driven choice when you’re shopping for the best car insurance California policy.
Ameriprise offers a wide variety of discounts and has a few interesting benefits. Because it’s primarily sold through Costco, if you up your membership status you can get a windshield deductible waiver as well as accident travel expense coverage. Pay for Costco’s executive membership, and you can even get free roadside assistance and lifetime renewability — meaning Ameriprise will never cancel your policy.
Geico is a nationwide insurance provider, and as such is able to offer really competitive rates.
With Geico you can save by bundling another insurance product with your auto insurance, but you can also save by pursuing other discount opportunities (such as attending a driving safety course).
Geico’s mobile app allows you to manage everything to do with your policy . This includes updating or changing your policy, making a payment and even filing a claim.
Average car insurance cost in California
According to the Insurance Information Institute’s most recent study, residents pay an average of around $565.70 annually for liability coverage in California. Collision coverage averages just under $454 and comprehensive insurance around $96.
According to insure.com, California is the 6th most expensive state for auto insurance, with an average premium of $1,968.
The Department of Insurance offers a comparison tool to help you find the cheapest car insurance in California. Premiums vary widely among companies and rates can differ according to your driving record, how much you drive, your location, the number of years you have held a license and the make and model of your vehicle.
If you work in ridesharing through Uber or Lyft, or use your automobile for other business purposes, these factors can greatly influence your total auto insurance cost. In fact, they may even require you to have a separate policy.
Lots of things influence the high premiums in California.
For one, California has the highest population in the country, and a large number of those motorists are uninsured (currently 15.2% of California drivers don’t have insurance).
Secondly, if you live in a big city, such as LA or San Francisco, the chances of you filing a claim for theft or vandalism are higher than other parts of the country.
Lastly, because the cost of living is so high, many drivers are unable to pay for anything more than minimum liability. With drivers opting for so little coverage, companies have no choice but to raise premiums to retain profitability.
Minimum California car insurance coverage
California requires minimum liability insurance on all vehicles. The minimum coverage requirements include:
- All automobiles must have liability insurance.
- Liabilities policies must provide for at least $15,000 for the injury or death of one person and $30,000 for the injury or death of multiple people.
- Policies also must cover at least $5,000 worth of property damage.
California does not require drivers to carry comprehensive or collision insurance. However, if you finance an automobile, most banks require you to purchase standard coverage with a specified deductible. Check with your lender to see which requirements they impose.
Finding the right cheap car insurance in California for you
Finding the best car insurance in California may depend upon programs and policies tailored to you. Here’s how you can save through discounts, special programs, and more.
Car insurance discounts
Many companies offer discount options. For example, The Hartford offers a special program, which includes rate protection for AARP members. Here are some other possible discounts from providers.
Wawanesa car insurance offers discounts to:
- Good drivers with a clean driving record
- Youth or older drivers who are willing to take drivers improvement or training courses
- Loyal customers who continue insuring their cars year after year
Geico offers discounts for:
- Students who get good grades
- People with a good driving history
- Fraternity, sorority or honor society memberships
- Vehicle safety equipment
State Farm offers student discounts for:
- Ranking in the top 20% of their classes
- Making the honor roll
- Earning a 3.0 or higher grade point average
Esurance policyholders can earn several policy-related discounts for:
- Requesting an insurance quote on the Esurance website
- Bundling an existing home or motorcycle policy with automobile coverage
- Paying their entire premium in one payment
Car owners who choose Ameriprise coverage can earn discounts for:
- Maintaining a good driving record
- Taking a Department of Motor Vehicles-approved defensive driving course
- Purchasing vehicles that have safety equipment such as airbags, anti-lock brakes, and automatic seatbelts
Auto Club offers discounts for:
- Having an accident-free driving history
- Maintaining auto insurance with Auto Club for at least one year
- Earning good grades to qualify for a good student discount
California low-income car insurance
Qualified low-income residents can enjoy reduced premiums through California’s Low-Cost Automobile Program. The CLCA offers discounts on liability coverage only and bases premiums on age, household size, income and location.
A single man can qualify if he earns $31,900 or less, while a family of four can qualify with an income of $65,000 or less. A qualified driver over the age of 24 can buy coverage for $490 annually in Los Angeles or $321 in Alameda. It’s programs like these that help keep California competitive on the uninsured motorists list.
Geico rewards students with car insurance discounts for good grades, good driving records and fraternity, sorority or honor society membership.
California car insurance laws
California has some unique laws that other states don’t employ. These laws help make car insurance more accessible for certain drivers.
California automobile assigned risk plan
Created in 1947, this law helps drivers who would otherwise not qualify be able to get insurance. Basically, it prevents a catch-22 scenario from occurring— meaning, a driver is denied insurance from every provider, but his or her state still legally requires it.
Drivers with a history of at-fault traffic accidents or speeding tickets typically have difficulty finding car insurance. However, high-risk drivers can still qualify for insurance with the California Automobile Assigned Risk Plan. Insurance companies in the program charge the same premium for all policyholders and even offer installment plans.
California Proposition 103
Voted into law in 1988, California’s Proposition 103 bars insurance companies from rating car insurance policies based on a policyholder’s location and instead base it off of his or her driving record, years on the road and miles driven each year.
Frequently asked questions
How much is California car insurance?
Premium prices vary based on location and type of vehicle, as well as driver attributes, such as years licensed, age, reasons for driving and driving record.
Which auto insurance is best in California?
J.D. Power and Associates rank Esurance as California’s best auto insurance company. However, choosing a policy is subjective. Insurance companies offer various discounts, and some have special programs for senior citizens and students.
Does California require car owners to purchase insurance?
Yes. California drivers must hold a liability policy, which meets minimum death, injury and property damage coverage requirements.
Does California have a reduced rate program for low-income drivers?
Yes. California’s Low-Cost Automobile Program offers substantial savings on car insurance for drivers who meet income requirements.