Understanding the Average Cost of Car Insurance in California
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The average car insurance cost in California is $2,462 per year, exceeding the national average of $2,118. Car insurance is a mandatory and significant expense for California drivers, but costs can vary based on factors such as age, location, and driving history. The right information helps California drivers to make informed decisions that align with their needs and budgets and to pinpoint options for affordable auto insurance rates.
Introduction to Car Insurance in California
Car insurance in California is required for all drivers. The annual cost of your insurance premium will vary based on whether you have a clean driving record, any fault accidents, and other factors. While the average rate is approaching $2,500 per year, the cheapest rate for individual drivers can be considerably lower.
In addition, the California Low Cost Automobile (CLCA) Insurance program offers affordable liability insurance protection for drivers with a good driving record who meet income requirements. A household of one must make less than $32,200 per year, and a household of two must make no more than $43,550 annually. This state-sponsored program suffices for the state’s mandatory coverage car insurance law.
Key Factors Influencing Insurance Costs
The average cost of car insurance in California will vary based on the individual driver and other factors.
Driving Record
Not surprisingly, a clean driving record will support cheap car insurance better than a spotty one. Your auto insurance company will review your driving history to set rates for your coverage policy.
Vehicle Type and Age
Newer vehicles are more expensive to insure because replacement costs are that much higher for a brand-new car. In addition, car models that have more insurance claims, lower safety ratings, and a higher likelihood of causing damage are also more expensive to insure.
Credit Score
Insurance companies may review a driver's credit scores when determining insurance costs. A higher credit score will support a lower insurance premium based on a solid financial history.
Understanding the Average Cost of Car Insurance in California
The average cost of car insurance varies from state to state, with New York at the peak of high premium costs and Idaho at the valley. Each car insurance company sets its rate for each state based on factors such as minimum car insurance requirements, cost of repairs and healthcare, accident statistics, weather and traffic patterns, and more.
As a state with a high population and several major urban centers, California ranks high in many categories that drive up car insurance costs.
Factors Affecting Car Insurance Rates in California
Why is the average full-coverage car insurance cost in California so high? A number of factors at play lead to higher auto insurance rates:
- During the pandemic shutdown, California put a freeze on rate hikes; rate increases have been higher since the state lifted the freeze in 2023.
- People are driving more, which leads to more accidents and claims. In turn, vehicle repair costs and prices are going up.
- The latest technology in cars makes them more expensive to repair, which feeds into higher insurance premiums.
Clean Driving Records and Their Impact
In California, like in the other 49 states, a clean driving record goes a long way toward reducing insurance premiums. Auto insurance companies believe that a good driving record in the past is a positive indicator of a similar one in the years to come.
Fault Accidents: How They Influence Premiums
Getting in an accident will add about $350 to your annual premium across the United States, but it can be even higher in California, where annual premiums can nearly double following an at-fault accident. Safe driving pays off in many ways.
The Role of ZIP Code on Rates
In 1988, California passed Proposition 103, which restricts the use of ZIP codes in establishing auto insurance premiums. While your location may be one factor involved in pricing, driving records, car types, accidents, and other issues play a larger role.
Regional Rate Variations Across California
Auto insurance rates also vary based on region in California. The Los Angeles area, for instance, has the highest average car insurance premiums at more than $3,500, while San Diego has the lowest rates, at just over $1,710.
Money-Saving Tips on California Car Insurance
Fortunately, it is often possible to save money on your California auto insurance. These tips support more budget-friendly car insurance:
- Be a safe driver. When you practice safe driving and obey traffic laws, your car insurance rates are likely to stay in the lower range and you can also avoid expensive repairs or loss of your driver’s license.
- Look for discounts. You might be eligible for car insurance discounts if you purchase your insurance online, are an active or retired member of the military, drive an energy-efficient car, bundle your car insurance with home insurance or other forms of insurance, or enroll in autopay. Make sure you check on all potential insurance discounts.
- Compare rates. Ideally, an online rate comparison tool should compare three to five or more insurance companies so you can see the full picture. Likewise, make sure you compare rates annually, as your premium options may change based on your driving record and other factors.
Compare Car Insurance Rates for the Best Value
Comparing car insurance is always a winning strategy. When you’re looking for cheap car insurance in California, check out EverQuote to view insurance quotes side by side so you can find the best value for your needs.