Living costs and auto insurance in California are unfortunately one the highest in the country. This is certainly not good news and the problems are more obvious in larger cities where premiums are much higher in comparison with suburbs. If you have a limited budget it is hard to find a place to live, pay for living costs and buy car insurance in places like Los Angeles.
People likes their cars here especially expensive foreign ones like BMWs. Latest figures show that there is a drop in Uninsured Drivers in CA partly thanks to state low cost auto insurance provisions and measures. If you are in the low income bracket you are probably struggling to pay for premiums and therefore benefit from this state program. If you cannot qualify due to higher household income you still can get lowest prices by shopping around.
California Car Insurance Laws
Mandatory level of liability coverage for private passenger vehicles in CA are:
- $15,000 for bodily injury or death per person.
- $30,000 total for bodily injury or death per accident.
- $5,000 for property damage.
Read more Financial Responsibility requirements at Department of Motor Vehicles.
It is one of the states with most cars on the roads. This means that you have more chance of involving in an accident. Accidents are hard to predict. But with a good cover you can be sure to handle the stress a lot better. One of the benefits of buying car insurance is that it offers you peace of mind, just in case something happens to your car or you cause an accident, injuring other people. The least you could do is to meet their medical expenses and pay for their losses.
California is one of the only three states that don’t allow credit check for insurance purposes. The other two states are Hawaii and Massachusetts. Your zip code is considered in premium calculations, but it is not as influential as in other states. Vehicle insurers mainly look at your age, driving record and yearly mileage when giving you a quote. This may work out well for you if you have a good driving record. But your excellent credit score cannot bail you out just after an accident and therefore your rates can go up a lot more than most other states. See how much does insurance go up after accident?
Nonetheless, every insurer has its own risk assessment method. That is why premium quotes vary significantly depending on the insurer quoting. You may have to pay twice more than what you should pay if you don’t shop around and end up with the most expensive insurer.
The Golden State is located on the West Coast of the USA. It is the most populous state, home to one out of eight people who live in the U.S., with a total of 39 million people, and it is the third largest state by area (after Alaska and Texas). It is home to the nation’s second and fifth most populous census statistical areas (Greater Los Angeles Area and San Francisco Bay Area), and eight of the nation’s 50 most populated cities (Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, and Oakland). Sacramento is the state capital, and has been since 1854.
Los Angeles is one of the most congested cities in the country. Traffic is often in standstill and even worse during rush hour. That is one of the contributing factors to high premiums along with auto theft and vandalism. Los Angeles auto insurance rates are about 40% higher than the already expensive California average. Even thought it may be difficult, you should try to find a good policy to insure your automobiles and be honest with your insurer. Things like giving a different address than the one you are living can cause serious problems when you have a claim and it is illegal. A recent story on the papers shows that insurers are going to press charges against drivers who knowingly misleads them in order to get cheaper premiums.
How Much Does Car Insurance Cost in California?
There are nearly 25 million licensed drivers in the Golden State that can often cause gridlocks on the major roads, especially in and around metropolitan areas. With congestion and dense living comes traffic accidents, auto crimes and high rates. In that sense, it follows the norms with reasonably high average cost of car insurance at $783, $58 less than the US average. This is the figure for average premium expenditure per vehicle. High premiums are more obvious when you look at full coverage car insurance quotes. The average estimated full coverage cost is $1,752, which is 32% higher than the national average.
There is nearly $1,000 difference between the average premium expenditure per vehicle and average estimated full coverage cost. This usually suggest that large number of policyholders have variations of liability only car insurance coverage. Considering the state has the third highest average earnings this is a surprising finding. People with higher income tend to buy expensive cars and full coverage as a result. The only explanation is that wealth isn’t spread nicely as the rich is super rich and those rich people increase the average income. This makes average Californian look richer on the paper than in reality. Working class people are known to struggle with higher premiums. That is why the state has low cost auto insurance program.
Cheapest Car Insurance Companies in California
Premiums can vary widely among cities. The premium difference between the cheapest and most expensive city is about 60%. The most expensive cities are Glendale, Inglewood and Los Angeles. Each city premium average is over 40% more than the state average, with Glendale being the worst with 60%. However, you can find affordable prices even in those expensive cities if you know where to look. For example, the companies below can save you some money.
- Amica Mutual, $834
- Sterling Casualty, $905
- Affirmative, $913
It is worth reminding again that any of the above companies may disappear further down the list and replaced by other insurers by the time you need a quote. By all means you should start with those insurers but they should never be the only companies you get quotes from. You should always compare quotes no matter where you live.