Best priced car insurance company in california
- Search Affordable Car Insurance Options Near You
- Best Cheap Car Insurance Companies
- How I Chose the Best Cheap Car Insurance Companies
- Where to Find Car Insurance Discounts
- Major Car Insurance Types
- What types of car insurance do I really need?
- What car insurance is required in my state?
- Six Tips to Find Cheap Auto Insurance
- Search Affordable Car Insurance Options Near You
- It’s Time to Save on Car Insurance
- Search Affordable Car Insurance Options Near You
- California Car Insurance
- Car Insurance Requirements
- Proof of Insurance
- California's Proposition 103
- California's Low Cost Auto Insurance Program
- California's Automobile Claims Mediation Program
- Automobile Assigned Risk Plan
- California at a Glance
- Know What You Want
- Check for Reputation and Financial Standing
- Compare Car Insurance Quotes
- Periodically Evaluate Your Coverage
- Consider Working with an Agent or Broker
Getting the minimum amount of car insurance is risky business. However, not everyone can afford a bunch of additional coverage. And, some people might not need anything but the minimum. In those cases, having state-mandated coverage is far better (read: legal) than having no insurance at all.
But how do you find the cheapest rate? I examined over 250 quotes from 28 different companies and found three auto insurers that offer the most affordable policies anywhere in the country. Keep in mind, though, everyone’s individual rates will vary.
Search Affordable Car Insurance Options Near You
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.
Best Cheap Car Insurance Companies
- State Farm
How I Chose the Best Cheap Car Insurance Companies
First, I found the top five to seven insurance providers in each state by selecting companies with above-average customer satisfaction ratings from J.D. Power and high financial strength marks from A.M. Best. Why? Because cheap auto insurance policies are great, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.
Then, with some help from the team at The Simple Dollar, we applied for over 250 quotes both online and over the phone from my pool of auto insurance companies from all 50 states. Each member of the team used personal information during the quote process to ensure that we could see who was consistently cheapest across the country with a handful of scenarios. What did remain the same, however, was the amount coverage we applied for: each state’s minimum coverage. No frills, no extras; just the absolute minimum coverage to legally drive on the road.
Next, I tallied and compared how many times each company had the first, second, or third cheapest yearly premium. I awarded five points for first place, three points for second place, and one point for third place.
As it turns out, the cheap car insurance market is dominated by three main providers: GEICO, State Farm, and Progressive. (The other 25 insurers didn’t even score high enough to register in my test.) And, as you can see below, GEICO was the overwhelming victor.
|Insurer||# of 1st Place Awards||# of 2nd Place Awards||# of 3rd Place Awards||Total Score|
GEICO was the cheapest option in 19 of the 50 states. It was also one of the three most affordable options 75 percent of the time, and its best offer was often hundreds of dollars cheaper than the next-best competitor. Take these annual quotes for New York, Pennsylvania, and Washington for example.
|GEICO: $329||GEICO: $225||GEICO: $623|
|Allstate: $538||State Farm: $394||Allstate: $898|
*Note: Occasionally, the reason GEICO was able to beat its competition by such a large margin was because the other insurers required slightly more coverage than the state mandated.
The gecko-loving company is without a doubt the most consistently affordable option out there, so it deserves a shopper’s consideration. And, it’s true, according to my research, it is safe to say that 15 minutes could often save you “15 percent or more” on a state-minimum policy. However, its range of coverages and discounts don’t particularly shine when compared to a competitor like Allstate. Allstate customers enjoy prepay discounts, low-mileage discounts, interior vehicle coverage, and new car replacement — all of which are not offered at GEICO.
When it comes to customer service ratings, GEICO doesn’t have anything to write home about. (It fell just under the industry average according to JD Power.) But, if you’re dead-set on purchasing the least amount of insurance that you possibly need, then GEICO is your best bet.
State Farm had a lower overall score than GEICO, but wound up in the top three a total of 38 times (GEICO only placed 37 times). When State Farm placed, it usually fell between $30 to $50 dollars of the competition. Though, it occasionally would surprise me with a GEICO-like rate. The two best examples of this are Minnesota and South Carolina. In Minnesota, State Farm was $120 cheaper than American Family, and in South Carolina it beat GEICO by a whopping $223.
Quotes aside, State Farm is the nation’s largest auto insurer. It ranks consistently well for customer satisfaction and rates above average in most of the regions of the J.D. Power survey. It also earns A.M. Best’s top marks (A++) for financial strength. All that’s to say it is a great choice if you can spare a few extra dollars each month. Plus, it has the best tools of any auto insurance provider out there, including mobile bill pay, mobile claim filing, and a pay-by-bank account option.
Progressive only placed 1st in seven states, and when it did, it was usually less than $20 ahead of the runner-up (which was usually GEICO). That doesn’t mean Progressive is never a viable option, though. Consider the state of Montana, where Progressive came in $22 cheaper for the year. So for less than $2 more each month, a Montana driver could take advantage of mobile claims filing, loyalty discounts, prepay discounts, and low-mileage discounts that GEICO doesn’t offer.
Where to Find Car Insurance Discounts
Once you’ve seen some quotes, you need to master discounts — the key to cheap car insurance rates. Many insurers have a wide variety of overlooked deductions that go beyond bundling or insuring multiple vehicles, and some of them are less obvious than you may think.
Driving education is a discount opportunity many don’t know exist. Drivers who pass an accredited driver’s ed class or defensive driving training are eligible for a sizeable price reduction. The amount of this discount isn’t standardized across the nation or with insurers, but according to DriversEd.com, some drivers might welcome as much as a 10% decrease in their bill. Plus, if you’ve recently received a ticket, enrolling in a defensive driving course can prevent the premium hike on your insurance (most companies only let you do this once every 12 months).
Defensive driving courses cover topics such as traffic laws, drug- and alcohol-impaired driving, and inclement-weather driving and are often available online or at commercial driving schools. Courses for defensive driving can be found through your local DMV or community center. Most run about six hours long and cost anywhere from $50 to $300 a person.
After completing a defensive driving course, participants will receive a certificate that can be presented to insurance companies to qualify for a discount. Depending on the insurance company, drivers may also have to retake the course and be current on their certification in order to continue receiving the discount.
If you aren’t the only person covered on your auto policy, consider getting all the drivers on your policy — especially teens, as they are expensive to insure — to take a defensive driving course and you will be eligible for additional discounts.
Good Student Discounts
These discounts are typically given to drivers under the age of 25 who are enrolled full time at a high school or college or university and are maintaining at least a 3.0 grade point average (or are on the honor roll or dean’s list).
What about the savings? According to CarInsurance.com, the discount can range anywhere from 5% to 10%, making it one of the most profitable and achievable discounts of all. Consider Travelers, which offers good students up to 8% off.
In order to prove satisfactory academic achievement and receive the discount, students need a current transcript or a letter signed by a school administrator. Students who are homeschooled can present standardized test results, such as their SAT or ACT scores, that are within a desired percentile range in order to qualify. Good grades can continue saving you money after graduation as some insurance companies extend this discount to post-grads for a limited time.
If you’re a student, or the parent of a student, you can learn even more at The Simple Dollar’s student guide to car insurance.
Drivers with a clean driving record — a standard that is determined by each individual insurance provider — are eligible for hefty discounts. Having a squeaky clean record not only gives you a discount opportunity; it can also save you a lot more money in the short term.
There is no universal definition of safe driving, though. Insurance companies generally mean avoiding collisions and accidents for which you can be found at fault, and moving violations such as speeding, driving under the influence, or reckless driving.
Resident student discounts
These discounts can be offered to students attending college more than 100 miles away from home. They are intended to be used exclusively by those students who are not planning to drive the insured vehicle while at school but may use it while they are home for vacations.
Other Discounts to Consider
- Active-duty military and veterans discounts
- Car alarm systems or other safety equipment discounts
- Paid-in-full or prepay discounts
- Occupation and member discounts
- Low mileage discounts
One of the most important things you can do while shopping is to ask the insurance company for a complete list of discounts because not all may be advertised.
Major Car Insurance Types
Though companies offer several more nuanced options and add-ons, the three major types of auto insurance boil down to:
- Liability coverage
- Collision coverage
- Comprehensive coverage
Liability coverage, required by law in most states, covers the other driver’s personal injury and property damage in a crash where you’re found to be at fault. It does not cover your own injuries or property damage. Buying only liability insurance is always going to be your cheapest option, though not necessarily the wisest. (Sometimes it makes sense to carry only liability coverage, and sometimes it doesn’t.)
You’ll probably see your liability coverage written like this on your quote or car insurance policy: $50,000/$100,000/$50,000 (or 50/100/50). That means you have $50,000 in bodily injury coverage for each person, $100,000 in bodily injury coverage total, and $50,000 in coverage for property damage. Each state requires its own minimum amount of liability insurance.
Buying the bare minimum is tempting since it will keep your rates as low as possible. Unfortunately, that’s a bad idea — a bad crash can mean your costs will easily surpass low state minimums, and then you’ll have to pay up. In North Carolina for example, its minimum for bodily injury is $30,000, but the average cost of a non-fatal disabling auto-wreck injury is over $60,000. If you only have the state’s minimum coverage, you could wind up paying over $30,000 out of pocket. And if you don’t have that kind of money laying around, your other assets become vulnerable.
Collision coverage covers the damage to your car sustained in a crash. This most commonly covers accidents when you’re found to be at fault, but it may also pay in certain circumstances when another driver is at fault, or in scenarios not covered under your other policies.
The cost of your collision coverage will largely depend on your car’s value, but you do control the deductible — the amount you pay out of pocket before your insurance company picks up the rest of the tab.
True to its name, comprehensive car insurance covers almost any car-related calamity you can think of minus damage resulting from a crash. Instead, comprehensive policies pay for things like auto theft, damage from severe weather, or needed repairs after a late-night rendezvous with a disoriented deer.
Comprehensive coverage is meant to complement collision coverage, not replace it. Like collision coverage, the cost will depend on your car, but you control your deductible.
What types of car insurance do I really need?
Comprehensive and collision coverage seem like a smart choice, but they come with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. Dropping this coverage usually isn’t a good idea for anyone without the savings to pay for repairs out of pocket.
But, there are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that you can easily fix or replace, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on any car you drive sparingly.
To see how much I would save on auto insurance by nixing all coverage but liability, I plugged a few stats into a quote generator. I used the persona of a married male in his early 30s driving a paid-off 2011 Hyundai Sonata. I said he lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year. A policy with 50/100/50 in liability, as well as comprehensive and collision policies with $250 deductibles, would set him back $45 a month. Dropping the comprehensive and collision policies would bring my bill down to just $24 a month — almost half the the cost.
Would I personally drop my comprehensive and collision policies? No, because my 2013 Jeep Patriot is still relatively new and would cost a significant sum to repair or replace. My brother, however, drives a 1984 Ford F150. At best, it’s worth around $3,000 — and his policy is only $19 a month! For him, dropping comprehensive and collision coverage made a lot more sense.
The bottom line: Liability coverage is your cheapest option and meets the legal requirement, but dropping collision and comprehensive coverage might be a risky move if it would be a major financial hardship to fix or replace your car after an accident.
Add-Ons and Other Types of Coverages
There are a number of other coverage types and add-ons, some of which may be required in certain states. Of particular note is personal injury protection, which pays your medical expenses after a crash.
If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies.
There are also uninsured and underinsured motorist coverages, which get you off the hook after a crash where the other driver is at fault but doesn’t carry enough (or any) insurance and can’t afford to pay. Other add-ons pay for rental cars while your car is being fixed and for roadside assistance.
As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam), rental-car riders are unnecessary, and a AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.
What car insurance is required in my state?
Each state has different requirements when it comes to car insurance. Many simply require liability insurance (both bodily injury and property damage). Others go a step or two further, requiring add-ons such as personal injury protection and uninsured or underinsured motorist coverage. Visit the table below and locate your state to find your state’s requirements.
According to the Insurance Information Institute, here are the kinds of insurance each state requires as of September 2015, as well as the minimum required amounts of liability insurance. The only state that does not require liability insurance is New Hampshire; however, that state still mandates that you show you have sufficient funds to meet state requirements if you’re at fault in a crash.
|Types of insurance required||Minimum required liability insurance|
|Alabama||Bodily injury liability, property damage liability||25/50/25|
|Alaska||Bodily injury liability, property damage liability||50/100/25|
|Arizona||Bodily injury liability, property damage liability||15/30/10|
|Arkansas||Bodily injury liability, property damage liability, personal injury protection||25/50/25|
|California||Bodily injury liability, property damage liability||15/30/5|
|Colorado||Bodily injury liability, property damage liability||25/50/15|
|Connecticut||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||20/40/10|
|Delaware||Bodily injury liability, property damage liability, personal injury protection||15/30/10|
|District of Columbia||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist||25/50/10|
|Florida||Property damage liability, personal injury protection||10/20/10|
|Georgia||Bodily injury liability, property damage liability||25/50/25|
|Hawaii||Bodily injury liability, property damage liability, personal injury protection||20/40/10|
|Idaho||Bodily injury liability, property damage liability||25/50/15|
|Illinois||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/20|
|Indiana||Bodily injury liability, property damage liability||25/50/10|
|Iowa||Bodily injury liability, property damage liability||20/40/15|
|Kansas||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/10|
|Kentucky||Bodily injury liability, property damage liability, personal injury protection||25/50/10|
|Louisiana||Bodily injury liability, property damage liability||15/30/25|
|Maine||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, medical payments||50/100/25|
|Maryland||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||30/60/15|
|Massachusetts||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||20/40/5|
|Michigan||Bodily injury liability, property damage liability, personal injury protection||20/40/10|
|Minnesota||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist||30/60/10|
|Mississippi||Bodily injury liability, property damage liability||25/50/25|
|Missouri||Bodily injury liability, property damage liability, uninsured motorist||25/50/10|
|Montana||Bodily injury liability, property damage liability||25/50/10|
|Nebraska||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/25|
|Nevada||Bodily injury liability, property damage liability||15/30/10|
|New Hampshire||Uninsured motorist, underinsured motorist, medical payments||25/50/25 (minimum available in NH, but not required by state law if you show sufficient funds)|
|New Mexico||Bodily injury liability, property damage liability||25/50/10|
|New York||Bodily injury liability, property damage liability, personal injury protection, uninsured motorist,wrongful death||25/50/10|
|North Carolina||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||30/60/25|
|Ohio||Bodily injury liability, property damage liability||25/50/25|
|Oklahoma||Bodily injury liability, property damage liability||25/50/25|
|Pennsylvania||Bodily injury liability, property damage liability, personal injury protection||15/30/5|
|Rhode Island||Bodily injury liability, property damage liability||25/50/25|
|South Carolina||Bodily injury liability, property damage liability, uninsured motorist||25/50/25|
|South Dakota||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/25|
|Tennessee||Bodily injury liability, property damage liability||25/50/15|
|Texas||Bodily injury liability, property damage liability||30/60/25|
|Utah||Bodily injury liability, property damage liability, personal injury protection||25/65/15|
|Vermont||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/10|
|Virginia||Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist||25/50/20|
|Washington||Bodily injury liability, property damage liability||25/50/10|
|West Virginia||Bodily injury liability, property damage liability, uninsured motorist||25/40/10|
|Wisconsin||Bodily injury liability, property damage liability, uninsured motorist||25/50/10|
|Wyoming||Bodily injury liability, property damage liability||25/50/20|
Six Tips to Find Cheap Auto Insurance
Certain factors that affect your car insurance rates are largely beyond your control. These include basic demographics such as your age, gender, marital status, location, and job.
But other factors, including what and how you drive, are easier to change. So, comparison shop, exploit discounts, and consider bundling policies to find the cheapest car insurance companies, too.
It’s a no-brainer, but it always pays to shop around for cheaper car insurance. Instead of wasting time making endless phone calls or filling out the same information on dozens of websites, save time by using an online quote tool. Online quote tools help you get a quick snapshot of potential rates from several auto-insurance companies at once.
More importantly, getting multiple auto insurance quotes helps you avoid becoming a victim to something called price optimization. Price optimization is the devious practice of of establishing rates based upon how much insurance companies think customers are comfortable paying.
Earnix, a pricing analytics platform, found that 45% of larger insurance companies use this tactic to maximize their profits. These insurers mine and analyze a ton of personal data, like credit scores and web shopping habits, to determine how likely you are to leave them for another auto insurance company. The bottom line is this: Auto insurance companies are going to charge you based upon how much money they believe they can comfortably squeeze from your pocket, not who you are as a driver.
Getting new quotes on the regular is the best way to avoid price optimization because, just like other personal data, insurers can see how often you shop around. The more you do it, the less likely they are to risk upping your premium and lose you as a customer.
Search Affordable Car Insurance Options Near You
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.
Many car insurance companies will give you a discount if you have other policies with them. For instance, you may get a break on car insurance if you use the same provider for life, home, or renter’s policies. Bundled policies are convenient, too; you’ll be dealing with only one bill and one company.
A note of caution: Don’t automatically assume bundles will save you money. Companies that offer only auto insurance may offer compelling discounts to keep your business. Sometimes that means you get cheaper car insurance if you keep policies with separate insurers.
Boost Your Deductible
Your deductible is what you pay out of pocket before your insurance covers the rest of the cost to fix or replace your car. A plan with a $250 deductible will generally cost more than one with a $1,000 deductible.
For a real-world example, I plugged my mock persona into a quote generator from Progressive, changing only the deductible to see how it would affect my rate. As mentioned earlier, I used a married male in his early 30s driving a 2011 Hyundai Sonata. He lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year.
With a $100 deductible on comprehensive and collision coverage, he would pay roughly $120 a month. Raising that deductible to $250 brought the bill down to about $100 a month. A $500 deductible reduced the monthly bill to $90, and a $1,000 deductible pushed it all the way down to $82. That means he could save $456 a year by choosing the $1,000 deductible instead of the $100 deductible — not a bad sum.
However, raising your deductible is only a good move if you have cash stashed away to pay the higher deductible in case of a crash or other calamity. Also keep in mind that factors such as your age and driving record will affect how much raising your deductible will actually save you.
Drive a Low-Risk Car
Luxury cars are always the most expensive to insure. These cars have the power to go extremely fast, and insurance companies know their drivers are more likely to get into trouble. These cars also cost a lot more to fix and are attractive targets for thieves — all situations your insurance company wants to avoid.
The most expensive 2015 car to insure, the 600-horsepower Nissan GT-R Nismo, will set you back about $3,574 a year in car insurance, according to Insure.com. Right behind it are a slew of high-powered or luxury rides including the Mercedes-Benz SL65 AMG Convertible, Dodge SRT Viper, Porsche 911 Carrera S Cabriolet, and Audi R8 5.2 Spyder Quattro, all of which still top $3,000 a year.
If you don’t have six figures to drop on a car, here’s some good news: Family-friendly vehicles including minivans, sedans, and smaller SUVs cost the least to insure. Their drivers tend to be more careful, ultimately filing fewer claims. These vehicles are simpler to fix and they aren’t quite as tempting for thieves.
The cheapest car to insure, the Jeep Wrangler Sport, will set you back only about $1,134 a year in premiums. The Jeep Patriot Sport, Honda CR-V LX, Dodge Journey SXT, and Honda Odyssey EX-L are similarly easy on the wallet.
Ultimately, the choice is yours, but a less-glamorous ride can help you nab cheap auto insurance.
Change Your Driving Habits
Insurance is all about risk. If you get a speeding ticket every month, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Unfortunately, cleaning up a spotty driving record can take time.
Driving less is the simplest, easiest way to change your driving habits. Consider your options carefully: Can you carpool? Work from home? Use mass transit or even move closer to your job? All of these options can help you save since less time behind the wheel means less chance of a claim. Be sure to tell your insurer about your new habits.
Maintain Good Credit
It may seem unfair, but the vast majority of car insurance companies look at your credit score to help determine your rate. If you have good credit, your insurer assumes you’ll be more responsible behind the wheel. Bad credit means you’re statistically more likely to file a claim, insurers say.
According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay double, triple, or even quadruple over someone with a perfect credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland, and Massachusetts. If you don’t live in those states, you’ll want to work on your credit score in your quest for cheap auto insurance.
It’s Time to Save on Car Insurance
A little legwork now can save you big in the long run, so remember to re-evaluate your car insurance at least annually. Your own changing circumstances and old-fashioned competition between insurers always has the potential to hook you a cheap car insurance policy.
Search Affordable Car Insurance Options Near You
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.
California Car Insurance
Are you shopping for affordable car insurance quotes? California insurance companies are required to offer you a good driver's discount if you have a clean driving record. Read more to learn about California car insurance rates, laws, and programs.
Car Insurance Requirements
California law requires that you have a way to cover costs related to damages or injuries you may have caused in a car accident. Purchasing liability car insurance is the simplest and most common way people choose to meet this requirement.
The minimum amount of liability insurance you must have on your policy is:
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Other Car Insurance Coverage
While liability coverage is the only type of car insurance coverage you are required to carry in California, there are several other types of coverage available to you, including:
- Comprehensive coverage – This coverage insures you against damages that might occur to your car that do not involve traffic accidents such as theft-related damage.
- Collision coverage – This insures you against damages to your car that occur as a result of a traffic collision such as an accident with another driver.
- Medical and funeral services coverage.
- Uninsured/Underinsured motorist coverage – According to the latest statistics from the California Department of Insurance (CDI), in 2004, 14.43% of California drivers had no car insurance. Uninsured/underinsured coverage can cover damages caused by one of these drivers.
- Rental car coverage.
- Towing and labor coverage.
Note: Adding comprehensive and/or collision coverage is generally optional. However, if your car is being financed, your lending or leasing company will require you to purchase comprehensive and collision coverage.
Other Forms of Financial Responsibility
Buying car insurance is the most common way to fulfill your financial responsibility requirements, but it isn't your only option.
Other options to meet the requirement include:
- A $35,000 cash deposit with the CA Department of Motor Vehicles.
- A Certificate of Self-Insurance from the DMV.
- A surety bond of $35,000 from any company licensed to do business in CA.
Proof of Insurance
You must be able to prove you have auto insurance to register your car or renew your registration. Your insurance company will give you an insurance card that can serve as your proof of insurance. Your car insurance card will have:
- Your car's information.
- Safety rating.
- Your name and the name of any other drivers under your car's policy.
- The expiration date of your insurance policy's term.
You will receive a new card every time you renew your car insurance policy.
Additionally, insurance companies in California are required to electronically report your insurance information to the DMV. The California DMV can use these electronic records to verify that you have car insurance.
Getting Pulled Over in California
If you are pulled over by a police officer, you must show your proof of insurance, along with your driver's license and car registration.
Violation Fines and Penalties
If you are pulled over in California without proof of car insurance or any other form of financial responsibility, you may face the following fines:
- $100 - $200 for your first offense.
- $200 - $500 for each offense within 3 years after your first.
The court may impound your car and hold it until you are able to show a proof of insurance.
Not having car insurance in California can also result in a suspension of your car's registration if:
- The CA DMV is notified of your insurance cancellation and you have not replaced it within 45 days.
- Your car insurance information is not given to the DMV within 30 days of your car's initial registration or transfer of ownership.
- You registered your car with false evidence of insurance.
The DMV will send you a letter if your registration has been suspended due to not having car insurance. You can re-register your car with a proof of insurance at the cost of $14. You can apply for reinstatement:
- Online at the DMV's Vehicle Registration Suspensions Insurance Program page.
- By mail with your notification letter to: DMV PO Box 997405 Sacramento, CA 95899
- By mail without a notification letter to: DMV VRFRP Unit PO Box 997408 N305 Sacramento, CA 95899-7408
- By phone at (800) 777-0133.
California's Proposition 103
Before 1988, California was among only a small handful of states that had no state-governed regulations on the insurance industry. As a result, California auto insurance rates kept climbing to levels that were not affordable to many people.
To combat what many saw as arbitrary insurance rates, Californians voted into law Prop 103 on November 8, 1988, which called for consumer-driven regulation on insurance companies.
Under Prop 103, insurance companies were required to cut their rates to 20% less than what they were in 1987. Any rate changes from that point would have to be approved by the California Department of Insurance.
Among the provisions of Prop 103 are rules regulating how insurance companies determine your car insurance premiums and the Good Driver Discount policy.
Good Driver Discount Policy
Because of Prop 103, California law requires insurance companies to offer a 20% discount to good drivers. You qualify for this Good Driver Discount policy in California if:
- You have been licensed to drive for the past 3 years.
- During the past 3 years you have not:
- Had more than 1 point on your driving record due to a violation(s).
- Taken traffic school because of a traffic violation more than once.
- Been the at-fault driver in an accident that resulted in injury or death.
Determining Your Insurance Premium: Credit Score
Prop 103 makes it illegal for insurance companies in California to use your credit history as a factor in determining the cost of your car insurance premium. Because of this, other factors may carry more weight.
These factors may include:
- Your driving record.
- Your age.
- Where you live.
- The make/model of your car.
- The purpose of your car (e.g., commuting or personal use).
California's Low Cost Auto Insurance Program
The Low Cost Automobile Insurance Program (CLCA) was established in California in 1999 to give income eligible drivers a way to get car insurance at an affordable price in order to combat the high number of low-income drivers without car insurance.
To qualify for the CLCA you must:
- Have a valid California driver's license.
- Own a car with a value of $25,000 or less.
- Be at least 19 years old.
- Meet the income requirements
California's Automobile Claims Mediation Program
If you have a dispute over a claim with your insurance carrier, you may be able to take advantage of California's Auto Claims Mediation Program, which provides a way to help settle claim disputes with the assistance of a third-party mediator at no cost to you.
You may be eligible for the program if the dispute with your insurance provider involves:
- The extent or amounts of damages.
- Methods of repair.
- Cause of damage.
- Prior damage vs. recent damage.
- Total loss.
- This is when an insurance company declares your car not repairable and reimburses you the estimated value of the car instead of repairing the car.
- Value of a total loss.
You are not eligible for the mediation program if the dispute involves the following issues:
- Coverage issues.
- Legal interpretations of your policy.
- Statute of limitations and contractual limitations on claim filing periods.
- Agent or broker actions.
For more information about CA's Auto Claims Mediation process, visit the CA Department of Insurance website.
Automobile Assigned Risk Plan
The California Automobile Assigned Risk Plan (CAARP) is a program to help get all drivers properly insured. If you cannot find a car insurance company, due to a poor driving record, you can apply for liability insurance through CAARP.
All California car insurance companies must accept a certain amount of CAARP applicants depending on their share of the market. The higher the amount of standard customers they have, the higher amount of CAARP applicants they must take.
Once you have a clean driving record for a consecutive 3 years, you can purchase your car insurance outside of CAARP.
California at a Glance
Electronic Insurance Cards
California's Vehicle Code states that if you do not have your car insurance card, you may be able to pull up your insurance information on your smartphone. Several car insurance carriers have smartphone apps that allow you to access an electronic insurance card.
Car Theft In California
California is the car theft capital of America. In 2011, according to a report issued by the California Highway patrol, 156,796 vehicles were stolen, at an estimated cost of one billion dollars.
Car Theft and Your Car insurance Rates
When calculating a policyholder's insurance rate, many car insurance companies consider the risk of car theft in a given area. Since car theft rates in California are high, you pay a higher rate.
California car theft hurts everyone that has car insurance. By educating yourself about the types of cars and trucks that are stolen and learning simple ways to prevent your car from being stolen, you're taking positive steps toward keeping car insurance rates low for everyone.
Most Stolen Cars in California
Driving a car that is often targeted for theft may increase your car insurance rates.
The following is a list of the most commonly stolen cars in California for 2013 according to www.nicb.org:
- Honda Accord.
- Honda Civic.
- Chevrolet Pickup (Full Size).
- Toyota Camry.
- Acura Integra.
- Ford Pickup (Full Size).
- Toyota Corolla.
- Nissan Sentra.
- Nissan Altima.
- Toyota Pickup.
According to the California DMV, every driver will be involved in a car accident at least once in their life, so you should be aware of how to handle such an incident.
When involved in an accident:
- Try your best to pull out of traffic and onto a safe spot at the side of the road.
- Never flee the scene. You may risk a hit-and-run conviction.
- Check for any injuries to anyone involved.
- Report the accident immediately if anyone is injured or killed.
- Exchange car insurance information with other drivers involved in the accident.
If you are in an accident that causes more than $1,000 in damages, you must report the accident within 10 days by completing a Traffic Accident Report (Form SR 1).
Cell Phone Use
The CA DMV states that about 10% of drivers use their cell phones while driving.
Even with hands-free devices, studies have shown that cell phone usage is highly distracting.
For safety measures, the state of California has made it illegal to text or use hand-held cell phones while driving. If you are over 18 years old, you may use a hands-free device to make phone calls.
If you must make a call while driving, follow these tips to help you stay safe:
- Try to pull off the road when possible.
- Do not get involved in emotionally heated discussions.
California law states if you are under 18 years old, you are NOT allowed to use a cell phone for any reason while driving, including texting and making calls this includes a hands free device.
Remember, all violations can affect your car insurance premiums. Stay safe and keep your car insurance rates low.
Know What You Want
Understand what coverages and amenities you're looking for in a car insurance company. Are you solely looking for cheap auto insurance? How might choosing the cheapest option affect your actual coverage? What about customer service—that's important, too, right?
Know your priorities before you begin looking to buy car insurance. Ideally, you'll want a company that offers great coverage at an affordable price from customer service-oriented agents.
Check for Reputation and Financial Standing
Once you've found a few seemingly compatible car insurance companies, do some investigative work and check out the companies' reputation and financial standing.
- First, check with your state’s Department of Insurance website and make sure the company is licensed to sell auto insurance in your state.
- Also, take a look at complaint ratios, if available.
- Then, look at the companies' financial standing on reputable websites such as J.D. Power and A.M. Best.
- Auto insurance is a two-way street: you pay for the coverage and your company provides the coverage. You need to make sure your company can pay your damages when required.
- Finally, find out how the companies stand with the Better Business Bureau (BBB).
- The BBB ranks companies from A+ to F, and gives you a multitude of information about those companies, such as the length of time they have been in operation and information about customer complaints (including resolutions).
Compare Car Insurance Quotes
Consider these tips when comparing auto insurance quotes:
- First and foremost, never look at just one or two car insurance companies; always get and compare at least three quotes.
- Talk with family members and friends about their car insurance providers.
- How long have they been with the company?
- Are they satisfied with their rates?
- What about customer service? How has the provider handled their premiums in the events of traffic violations, at-fault accidents, and other common premium-increasing situations?
- Look for auto insurance companies that offer discounts and good-driver rewards programs.
- Some companies provide breaks for drivers of certain ages or for drivers with anti-theft devices.
- Others offer rewards (e.g. lower premiums) for drivers with consistently good driving records.
- Ask about bundling insurance policies.
- Also known as “multi-line coverage," some companies provide discounts for purchasing two or more lines of coverage (such as car insurance and homeowner insurance).
- Check out the companies' social media accounts.
- Reach out to your potential insurance companies on platforms such as Facebook and Twitter and evaluate how they respond to your questions about issues such as coverage and discounts.
Remember, comparing car insurance quotes is never just about what's cheapest.
Periodically Evaluate Your Coverage
Getting great car insurance coverage at an affordable rate is fantastic, but don't get complacent. Many companies decrease premiums for certain life events, such as:
- Buying a new car. You might get lower rates if you purchase a new vehicle with great safety and anti-theft features.
- Moving. Living in low-crime areas tends to get you lower premiums.
- Getting older. Mature drivers (generally those who are 25 and older) often benefit from lower car insurance rates.
- Getting married. Combining two insurance policies into one can save you money. Married drivers are also viewed as more responsible and often see lower rates.
- Purchasing a new home. Remember multi-line insurance? You could get a discount if you insure your home with the same company.
Of course, some life events can increase your rates—which means you'll want to talk with your agent about ways to decrease them or even start comparing quotes from other providers. Such situations include:
- Moving. Again, moving can affect your car insurance rates, and in this case moving from a low-crime area to one with a higher crime or accident rate might cost you.
- Filing claims. Each claim you file can increase your rates—especially claims for at-fault accidents. Talk with your agent about ways to decrease rates or avoid rate hikes, or consider shopping for another provider.
- Traffic violations. Similar to filing claims, the more traffic violations and driving points you accumulate, the higher your premium could become.
- Adding a teenager to your policy. Often, increased rates when adding a teenager to your policy are unavoidable; however, if you feel the premium has become too high, talk with your agent about ways to decrease it (such as teen driving courses) or start looking at other companies.
Simply put, whenever you experience a life event that might decrease or increase your rates, it's time to evaluate your coverage and perhaps even start comparing quotes from other providers.
Consider Working with an Agent or Broker
The difference between car insurance agents and car insurance brokers is that, generally, agents work with one company while brokers work with several companies.
So, while an agent can help you get the best coverage and rates from his or her particular company, a broker can shop around and help you find the best coverage and rates from a number of companies. Keep in mind, however, they may charge you a broker fee.
Unless you feel comfortable shopping around on your own or have your heart set on one company, you might want to consider consulting an agent or broker about your car insurance needs.