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California Car Insurance Rates


Looking for the best California car insurance rates? Understanding all of the factors that go into determining CA auto insurance rates is the first step to finding the cheapest California auto insurance rates. For example, California is one of the few states that do not allow auto insurance companies to determine your insurance rate based on the zip code that you live in. You see, in other states, your rates are reflected by the area that you live in; however, in California your rates are strictly determined by your driving record.

California does allow a certain amount of competition between insurance agencies and does not require that the rates start at a specified level. However, the California Department of Insurance does monitor rates to ensure that companies do not try to force rates to increase across the state.

The auto insurance rates in California were not always this way. Prior to 1988 there was no monitoring of insurance rates and companies could charge what they wanted based on where a person lived. In fact, a person could move from one zip code in California to another one and experience a 100% increase in their insurance rates. It was this type of increase that encouraged the Department of Insurance to step in and start monitoring the practices of the insurance companies that sold auto insurance in California with Proposition 103.

California Car Insurance Rates Established

California requires that all drivers in their state be covered under an auto insurance policy with specific minimum coverage. It is a requirement that all registered vehicles have insurance on them as well. The minimum rates for California residents are $15,000 bodily injury per person, $30,000 bodily injury per accident and $5,000 property damage per accident. California residents can purchase insurance through a private insurance carrier (licensed in California), or by making a cash deposit of $35,000 to the DMV in order to self-insure.

Residents who cannot get auto insurance through other, more traditional means, can procure insurance via the state called an assigned risk plan. Basically the state manages the rates for these individuals and then assigns insurance companies a percentage of these individuals to insure at the rate that the state determines. The minimum coverage for these individuals is $10,000 in bodily injury for each person, $20,000 bodily injury per accident and $3,000 property damage per accident. An example of why someone might need this plan is that they cannot afford the more traditional route of procuring insurance.

California Car Insurance Rates Explained

As mentioned above, Proposition 103 changed the way California insurance companies could charge their customers. Now, instead of the local statistics for the area that you live affecting your rate, you are directly responsible for what you pay based on how you drive and other factors that allow you to receive a discount.

There are pros and cons to the enactment of Prop 103. For example, a 100% increase in insurance rates for a good driver who moves two blocks from their old location is outrageous. However, many insurance companies have decided not to sell auto insurance in California because they cannot raise rates based on the increased risk of living in a more densely populated area or an area that experiences a lot of accidents traditionally.

Also, insurance companies now have to abide by specific rate decreases as mandated by the Department of Insurance. For example, if an insurance company offers a discount rate because you are a good driver, the state requires that this rate represents a 20% or more decrease from the insurance company’s base rate. Each type of discount is assigned to this tiered system. This system has hurt some drivers as many insurance companies simply do not offer certain discounts to their drivers. This is why shopping around becomes very important in California.

What Can Increase Your California Car Insurance Rates

Because your rates are determined by your driving, your rates will increase if you prove to be a poor driver. There are certain laws that you have to obey in order to keep your driving record clean. Naturally things such as driving under the influence, speeding, running red lights, etc. will all equate to receiving a citation and having points assigned to your driver’s license. However, did you know that these points will increase your auto insurance rates?

Many people are not aware that they do not have to be in an auto accident to see an increase in their auto insurance rates. Most citations will cause your insurance rates to increase. This increase will depend on the severity and the frequency of your offense.

Some traffic laws that some people do not even think about are things like the car seat law, seatbelt law, cell phone law and the smoking law.

The car seat law is well known, however many people do not realize that their children are required to remain in a car seat until they are six years old or weigh more than sixty pounds. What’s more, unless your vehicle does not have a back seat, children under the age of eight are not allowed to ride in the front seat of your vehicle unless there is no safety restraints in the back or all the other seats are taken by children younger than the child in front. The seatbelt law applies to anyone of any age riding in the front seat and any child under 14 riding in the back seat. Insurance companies will raise your rates because of not wearing seatbelts because of the seriousness of the injuries that occur when individuals are not wearing their seatbelts.

California was one of the first states to pass a hands free only option for driving with a cell phone. The fine for talking on a cell phone while driving is $20 the first time and $50 each time after that. The same fines apply to texting (a law for texting was passed in 2008). Any person under the age of 18 cannot use an electronic device of any kind to communicate while driving (hands free or otherwise) or they will face having their license suspended.

Most people do not realize that it is illegal to smoke with a minor in the vehicle. While the police cannot pull you over for smoking while driving, if they pull you over for another traffic violation and you are seen smoking with a minor in the car, then you will receive an additional citation. However, your insurance rates will not increase if you receive a citation for smoking.

Finding Cheap California Car Insurance Rates

With such conflict in the insurance industry because of California’s unusual laws, it is very important that you take the time to get a California car insurance quote before you purchase your auto insurance. Free auto insurance quotes, like we have here, will provide you with the opportunity to see what each insurance company has to offer. Enter your zip above to start finding the best California auto insurance today!

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