Get The Cheapest Auto Insurance In California: Tips And Tricks

California is one of the most expensive states for car insurance, with quotes up to 24% higher than the national average. The cheapest car insurance in California is offered by Geico, at $239 per year, or $20 per month, according to NerdWallet's August 2024 analysis. The average cost of minimum coverage in California is $462 per year, or about $39 per month.

The cheapest car insurance companies in California are Geico, USAA, Mercury Insurance, Progressive and CSAA, according to MarketWatch.

The average cost of full-coverage car insurance in California is $193 per month or $2,313 per year. It’s about 15.2% more expensive than the national average of $2,008, according to MarketWatch's research, and the cost of California car insurance went up by 10.7% from 2022 to 2023.

According to Bankrate's analysis, Progressive, Mercury and Kemper may offer lower-than-average rates for California drivers.

Compare quotes from multiple providers

Comparing quotes from multiple providers is a great way to find the cheapest auto insurance in California. The rates you are offered can vary significantly between providers, so it is worth shopping around.

The Zebra, for example, compares quotes from Progressive, Allstate, Liberty Mutual and Nationwide, as well as other top companies. NerdWallet also compares quotes from a variety of providers.

When comparing quotes, make sure you are selecting the same coverage levels so you can compare quotes equally. It is also worth looking at a company's customer complaints on your state insurance commissioner's website and their financial strength through a rating site like AM Best.

It is also worth bearing in mind that smaller insurance companies may offer prices well below those of large competitors, so don't discount them.

Look for insurers that offer discounts

Discounts are a great way to save money on your auto insurance. Here are some of the most common discounts offered by insurance companies in California:

• Good driver discount: If you have a clean driving record, you may be eligible for a discount. This usually means having no accidents, DUIs, or violations within a certain period, typically three years.
• Mature driver improvement course discount: Some companies offer a discount for drivers aged 55 or over who have completed a defensive driving course approved by the California DMV.
• Multi-vehicle discount: Insuring multiple vehicles with the same company can often result in a discount.
• Multi-policy discount: Bundling your auto insurance with another type of insurance, such as homeowners or renters insurance, can often lead to savings.
• Loyalty discount: Some companies offer discounts to customers who have been with them for a certain number of years.
• Good student discount: Students who maintain good grades, usually a B average or higher, may be eligible for a discount.
• Defensive driving course discount: Taking a defensive driving course can sometimes lead to a discount, regardless of your age.
• Anti-theft discount: If your car has anti-theft devices or safety features, you may be eligible for a discount.
• Paperless discount: Opting for paperless billing and receiving documents via email can sometimes result in a small discount.
• Pay-in-full discount: Paying your annual premium in full upfront rather than in monthly instalments can often lead to savings.

Raise your deductible

Raising your car insurance deductible is a great way to lower your insurance costs. A car insurance deductible is the initial sum you have to pay out-of-pocket before your insurance coverage kicks in and begins to pay out a claim due to an accident or damage to your vehicle.

You can choose a deductible of $250, $500, or $1,000, but amounts can go as high as $2,500. Typically, raising your deductible can reduce your premium. However, ensure that you have the financial means to cover the higher deductible in case of a claim.

According to Forbes Advisor, drivers who increase their deductibles can save between 7% to 28% a year on average. The actual amount you save depends on your current deductible, your new deductible, and your auto insurance company. For example, increasing your deductible from $500 to $1,000 can save you an average of $145 with USAA, but only an extra $4 with Allstate.

When choosing a deductible, consider your financial situation and driving habits. If you can afford a higher out-of-pocket cost in the event of a claim, a higher deductible might be suitable. On the other hand, if you prefer lower out-of-pocket expenses, opt for a lower deductible. It's also important to consider the value of your vehicle. Having a high deductible on a low-value car may not be a good idea, as you would end up paying a significant portion of the car's worth in the event of a loss.

Lower your coverage limits

Lowering your coverage limits can be a way to reduce your insurance costs. However, it is important to note that this approach also increases your financial risk in the event of an accident or damage to your vehicle.

In the context of California, the state's Department of Insurance mandates that insurance providers set premiums based on driving history and vehicle usage. The state also requires drivers to carry a minimum level of liability insurance, which includes:

• Bodily injury liability coverage of at least $15,000 per person and $30,000 per accident.
• Property damage liability coverage of at least $5,000.

These minimum requirements will change in 2025, with the new minimums being:

• Bodily injury liability coverage of $30,000 per person and $60,000 per accident.
• Property damage liability coverage of $15,000.

While these are the legal minimums, it is worth considering purchasing higher levels of coverage. State-required minimums may not be sufficient to cover the costs of a serious accident, and you don't want to be left financially vulnerable.

When deciding on your coverage limits, it is essential to assess your own situation and needs. Consider factors such as the age and value of your car, your driving history, and the likelihood of accidents or vehicle theft in your area.

Additionally, keep in mind that California has a relatively high rate of motor vehicle thefts and natural disasters, which can impact insurance costs. You may want to opt for higher coverage limits to protect yourself financially in the event of such incidents.

Drop coverage you don't need

Dropping coverage you don't need is a great way to save money on your auto insurance in California. Here are some tips to help you decide which coverages you can drop:

• Understand your policy: Take the time to read and understand your auto insurance policy. The "Declarations" page is a useful summary of your policy, including the coverages, exclusions, and limits. If there is anything you don't understand, don't hesitate to contact your agent, broker, or insurance company for clarification.
• Assess your car's value: If your car is old or not worth much, you may consider dropping full-coverage insurance. Full-coverage insurance includes liability, collision, and comprehensive insurance. Collision and comprehensive insurance can become expensive as your car ages, as the cost of insurance may approach or exceed the value of the vehicle. When your car is about 10 years old, consider switching to liability-only insurance.
• Evaluate your needs: Consider your driving habits, the age and condition of your car, and your financial situation. If you don't drive often, you may not need as much coverage. If your car is in good condition and you can afford repairs or replacement, you may not need collision or comprehensive insurance.
• Compare costs: Get quotes from multiple insurance companies and compare costs and coverage options. You may find that you can get similar coverage from another company at a lower price. Shopping around can help you identify areas where you may be overpaying and determine if dropping certain coverages is a good option for you.
• Discuss with your agent or broker: If you're unsure about what coverages to drop, consult with your agent or broker. They can help you assess your needs and provide guidance on which coverages are essential and which ones you may be able to drop. Be sure to choose a trustworthy and reputable agent or broker who puts your interests first.

Remember, it's important to carefully consider your situation before dropping any coverage. While it can save you money, it's also crucial to ensure you have sufficient coverage to comply with California's financial responsibility laws and protect yourself financially in the event of an accident or damage to your vehicle.

Frequently asked questions