in California ranks among the most expensive in the United States due to a combination of the state's high number of uninsured drivers, rising healthcare and repair costs, and economic factors that are raising insurance rates across the board.

The top reasons why California car insurance is so expensive

The average auto insurance rate in California is $1,394 for a state minimum coverage policy and $2,439 for full coverage, the latter being higher than the

national average

The elevated cost of

auto insurance in California

can be attributed to factors that are specific to the state, along with outside factors that are hiking rates across the country.

Unique factors in California

High rate of uninsured California drivers: According to an Insurance Information Institute (III) report, more than 16.6%1 of Californians drive uninsured, which increases the risk for auto insurance companies and results in increased premiums for insured drivers.

Rising healthcare costs: Car insurance providers face significant challenges when settling claims related to medical expenses, and the situation is not improving in terms of cost.

Rising repair costs: The addition of high-tech and extra safety features in modern cars has led to higher repair costs. The auto repair industry is also grappling with technician shortages and escalating labor expenses that drive up claim payouts for insurers.

Heavy tourist traffic: The state of California attracts lots of tourists, resulting in busy roads at most times of the day and an increased risk of car accidents.

Severe weather conditions: Wildfires, droughts, and floods are on the rise in California. These severe weather incidents lead to a greater frequency of insurance claims.

Economic and insurance industry factors

Post-pandemic inflation: As most Americans know, post-pandemic inflation has led to increased prices for both new and used cars, along with their parts. Combined with heightened demand but limited supply, this prompts insurers to pass on these increased costs to customers in the form of rate increases.

Record losses: Following significant losses, some major insurers have drastically increased their rates, while others have stopped underwriting auto insurance policies entirely.

Other outside factors

Although these factors aren’t state-specific, they can cause your rates to go up:

Driving record: Tickets, DUIs, and other moving violations lead to rate hikes. Having a clean driving record is one of the most important determinants of an affordable premium.

Claims history: If you’ve made multiple claims in the recent past, you’ll see higher rates.

Type of car: Sports cars and electric vehicles typically have higher premiums.

Location: Living under a high-density zip code or in an area with high theft rates will raise premiums.

Keep in mind: In most states, providers also look at your credit score to determine your car insurance premium, but this is not allowed in California.

Here’s what you can do about it

You can use a few strategies to lower your car insurance rates in California.

Switch insurance companies

If you haven’t compared car insurance quotes in a while, you’re likely overpaying.

The

Jerry

app can help you compare rates from dozens of reputable insurance providers to make sure you’re getting the most affordable auto insurance premium—and if you want to switch, Jerry can take care of the paperwork and help you cancel your previous policy.

Add discounts

Some of the most popular

car insurance discounts

—like bundling your homeowner policy or good driver discounts—will be automatically applied to your policy. That said, it’s a good idea to ask if you qualify for other discounts.

Adjust your level of coverage

If you don’t drive often, switching to pay-per-mile insurance might be a good idea.

While dropping

full coverage car insurance

isn’t normally recommended, you can increase your deductibles to lower your rates.

FAQs

Why is California car insurance so expensive right now?

California is experiencing an increase in car insurance rates due to factors such as the high number of uninsured drivers, frequent severe weather occurrences, and the high healthcare cost in the state.

What is the average cost of car insurance in California?

The average cost of car insurance in California is $1,394 for a state minimum coverage policy and $2,439 for full coverage.

How much should car insurance cost per month in California?

It costs around $116 a month for a state minimum coverage policy and $203 for full coverage, on average. But remember: your rate might be higher or lower than the state average due to the highly individualized nature of car insurance premiums.

What is the best car insurance provider in California?

Determining the "best" car insurance provider in California can be subjective as it depends on individual needs and preferences.

Your best bet is to compare quotes, coverage options, and customer reviews to find the provider that suits your needs and budget.

Do you have to have car insurance in California?

Yes, you have to get car insurance in California. Driving without insurance can result in severe penalties, including fines and license suspension.

What is the average cost of car insurance in Los Angeles?

On average, auto insurance in Los Angeles costs about $116 per month for minimum coverage liability insurance, and about $244 per month for full coverage insurance.

Is car insurance more expensive in Florida or California?

Although California is one of the most expensive states to live in, insurance rates are typically lower than in Florida. Shopping around can help you find cheap car insurance no matter where you live.

SOURCES

https://www.iii.org/fact-statistic/facts-statistics-uninsured-motorists