How Much Is Car Insurance in California? Factors That Impact Your Rate

One of the reasons California driver premiums can vary from national averages is Proposition 103. This voter approved measure differentiates the state from most by placing strict regulation on auto insurance. Regulations established under Proposition 103 necessitate that insurance companies weigh specific factors more heavily, and are barred from using others in the insurance pricing process.

In actual practice, it means your driving record, which is largely in your control, carries more weight than factors that are largely out of your control. This is typically good news for safe drivers, and it's important to know the factors that will affect your premium.

Considering the regulations established by Proposition 103, there are the following factors in California that will impact your insurance premium:

According to Prop 103, insurance providers must look at driving records most critically and can be the most easily improved. Driving records with little to no infractions show insurance companies a less risky driving record, positively affecting insurance costs. However, driving records with numerous infractions, as well as driving records with at-fault accidents, negatively impact insurance costs and usually lead a driving record to be high risk. In some cases, driving records with high levels of risk also may need to have an SR-22 form record filing in order for a driving record to not be permanently high risk.

How a driver chooses to drive a vehicle also affects cost. The state minimum usage coverage costs less, however, the driver is left uncovered. Full coverage costs more, however, the driver is better protected. Deductibles work in the same manner as coverage. A higher deductible means the driver costs the insurance company less, but if a claim is made, the driver is affected to a greater financial degree. The balance should be tied to the value/cost of the vehicle, and the cost of the insurance coverage.

Most drivers don't realize how much location and where you park your car affects your insurance rate. Insurers analyze neighborhood statistics on accident, theft, and claim frequencies. Two drivers with the exact same record could be quoted very different rates based on their ZIP code. In the congested sections of Los Angeles and the San Fernando Valley, higher theft rates and conditions can elevate insurance costs. If you live in a less congested area, your insurance rates will be lower. It's something that you can't control, but it helps you understand the reason that your quote is different from your friend across town.

One thing that surprises people about California is that insurance companies are prohibited from using credit scores for automobile insurance. In almost every other state, having poor credit will result in you getting charged a much higher insurance rate. Proposition 103 in California prohibits credit-based insurance scoring for automobile insurance policies. Your insurance rate will be determined by other driving factors, which is a benefit for California drivers with poor credit or no credit at all. This is a great example of how California state regulations will affect the insurance pricing for your automobile.

For these reasons, you should take national insurance rate estimates with a grain of salt because they often include credit as a rating factor.

Most drivers underestimate the impact of the vehicle they own on their insurance rates. Insurers conduct an expensive vehicle analysis. This includes the cost of repairs, the frequency of thefts, the perception of the model in the event of a collision, and the safety features of the vehicle. Owning a vehicle that costs little to repair, is durable, and is of little interest to thieves will result in much lower insurance costs than owning a sports car. So, when you are considering a potential car purchase remember that the insurance costs over the years you own the car often vary greatly among cars in the same price range.

An online average is one price of many. The only way to know for sure what you will pay is a quote based on your specific information. An agent can compare prices across companies and see which policies meet the Prop 103 requirements and your budget. Go to our auto insurance page and, if you have other insurance needs, ask about auto and renters insurance together. When you need to stop estimating prices, reach out to a licensed California agent to get a quote.