What you need to know about buying car insurance in California

Car insurance in California is not cheap. The average full-coverage policy costs just over $2,400 a year in the Golden State, about $500 more than the national average. Even a liability-only policy costs more in California: $864 per year on average, some $200 more than the U.S. as a whole.

State insurance regulations, the rising cost of new cars and vehicle repairs, and extreme weather events have all contributed to higher auto insurance costs in California. As a result, some drivers – particularly those with expensive vehicles or a less-than-perfect driving record – may have trouble finding the coverage they need, says Ezra Peterson, senior director of insurance for Way, an app that helps drivers save money on vehicle-related expenses, including insurance.

“[These drivers] are finding themselves with options that may only include limited coverage amounts, restrictive payment plans, or premiums that are just unaffordable,” he says.

That said, Californians can find affordable car insurance with some work.

In this guide, we’ll help you navigate this complex market, providing concrete data and prices to steer you toward an auto insurance provider that meets your needs.

Key highlights

• According to our data, California’s average annual cost of car insurance is about 9.5% higher than the nationwide average for state-mandated minimum coverage.
• Full-coverage policies also cost more in California, about 27% more than the national average.
• Among major cities, drivers in Los Angeles pay the most on average, $262 per month. Drivers in San Diego pay the least, $194 per month.

Understanding car insurance requirements in California

As in most states, you must obtain liability auto insurance that satisfies California requirements:

• Bodily injury liability, per person per accident: $15,000
• Bodily injury liability, per accident, total: $30,000
• Property damage liability: $5,000

You’ll also be required to provide proof of valid auto insurance to register a vehicle in California. If you fail to submit an acceptable form of insurance, the DMV may suspend your vehicle registration, resulting in additional penalties when you reinstate it.

Average cost of car insurance in California

Simply put, car insurance costs more in California. For the cheapest coverage, which is the state-mandated minimum liability coverage, the difference is marginal; there’s only a $4 difference between the monthly average cost in California and the nationwide average. Each state sets its own liability coverage requirements, but they tend to be very low.

These margins widen for a liability-only policy with higher coverage amounts of 50/100/50. While the national average is about $650, California’s average cost for this coverage is roughly $860. Full coverage in California costs nearly $520 more annually than the nationwide average $2,416.

The rates below were collected from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for the following: state minimum liability insurance, standard liability with coverage limits of 50/100/500, and full coverage with liability limits of 100/300/100 and $500 deductibles for comprehensive and collision insurance.  

Why is car insurance so expensive in California?

State regulators approved double-digit rate increase requests from major car insurers in late 2023 that took effect in 2024 – all told, more than $1 billion. Consumer Watchdog, a California-based advocacy organization, estimates the average driver could see their rate go up by as much as $167.

“California also has a very high number of electric vehicles on the road, which cost 12% more to insure than comparable gas-powered vehicles,” Peterson says

How to find cheap auto insurance in California

Shop around: The best way to ensure you get the best auto insurance prices in California is to request quotes from multiple providers. We recommend at least three companies to get a baseline for the kind of coverage you need. You can request quotes directly from providers online or by phone, but an independent agent can streamline this process by doing the legwork for you.

“The shopping process can be quite a challenge for the average consumer, which is where a good independent [agent] that works on behalf of the consumer to connect them with a carrier that can fit their needs can be an essential ally,” Peterson says.

Look for discounts: Insurers love doling out savings, some of which may result in significant savings. Maintaining a clean driving record can save you as much as 25% off your rate with some carriers. Insuring your vehicle and your dwelling with the same insurer, known as bundling, is another common discount that could yield a reduction of up to 20% . Be sure to ask your agent or representative what discounts you may qualify for.

Track your driving: In recent years, providers have begun offering optional usage-based insurance (UBI) programs, which use a phone app or an in-car telemetry device to track your driving habits, like how fast you drive, how far you travel, and whether you are prone to tailgating or sudden stops and starts. These apps often score or reward you for incentivizing good driving because safe and infrequent drivers are at lower risk for accidents. 

Raise your deductible: Raising your deductible can also reduce your premiums. If you have a $500 deductible, for instance, bumping up to a $1,000 or $1,500 deductible will cause your premium to decline. However, you’ll want to make sure you have an emergency fund or sufficient cash flow to support an additional deductible burden should you need to file a claim.

Car insurance rates, by company, in California

Based on our analysis, Geico is the cheapest insurer in California with a sample rate of $160 per month or $1,919 per year. At the other end of the price spectrum, Farmers is the most expensive insurer with a sample rate of $253 per month or $3,035 per year.

Insurance companies use complex algorithms to assess risk and set their rates. The riskier you are to insure, the more you can expect to pay for coverage. Factors such as the vehicle you drive, where you live, how often you drive, your age and credit history all can play a role in your risk profile.

Below are the average monthly and annual costs for the top providers in California. Remember that these are only averages; the amount you pay will be different.

Comparing car insurance quotes in California

We’ve broken down auto insurance average rates in the Golden State to give you a better idea of how your circumstances may affect your quoted premiums.

California car insurance cost by city

Of the largest cities in California, Los Angeles has the highest average monthly car insurance cost: $262. That’s $28 per month more than Oakland, the city with the second-highest average monthly rate. On the other hand, drivers in San Diego pay the least per month on average, just $194. For comparison’s sake, the national average is $158 per month, considerably less than the average $200 price Californians can expect to pay.

Frequently asked questions

How can I save on car insurance in California?

You can save on car insurance in California with the following strategies:

1. Take advantage of discounts, such as maintaining a clean record or taking a defensive-driving class.
2. Bundle your auto insurance with a home, renters, condo or life policy from the same insurer.
3. Improve your credit history by eliminating debt and making payments on time.
4. Review your coverage and request new quotes at least once a year, as your insurance needs may have changed.
5. Raise your deductible, which will lower your premium.
6. Consider usage-based insurance programs that monitor your driving in exchange for potentially lower rates.
7. Install anti-theft technology such as an alarm or tracking device.

Is California a no-fault state?

No, California is not a no-fault state. It uses a tort system to determine wrongdoing and responsibility in car accidents and other personal injury claims. In “at-fault” states such as California, the party responsible for an accident must pay damages for the entire accident. Typically, this comes out of the liability portion of your car insurance policy. This also means that you can file a claim against the at-fault driver to recover damages. Additionally, there are fewer limits on suing for damages than in a no-fault state.

Methodology

Editors collected rate information from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

In addition, we also calculated rates for these hypothetical drivers, but with one or more of the following on their record: speeding ticket, at-fault accident, DUI/DWI, poor credit history, or a lapse in coverage.

We analyzed more than 53 million quotes, over 34,000 ZIP codes, and 170 insurance companies nationwide.

Note: 100/300/100 means up to $100,000 for the medical bills of those you injure, up to $300,000 per accident for bodily injury liability for all persons injured in one accident, and $100,000 to repair other drivers’ cars and property you damage.