Comparing policies is more than simply looking at price tags, too. It’s important to look at customer satisfaction ratings, coverage limits, and deductibles when choosing the company that will protect you as a California driver.
In this article, we are going to take you through everything you need to know about acquiring an auto insurance policy in the state of California.
We will talk about what the law requires you to hold in the form of policy coverage, as well as the factors that will impact your premiums, the companies that are most likely to serve you best, and the impacts of driving with little or no coverage.
By the end of this article, you should not only have an excellent idea of exactly what you need from your next auto insurance company, but where to look when you’re ready to buy.
Our Top Five Picks for the Best Car Insurance in California
If you’re looking for auto insurance in the Golden State, you have a number of options. Keep in mind that your rates will vary depending on the coverage you choose, your personal driving record, and even your location.
Based on our research and consumer ratings, here are our top picks for your next auto insurance policy:
- Best Overall Satisfaction: Esurance
- Best Customer Service: Mercury
- Lowest Premiums: Mercury
- Great If You Have a Perfect Record: AAA
- Best If You Have a Less-Than-Perfect Record: Mid-Century (Farmers)
California Auto Insurance Requirements
Here is a look at your legal requirements for minimum auto insurance coverage in the state of California. These include both bodily injury and property damage liability coverage.
Bodily injury liability coverage pays for any injuries that you may cause to someone else. Keep in mind that if multiple people are injured, your total bodily injury coverage will be split between the parties.
Property damage liability coverage pays for any damage caused to someone else’s property, for which you are responsible. This may include other vehicles, structures/buildings, or objects.
You’re welcome to choose a policy that provides additional coverage, of course, but these are the minimum amounts of liability coverage that you are required to hold in order to drive in the state.
California also allows drivers to self-insure, if they’d rather bypass a liability insurance policy through another company.
In order to self-insure as a driver in California, you’ll need to prove financial responsibility to the state. You’ll receive a self-insurance certificate issued from the DMV, which usually requires a $35,000 cash deposit. You can also obtain a surety bond for the same amount, from a company licensed to do business in the state.
To learn more about self-insuring in California, contact the state DMV’s Financial Responsibility Unit.
Penalties
If you do not hold at least a liability coverage policy, you are unable to register your vehicle in California. You are also considered “uninsured” and, as such, are unable to legally drive a motor vehicle in the state.
If you get pulled over and cannot present proof of valid liability coverage when asked, you’ll be ticketed for being an uninsured driver. The fine for this ranges from $100-200 for the first offense, plus court costs. Subsequent offenses bring with them penalties between $200-500 each, plus court costs.
If you don’t actually have coverage that meets the state’s required minimums, there’s also a possibility of your vehicle being impounded and your driver’s license suspended. This is in addition to the fines for being unable to produce valid proof upon request.
If you get in an accident and aren’t carrying the minimum liability insurance–regardless of whether the wreck is your fault or the other driver’s–you’re looking at some pretty serious consequences. Keep in mind that these are in addition to being responsible for the cost of any damages and injuries for which you’re at fault (which could financially ruin you, were you to be sued for your assets!).
First off, if you’re in an accident and are uninsured/underinsured at the time, your license is likely to be suspended. This penalty could last for up to four years. In some cases, you can have it reinstated after 12 months by acquiring valid auto insurance and paying a license reinstatement fee to the DMV.
On top of that, you’ll now be required to carry a pricey SR-22 insurance policy in addition to your regular policy, and also obtain an SR-22 Proof of Financial Responsibility certificate.
Proof of Insurance
Simply having a policy with the minimum required coverage isn’t enough. You actually need to carry proof of that coverage with you every time you’re behind the wheel.
In California, you are required by law to carry proof of insurance. This may be in the form of an insurance card, which the company may mail you or provide online for you to print out. Some companies also provide a mobile app, from which you’ll be able to pull up a digital version of your insurance card. While this is handy, you should probably also keep a hardcopy version in your vehicle, just in case.
Your proof of insurance card will include the policy number, name of the policyholder, all vehicles covered under the policy, and the dates of valid coverage. Insurance companies will report to the DMV if you stop paying your auto insurance premiums. So, even if your insurance card still shows a valid date, if your payments have lapsed and you get pulled over, the officer will know.
California also allows you to self-insure, as mentioned above. If this is the case, you’ll need to carry your proof of cash deposit or surety bond. Contact the state’s DMV to learn more about self-insuring options and requirements.
Average Cost of Coverage in California
Ever wondered how your own coverage cost compares to others in your state. Well, if you live in California, here’s how your policy measures up.
According to QuoteWizard, the average total cost for coverage in the Golden State is $814.82, which equates to $67.90 a month. This breaks down to an average annual cost of $482.18 for liability coverage, $374.31 average for collision coverage, and $98.73 average for comprehensive coverage.
Of course, your actual policy cost could vary greatly depending on many factors. These could include your personal driving record, age, location in the state, what kind of car you drive, and whether you qualify for any discounts.
Cheapest Car Insurance in California
As you can expect, insurance rates have a wide range based on each insured individual. It’s hard to compare companies when looking for the one with the “cheapest rates,” since averages include 18-year-old male drivers with sports cars just as much as they include 35-year-old women with minivans (and everyone in between).
However, we took the time to compare some of the more popular companies, to see how they measured up in the state of California. They were pitted against one another with the same search criteria. Our sample policyholder was a single male, age 30, with a clean driving record. He lives in the Sacramento area and drives a 2013 Chevrolet Malibu.
Here’s how some of the most popular companies measured up:
Let’s take a look at how our same example guy would fare if he instead lived in Los Angeles:
Your results may vary based on your specific zip code. However, if you live in California, you can probably bank on California Capital and Mercury being two of your cheapest insurance providers in the state.
Top Car Insurance Companies in California
Wondering who the most popular, and most widely-used, insurance companies are in the Golden State? Here’s a look at seven of the top providers, and the market share that they hold in the state.
Customer Satisfaction
Curious to see how these insurance companies measure up in customer satisfaction? Here are some scores from two of the most popular ratings bureaus, for the top five insurance providers in the state. We looked at both A.M. Best and JD power ratings for these comparisons.
AAA Northern + Interinsurance Exchange of the Automobile Club
These two companies combine to serve the northern and southern halves of the state, and account for the biggest auto insurance market share in California. Here’s how they are rated in customer satisfaction and stability:
State Farm is the second-largest auto insurance market shareholder in the state. Here’s what its customers think:
A.M. Best: “A++” rating
JD Power: #7 in the state with a 4-star overall satisfaction rating
Allstate
Allstate is the third-largest insurer with a ~7% market share.
A.M. Best: “A+” rating
JD Power: #13 with a 3-star overall satisfaction rating
Mercury
This company insures only 6.5% of drivers in the state, but its justified complaints ratio is the lowest of all the California auto insurance companies.
A.M. Best: “A+” rating
JD Power: #15 in the state with a 3-star overall satisfaction rating
Mid-Century
This company is under the umbrella of Farmers Insurance insures 5.7% of the California market, making it the fifth most popular insurer in the state.
A.M. Best: “a” rating
JD Power: #16 in the state with a 2-star overall satisfaction rating
Need More?
If you want to learn more about being an insured driver in California, the state provides a wealth of free guides and useful educational materials on their website. You can view them here.
Top Car Insurance Companies in California
Wondering who the most popular, and most widely-used, insurance companies are in the Golden State? Here’s a look at seven of the top providers, and the market share that they hold in the state.
Customer Satisfaction
Curious to see how these insurance companies measure up in customer satisfaction? Here are some scores from two of the most popular ratings bureaus, for the top five insurance providers in the state. We looked at both A.M. Best and JD power ratings for these comparisons.
AAA Northern + Interinsurance Exchange of the Automobile Club
These two companies combine to serve the northern and southern halves of the state, and account for the biggest auto insurance market share in California. Here’s how they are rated in customer satisfaction and stability:
- A.M. Best: A+ rating (AAA Northern) and A+ rating (Interinsurance Exchange of the Automobile Club)
- JD Power: #5 in the state with a 5-star rating in overall satisfaction (Interinsurance Exchange of the Automobile Club) and #11 in the state with a 3-star rating in overall satisfaction (AAA)
State Farm is the second-largest auto insurance market shareholder in the state. Here’s what its customers think:
A.M. Best: “A++” rating
JD Power: #7 in the state with a 4-star overall satisfaction rating
Allstate
Allstate is the third-largest insurer with a ~7% market share.
A.M. Best: “A+” rating
JD Power: #13 with a 3-star overall satisfaction rating
Mercury
This company insures only 6.5% of drivers in the state, but its justified complaints ratio is the lowest of all the California auto insurance companies.
A.M. Best: “A+” rating
JD Power: #15 in the state with a 3-star overall satisfaction rating
Mid-Century
This company is under the umbrella of Farmers Insurance insures 5.7% of the California market, making it the fifth most popular insurer in the state.
A.M. Best: “a” rating
JD Power: #16 in the state with a 2-star overall satisfaction rating
Need More?
If you want to learn more about being an insured driver in California, the state provides a wealth of free guides and useful educational materials on their website. You can view them here.
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