There are various auto insurance companies in California; however, choosing the one which offers you the most favorable rates can be hard. California is one of the states with the most complicated insurance laws as well as the highest premiums in the market.
If you want to choose among the insurance companies and can’t decide which one has more favorable terms, we will guide you throughout this article. Before going deep into the company overviews separately let’s see the fundamental laws of auto insurances in California.
California Car Insurance Requirements
According to California Insurance Code #11580.1b, the minimum liability insurance requirements for private vehicles are
- $15,000 for injury or death of one person
- $30,000 for injury or death of more than one person
- $5,000 for damage of property
This means the insurance company is liable for compensating a third party other than the contact person for personal injury or vehicle damage. Note that the amounts, as mentioned above, are minimum and can be varied due to the cost of the damage.
Generally, the prices depend on many variables such as the type of car, the driver’s record, their age, and many others which play a crucial role in determining the exact prices of insurance.
How is the fee of your insurance decided?
According to Businessinsider.com, the average annual cost of car insurance in California is $1,731 as of 2018. The state has the seventh-highest insurance costs, which are about 27% higher than the U.S. national average of $1,365.
Such high prices are a result of complex state insurance laws as well as high population level in the state, which makes the premiums high. Now let’s see what the variables affecting the cost of your insurance are. Those criteria include:
- Your age: Don’t be surprised to see that younger drivers tend to have higher insurance costs. That is because young drivers are considered having less experience, therefore being riskier. It increases the chances of accidents and vehicle damage.
- Driving record: Different insurance companies have discount policies for the drivers who have been accident-free for the previous years (specified for each company separately).
- The type of vehicle you own: The insurance costs may vary based on the type of vehicle you own. Whether it is a truck, minivan, or passenger car, the prices differ significantly.
- The value of the vehicle: The insurance costs may vary based on the value of the car you own. More expensive cars tend to have higher premiums as the auto parts are more costly.
- Ownership: Whether the car is owned, leased, or financed is also an essential factor in determining your insurance costs.
- Your ZIP code: California is a large state, and the cost of your insurance may vary due to the specific region you live in.
How to Find the perfect car insurance for you?
There are many factors based on which your decision can be altered. If the price of the coverage is the essential variable, you can simply compare car insurance quotes online at websites such as Nerdwallet.
However, if you also pay attention to customer service, make sure you research the following:
- Visit the California state insurance commissioner’s website to find customer reviews and more information about companies in your area.
- Ask the insurance company all of the necessary information to make sure you are getting the right coverage. Note that in most cases you can create your own personalized car insurance package and avoid the costs of additional services if you are not going to use them in the future.
- If you are a risky driver, had accidents or tickets, make sure you apply for insurance at least after you have three years of clean driving record. Drivers with good record tend to have lower rates compared to risky ones.
- Consider your age group, as some companies do not have insurance packages for young drivers (18 years old or younger). Even though many of the large insurance companies offer car insurance for young drivers, they are generally more costly, and young drivers can’t be afforded.
- Maintain a good credit score, because in many cases insurance companies decide the fee of insurance based on this factor as well. A credit score is also one of the variables when determining the cost of your coverage. If your credit score is good, the chances of discounts and less costly options are more likely.
- Take advantage of discounts, as many insurance companies offer them. Discounts are available for drivers who have lower risks (have been accident-free in the previous 3-5 years). Specific equipment in your car, such as safety or anti-theft, can also reduce the cost of your insurance.
- Choose the right car as based on the type the prices may vary. If your vehicle is damaged, the costs of repair and certain parts of your vehicle may have higher rates than the others. So, the type of car plays a great role for an insurance company to decide the value of your insurance.
- Report your driving mileage because when you drive less, you pay less. If your driving has been decreased due to the job change in the closer district or you have been using taxis, make sure you report to your insurance company, because less driving makes your insurance quote go down.
Now let’s see what are the insurance companies that have the highest ratings and offer the most favorable conditions to their customers. The list includes companies which have various packages for different target groups. Note that some of them may not have packages for young drivers like others do.
There are some cases when the price of insurance may vary based on different factors such as the type of vehicle you own, whether it is leased or financed. For some cases, special discounts may be applied based on your age, marital status, or even your current profession.
Note that the majority of the listed companies consider young drivers as a risky group and charges them more than the experienced adults. Make sure you are aware of the details offered by those companies prior to making your decision.
Esurance has the lowest premiums in the California insurance market. It has a very user-friendly website with many interactive tools for customers’ managing their own insurance policies.
One of the services Esurance provides includes emergency roadside assistance of up to $75 for tire changes, lockouts if you have the coverage.
If your car is leased or purchased with an auto loan, Esurance has the coverage where it will pay up to 25% of your car’s value and help you to repay the difference.
Another thing offered by Esurance includes the coverage of customized parts of your vehicles which were damaged or stolen.
The company helps you to cover the losses up to $4,000, which can include navigation systems, stereos, and other equipment. Esurance monthly rates vary from $88.13 to $250 (average). The prices differ based on the age of the driver, their riskiness, and many other factors discussed above.
Progressive is one of the most customer-oriented and best auto insurance companies not only in the state of California but the U.S. as a whole.
With its best feature “Name your price,” the company lets the customers design their insurance package allowing them to choose which options are most favorable to them and which ones they are less likely to need.
Based on the information the customer provides, Progressive decides the fee and helps the customers to solve their car issues accurately. The company also has many discount policies based on how YOU drive. Basically, the safer you drive, the more discount you will receive on your insurance package.
It incentivizes people to drive safer and save on their insurance. The monthly rates vary from $132 to $386. Note that the highest premium is charged on young drivers (18 years old).
One of the oldest insurance companies in California is Liberty Mutual, which was founded in 1925. The exciting thing about Liberty Mutual is that it offers accident forgiveness. This program provides discounts if you have been accident-free and violation-free for the previous five years with Liberty Mutual or with any other car insurance company.
You may receive up to 30% discount as a good driver. If you want an additional discount with Liberty Mutual, you may apply for home insurance as well, which will offer you more favorable terms and conditions.
The monthly rates vary from $147 to $215. Please note that Liberty Mutual does not have any packages for 18-year-old drivers.
In California, AAA operates through two separate companies, which are AAA Northern California and AAA Southern California.
The company offers many discount policies such as up to 27.3% price deduction when you insure two or more cars with them or up to 7.4% if you hold a certain profession. The monthly rates vary from $138 to $363, depending on various factors.
Cost-U-Less is a California based insurance company that specializes in car insurance. It has a wide range of product offers from the most basic to premium.
If you have had accidents or tickets previously and many of the insurance companies charge you higher premiums, Cost U Less has a special offer for drivers like you with favorable and less costly terms.
Freeway offers cheap and affordable car insurance packages for every target group; from risky drivers to responsible ones. The company notes that offering cheap insurance packages does not mean you have to sacrifice the quality.
In comparison to other insurance companies, Freeway Car insurance provides favorable terms to both young drivers and adults, risky or accident-free.
21st Century provides auto insurance to more than 20 million drivers across the U.S. They do not offer insurance coverage for drivers who are 18 years old or under, however, there are favorable conditions for drivers older than 18.
Based on your driving record, you may qualify for a 20% discount as a good driver. Other discount policies include attaching several cars of your own under the same insurance coverage.
The monthly rates of 21st Century vary from $142 to $309, with no coverage for young drivers.
GEICO is one of the most well known and competitive auto insurance companies in the U.S. Despite its various insurance packages, the company has the 2nd highest premium for young adults.
So, if you are 18 years old and want to insure your vehicle, GEICO is not the best choice. The rates of insurance vary from $127 to $444 (for the young drivers). GEICO also has discounts for military and members of the National Guard or Reserves of up to 15%.
The company has been providing insurance services in California since 1962 and is placed as one of the local market leaders. Mercury offers many attractive packages to its customers, such as Ride-Hailing coverage.
According to this coverage, the insurance is provided to Uber, and Lyft drivers, and the price can be as low as 20 cents a day.
The coverage is also applicable if the drivers are using the car for personal use. The discounts are available if you pay the full coverage amount initially or you have been a driver with a good record. Specific discounts are applicable if you hold a particular occupation specified by the company. In general, the prices of insurance vary from $147-$507 per month.
Nationwide is one of the lowest cost insurance companies in the U.S., which has its local offices in California as well. One of the innovative programs Nationwide offers is the Smart Ride program, where you use a plug-in device to track and evaluate your driving habits.
If your habits are good chances of receiving a discount on your insurance goes up. Additional discount may be obtained based on the driven miles. Basically, the less you drive, the lower the premium will be.
Choosing the right car insurance is one of the key ways to save on your insurance costs. The first step to take before selecting an insurance company for you is understanding your needs.
- What is it that you need?
- What should be included in your insurance contract?
- And which are the sections you are less likely to use and rather not have those?
After you answer these questions, you can further proceed to the research part and see the terms and conditions offered by each of the car insurance providers.
During your research, you will need to pay special attention to the fact that there are cars which have higher premiums for insurance. Those are the cars which have high values, and the cost of damages are accordingly higher.
In the state of California, insurance premiums are relatively high in comparison to other states in the U.S. All of the above-discussed companies have several things in common. All of them have a straightforward shopping experience, excellent customer care, and target drivers of different groups. When choosing which insurance company will be more favorable for you to purchase the coverage, there are specific criteria you should consider.
When determining your insurance costs, companies take various measures such as your age, marital status, driving history, type of your vehicle and even the method of acquisition, whether it is leased, financed or owned can make a massive difference in the price offered to you. In most cases, insurance companies have discount policies, so, make sure you do comprehensive research before your final decision.
If you have a less than perfect driving history, you will most likely be charged more than a person who was not involved in any car accidents in prior years. However, there are some insurance companies which will have more advantageous conditions for you. Ask your insurance company for all of the necessary information to make sure you are getting the right insurance package which is going to be very helpful throughout your driving experience.
In order to save more, eliminate the options which you are less likely to use from your insurance. Whether you are a young driver or experienced adult, market offers are diverse and customized to meet everyone’s needs.
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