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The Best Cheap Car Insurance Companies for the Average California Driver in 2020

Most California drivers will be able to choose from California car insurance companies like State Farm, Farmers, Allstate, Berkshire Hathaway, and Progressive, as well as USAA, which offers insurance to members of the military and veterans and their families, according to the National Association of Insurance Commissioners.

The table below lists various insurance companies and the approximate monthly premium cost for an average driver. However, these numbers are rough estimates and may vary greatly from any individual quote that would pertain to your unique driving history and situation.

Company
Amount
1. Esurance
In 2020, Esurance ranked #1 in California for the cheapest car insurance on average.
$1,055
per year
2. Progressive
In 2020, Progressive ranked #2 in California for the cheapest car insurance on average.
$1,132
per year
3. USAA
In 2020, USAA ranked #3 in California for the cheapest car insurance on average.
$1,171
per year
4. GEICO
In 2020, GEICO ranked #4 in California for the cheapest car insurance on average.
$1,270
per year
5. MetLife
In 2020, MetLife ranked #5 in California for the cheapest car insurance on average.
$1,318
per year
6. AAA
In 2020, AAA ranked #6 in California for the cheapest car insurance on average.
$1,319
per year
7. Allstate
In 2020, Allstate ranked #7 in California for the cheapest car insurance on average.
$1,322
per year
8. CSAA
In 2020, CSAA ranked #8 in California for the cheapest car insurance on average.
$1,356
per year
9. Mercury
In 2020, Mercury ranked #9 in California for the cheapest car insurance on average.
$1,449
per year
10. State Farm
In 2020, State Farm ranked #10 in California for the cheapest car insurance on average.
$1,526
per year
11. Hartford
In 2020, Hartford ranked #11 in California for the cheapest car insurance on average.
$1,613
per year
12. Farmers
In 2020, Farmers ranked #12 in California for the cheapest car insurance on average.
$1,649
per year
13. Travelers
In 2020, Travelers ranked #13 in California for the cheapest car insurance on average.
$1,715
per year
14. Allied
In 2020, Allied ranked #14 in California for the cheapest car insurance on average.
$1,762
per year

Estimates give you an idea of which companies to contact for car insurance quotes, but make sure to shop around when you’re looking for California car insurance companies and ask about multi-policy discounts and other discounts for safe driving, long tenure with the company and more.

Which Car Insurance Company in California is the Cheapest for You?

While one California auto insurance company might provide cheaper rates than its competitor for one group of drivers, for another group, it could be more expensive. That variation is why it’s important to get personalized auto insurance quotes. California insurance companies consider the following things when determining premiums: Names of all owners and operators of the vehicle(s) in a household; physical address; age, sex, and marital status; driving history and license status; year, make, and model of vehicle; vehicle usage; prior insurance; employment and occupation; and credit information.

The Best Car Insurance Companies in California for 2020

We created a unique rating system, which is based on a combination of ratings from reputable outlets like JD Power and AM Best. Scores are out of 100, with each weighted equally, and include financial stability, customer satisfaction, claims, and affordability metrics.

These ratings are an important indicator of the insurance company’s responsiveness in an emergency, their claims process, and what they offer their consumers. See the top companies below.

Expand all Rankings +

1

USAAScore: 100
+

5/5

User Satisfaction

5/5

Claims Ratings

5/5

Affordability

A++

Financial Stability

2

AAAScore: 90
+

4/5

User Satisfaction

5/5

Claims Ratings

4/5

Affordability

A

Financial Stability

3

GEICOScore: 90
+

4/5

User Satisfaction

3/5

Claims Ratings

4/5

Affordability

A++

Financial Stability

4

WawanesaScore: 87.5
+

4/5

User Satisfaction

4/5

Claims Ratings

5/5

Affordability

A-

Financial Stability

5

State FarmScore: 87.5
+

4/5

User Satisfaction

3/5

Claims Ratings

3/5

Affordability

A++

Financial Stability

6

AmeripriseScore: 85
+

4/5

User Satisfaction

3/5

Claims Ratings

4/5

Affordability

A

Financial Stability

7

HartfordScore: 85
+

3/5

User Satisfaction

4/5

Claims Ratings

3/5

Affordability

A+

Financial Stability

8

ProgressiveScore: 82.5
+

3/5

User Satisfaction

2/5

Claims Ratings

4/5

Affordability

A+

Financial Stability

9

AllstateScore: 82.5
+

3/5

User Satisfaction

3/5

Claims Ratings

3/5

Affordability

A+

Financial Stability

10

SafecoScore: 80
+

3/5

User Satisfaction

3/5

Claims Ratings

3/5

Affordability

A

Financial Stability

According to 2018 data from the National Association of Insurance Commissioners, the top-rated auto insurance companies in California are: State Farm, Farmers, Allstate, Berkshire Hathaway, AAA Auto Club Enterprises Car Insurance, Mercury General Insurance Group, Kemper Corporation, CSAA Insurance Group, Progressive, and USAA.

Market Share by Company

State Farm has the greatest market share in the state at 13.74%, followed by Farmers at 10.68%, Allstate at 8.99%, Berkshire Hathaway at 9.69%. Check out the other top insurers in California below.

Company
Market Share
1. State Farm
13.74%
2. Farmers
10.68%
3. GEICO
9.69%
4. Allstate
8.99%
5. AAA
8.69%
6. Mercury
7.77%
7. CSAA
7.19%
8. Kemper
6.55%
9. Progressive
4.56%
10. USAA
4.49%

Cheapest Car Insurance for Drivers With a DUI in California

According to the Centers for Disease Control and Prevention, 10,327 people were killed in crashes involving a drunk driver in California from 2003–2012. The percentage of adults who reported driving after drinking too much (in the 30 days prior to being surveyed) was 1.8% in California, according to 2012 CDC data.

The financial repercussions of getting a DUI are costly and can range from court and legal fees to alcohol education treatment programs. Additionally, your insurance rate will also see a spike in cost in addition to the legal fees. Consider the following auto insurance rates for drivers who receive a DUI in California.

Company
Amount
1. Mercury
In 2020, Mercury ranked #1 in California for the cheapest car insurance for drivers with a DUI.
$2,377
per year
2. Esurance
In 2020, Esurance ranked #2 in California for the cheapest car insurance for drivers with a DUI.
$2,626
per year
3. Progressive
In 2020, Progressive ranked #3 in California for the cheapest car insurance for drivers with a DUI.
$2,710
per year
4. Farmers
In 2020, Farmers ranked #4 in California for the cheapest car insurance for drivers with a DUI.
$2,833
per year
5. GEICO
In 2020, GEICO ranked #5 in California for the cheapest car insurance for drivers with a DUI.
$2,984
per year
6. USAA
In 2020, USAA ranked #6 in California for the cheapest car insurance for drivers with a DUI.
$3,316
per year
7. Travelers
In 2020, Travelers ranked #7 in California for the cheapest car insurance for drivers with a DUI.
$3,567
per year
8. AAA
In 2020, AAA ranked #8 in California for the cheapest car insurance for drivers with a DUI.
$4,105
per year
9. Allstate
In 2020, Allstate ranked #9 in California for the cheapest car insurance for drivers with a DUI.
$4,180
per year
10. Allied
In 2020, Allied ranked #10 in California for the cheapest car insurance for drivers with a DUI.
$4,272
per year
11. State Farm
In 2020, State Farm ranked #11 in California for the cheapest car insurance for drivers with a DUI.
$4,687
per year
12. CSAA
In 2020, CSAA ranked #12 in California for the cheapest car insurance for drivers with a DUI.
$4,843
per year
13. Hartford
In 2020, Hartford ranked #13 in California for the cheapest car insurance for drivers with a DUI.
$5,979
per year
14. MetLife
In 2020, MetLife ranked #14 in California for the cheapest car insurance for drivers with a DUI.
$8,285
per year

While each insurance company calculates premiums differently, you can expect to pay an additional $40,000 over the course of 13 years in increased auto insurance premiums. Exactly how much your rate would go up depends on your insurance company, your location and your driving record. With a DUI you’ll likely pay higher rates for up to a decade.

Cheapest Car Insurance For Drivers With a Speeding or Distracted Driving Ticket in California

According to the National Highway Traffic Safety Administration’s (NHTSA) 2018 Fatality Analysis Reporting System (FARS), 3,259 crashes in California were caused by distracted driving. Driving while distracted can cause accidents. California state laws prohibit all hand-held device use while driving, according to the Governors Highway Safety Association.

Company
Amount
1. USAA
In 2020, USAA ranked #1 in California for the cheapest car insurance for distracted drivers.
$1,280
per year
2. Esurance
In 2020, Esurance ranked #2 in California for the cheapest car insurance for distracted drivers.
$1,337
per year
3. CSAA
In 2020, CSAA ranked #3 in California for the cheapest car insurance for distracted drivers.
$1,704
per year
4. MetLife
In 2020, MetLife ranked #4 in California for the cheapest car insurance for distracted drivers.
$1,707
per year
5. AAA
In 2020, AAA ranked #5 in California for the cheapest car insurance for distracted drivers.
$1,743
per year
6. Allstate
In 2020, Allstate ranked #6 in California for the cheapest car insurance for distracted drivers.
$1,873
per year
7. GEICO
In 2020, GEICO ranked #7 in California for the cheapest car insurance for distracted drivers.
$1,874
per year
8. Mercury
In 2020, Mercury ranked #8 in California for the cheapest car insurance for distracted drivers.
$1,901
per year
9. Progressive
In 2020, Progressive ranked #9 in California for the cheapest car insurance for distracted drivers.
$2,164
per year
10. State Farm
In 2020, State Farm ranked #10 in California for the cheapest car insurance for distracted drivers.
$2,245
per year
11. Farmers
In 2020, Farmers ranked #11 in California for the cheapest car insurance for distracted drivers.
$2,267
per year
12. Allied
In 2020, Allied ranked #12 in California for the cheapest car insurance for distracted drivers.
$2,471
per year
13. Hartford
In 2020, Hartford ranked #13 in California for the cheapest car insurance for distracted drivers.
$2,545
per year
14. Travelers
In 2020, Travelers ranked #14 in California for the cheapest car insurance for distracted drivers.
$2,572
per year

Your auto insurance rate is likely to go up if you get a ticket for speeding or for distracted driving. According to the Insurance Information Association, your driving record is taken into account when you secure your auto policy, so being riskier to insure means paying higher premiums. Your insurer can also re-evaluate your rate if you get a moving violation (i.e., a speeding ticket).

Cheapest Car Insurance Companies in California for Drivers With Bad Credit

Although the average credit score in California is slightly higher than the national average, it’s not a factor that impacts insurance rates in the state. According to Experian, the average FICO Score in the United States hit a record high of 703 in 2019, which is lower than the California average FICO Score of 708. While insurers in many states use credit scores to determine premium costs, California is an exception. Insurers in California cannot use a driver's credit score to influence the cost of car insurance. Your credit score can impact your finances in other ways, however, so improving your score can help prepare for the future.

Cheapest Car Insurance Companies in California for Seniors

In California, there are more than 5.5 million drivers older than 55—and more than 2.5 million of them are 70 or older. When shopping for car insurance, seniors in California should ask for discounts for completing driver safety courses, discounts for driving infrequently and discounts for choosing a vehicle that has good safety features. There are other options that seniors can consider when it comes to choosing auto insurance.

The following table is a general guideline of what seniors in California can expect when they go looking for the most affordable car insurance.

Company
Amount
1. Esurance
In 2020, Esurance ranked #1 in California for the cheapest car insurance for seniors.
$1,183
per year
2. State Farm
In 2020, State Farm ranked #2 in California for the cheapest car insurance for seniors.
$1,220
per year
3. Allstate
In 2020, Allstate ranked #3 in California for the cheapest car insurance for seniors.
$1,260
per year
4. USAA
In 2020, USAA ranked #4 in California for the cheapest car insurance for seniors.
$1,274
per year
5. GEICO
In 2020, GEICO ranked #5 in California for the cheapest car insurance for seniors.
$1,341
per year
6. AAA
In 2020, AAA ranked #6 in California for the cheapest car insurance for seniors.
$1,358
per year
7. Hartford
In 2020, Hartford ranked #7 in California for the cheapest car insurance for seniors.
$1,374
per year
8. Progressive
In 2020, Progressive ranked #8 in California for the cheapest car insurance for seniors.
$1,389
per year
9. CSAA
In 2020, CSAA ranked #9 in California for the cheapest car insurance for seniors.
$1,401
per year
10. MetLife
In 2020, MetLife ranked #10 in California for the cheapest car insurance for seniors.
$1,560
per year
11. Mercury
In 2020, Mercury ranked #11 in California for the cheapest car insurance for seniors.
$1,567
per year
12. Farmers
In 2020, Farmers ranked #12 in California for the cheapest car insurance for seniors.
$1,699
per year
13. Allied
In 2020, Allied ranked #13 in California for the cheapest car insurance for seniors.
$1,758
per year
14. Travelers
In 2020, Travelers ranked #14 in California for the cheapest car insurance for seniors.
$1,838
per year

California requires drivers age 70 and older to renew their licenses in person every five years and take both vision and written tests. The state accepts requests from family members and others for the DMV to conduct unsafe driver investigations. Finally, the state requires doctors who diagnose patients with Alzheimer’s disease or other conditions that may make them unsafe drivers to report the diagnosis.

Cheapest Car Insurance for Students

California Car Insurance: How Much a Teen Driver Will Cost You

Median annual price change for families with a teen driver on their policy:

$2,276 INCREASE

This is a difference of 95%.

Studies show that teens are much higher-risk drivers than adults, so expect your car insurance premium to jump exponentially when your teen starts driving. It's generally cheaper to add your teen to your own policy rather than have a separate policy, but your policy still could skyrocket. MoneyGeek analyzed high- and low-cost California car insurance policies to show just how widely policies vary — and what you can do to lower your costs.

If your child is heading off to college, it's a good time to talk with your insurance agent about how these changes will affect your insurance coverage. If your child doesn't plan on driving at college, you may be able to save some money. If your child is commuting long distances, you may want to consider increasing your coverage. Full-time college students with a B average or higher may also qualify for a Good Driver Discount. Always notify the insurance company if your car will be used in another state for more than 30 days.

The following table illustrates an estimation of what parents in California can expect to pay for their teen or college-aged student drivers.

Company
Amount
1. Allstate
In 2020, Allstate ranked #1 in California for the cheapest car insurance for students.
$2,228
per year
2. State Farm
In 2020, State Farm ranked #2 in California for the cheapest car insurance for students.
$2,409
per year
3. Progressive
In 2020, Progressive ranked #3 in California for the cheapest car insurance for students.
$3,236
per year
4. GEICO
In 2020, GEICO ranked #4 in California for the cheapest car insurance for students.
$5,628
per year
5. Allied
In 2020, Allied ranked #5 in California for the cheapest car insurance for students.
$5,824
per year


Premium Comparison by Student Type

Premium comparison for two adults + 16 years old

car
Average premium for two 2014

Mustang GTs

$6,787
car
Average premium for two 2008

Town and Country Limiteds

$4,782
Annual benefits of minivans:$2,005 saved

This is 30% less expensive.

Cheaper premium for college vs. high school drivers

Median premium change with a college student vs. high school driver:

$1,200 DECREASE

This is a savings of 25%.

Potential discounts for teens in California

Impact on annual premium with good student and defensive driving discounts:

coins
$620 SAVED

California students: a long-distance discount

You may pay a smaller annual family premium if your child lives 150 miles or more away from home.

male
Average premium for a 19-year-old male
car

$4,712 at home

graduation

$4,622 at school

$90 IN SAVINGS

female
Average premium for a 19-year-old female
car

$3,888 at home

graduation

$3,815 at school

$73 IN SAVINGS

Insurance Rate Information for Military Drivers and Veterans

California is home to 184,540 active duty military personnel and more than 1.8 million veterans — more than any other state. In California, some insurance companies offer car insurance exclusively for service members and vets, while other companies offer discounts. However, a good driving record is still required to get a price break.

USAA, which caters to veterans and enlisted personnel, offers discounts for a five-year clean driving record and for insured vehicles less than three years old. AFI (Armed Forces Insurance) also sells policies exclusively to veterans, active duty military, and their spouses or surviving spouses.

Age savings for California service members

male
25 years$2,274
50 years$1,704
female
25 years$2,127
50 years$1,698

$570 Saved
$128 Saved

Median auto insurance for service members: $1,743

Who Needs Car Insurance in California?

Any car that is operated or parked on California roadways must be insured, according to the California Department of Motor Vehicles (DMV). Even your 1967 Camaro that sits in the garage will need insurance to be registered if you ever want to take it for a spin.

If you drive your car very little, though, you may qualify for a low-mileage discount or a "pay as you drive" insurance.

Proof of Insurance in California

All California drivers must carry evidence of financial responsibility in their vehicles at all times, or proof of an alternative (see below). Your insurance company should provide you with an insurance card, which will contain information about your policy and the car(s) covered. You can carry this on paper or on a mobile device, and it must be presented when:

  • Requested by law enforcement.
  • Renewing vehicle registration.

The vehicle is involved in a traffic collision.

Minimum Liability Insurance Requirements in California

Drivers must have minimum liability insurance, which covers costs related to injuries or damage you might cause in a car accident. The minimum level of coverage is:

  • $15,000 for injury/death to one person.
  • $30,000 for injury/death to more than one person.
  • $5,000 for damage to property.

But that's the bare minimum. Insurance experts often recommend carrying ten times this amount (See below: "How Much Insurance Do I Need?").

Low Cost Auto Insurance Program in California

If you cannot afford liability insurance, you may be eligible for the California Low Cost Automobile Insurance Program.

Alternatives to Insurance in California

Most drivers purchase auto insurance to cover their financial liability, but the California DMV offers a few alternatives:

  • A cash deposit of $35,000 with the DMV.
  • A DMV-issued self-insurance certificate (which requires even larger reserves).
  • A surety bond for $35,000 from a company licensed to do business in California.

These alternatives require significant cash reserves, and the entire reserve can be wiped out with one accident. That's why most people stick with insurance.

Car insurance companies use your location to calculate your rate.
Explore average rates for your city.

Car Insurance Requirements in California: How Much Coverage Do You Need?

What percentage of drivers in California lack vehicle insurance?

14.7%%

National average: 12.6%

Source:

Insurance Information Institute.

California law requires only that you have liability insurance, which covers injuries to other people or property damage to others.

But cheap car insurance isn't always the best car insurance.According to the Insurance Information Institute, insurance experts and consumer advocates recommend carrying liability coverage of $100,000 per person and $300,000 per accident. Some experts recommend carrying uninsured motorist insurance as well.

If you have a loan for a new car, the insurer will require that you purchase collision and comprehensive insurance. You may also want to carry it if you’ve purchased a relatively new car for cash. On the other hand, if your car is worth less than your deductible and a couple years' worth of premiums, you might want to forgo that insurance.

Additional collision coverage beyond the state-required minimum will protect you if you are at fault in an accident. Comprehensive coverage helps repair or pay for the replacement value of a vehicle following a crash.

For more on the common types of car coverage and what's best for you, check out the MoneyGeek guide to car insurance.


Auto Insurance Rates

Compare Auto Insurance Rates

Ensure you're getting the best rate for your car insurance. Compare quotes from the top insurance companies.


Expert Advice on Finding Cheap Car Insurance in California

  1. What are the key factors drivers in California should look for when searching for the best auto insurance coverage?

    First and foremost know what you want. Second, ask around about the reputation of any prospective insurer you are considering. Keep in mind, the higher your FICO score and the better your driving record, the less your insurance will cost if you are a careful shopper. The insurance industry also maintains a special worthiness score which they use as an indicator of whether you will suffer a loss. There are many sites you can research for this information. One is the site for the National Association of Insurance Commissioners (https://content.naic.org). Finally, several insurers specialize in certain areas of insurance and this will have an impact on the consumers’ cost. Some are positive such as USAA who specializes in military personnel, provide annual returns, and unilaterally returned partial premiums during the COVID crisis. A now defunct company, 20th Century was famous for its very discretionary choice of insureds. They would not accept certain types of vehicles or drivers outside of certain areas. Using these methods, insurers keep the overall costs down. On the less favorable side, there are insurers who specialize in covering people who lost their license due to a DUI, too many tickets, or other breaches of social order. As you might imagine, their premiums are generally very high and the limits are often limited. However, these might be the only carriers who will cover a distressed driver.

    Key Factors to Consider:

    • Liability coverage
    • Property damage coverage
    • Personal injury coverage
    • Claim deductibles
    • Premiums for additional drivers
    • Available discounts
    • Reputation

    California residents should also limit their search to “admitted” insurance companies. California insurance regulations protect the consumer, but only if that company has been approved by the Insurance Commissioner.

    The first key factor in purchasing car insurance in California is ensuring that the purchased policy meets the state’s minimum requirements for coverage. These requirements are based on minimums for bodily injury liability, property damage liability, uninsured motorist bodily injury, and uninsured motorist property damage. These minimums can change because of legislation, and it is possible that some policies are partial in terms of meeting the current minimums. Therefore, consumers need to ensure that whatever policy they purchase meets the minimum car insurance requirements of California.

    Consumers should consider car insurance quotes in California because of discounts available for good driving. California has mandated certain criteria for who counts as a good driver, but car insurance companies have some leeway in terms of how much of a discount they offer on their quote. Consumers should attempt to identify providers who offer the steepest discounts to good drivers.

    Finally, consumers should be aware that there is high turnover among car insurance companies that serve California. Therefore, it might be better to choose a car insurance company with a long operational history in California.

    California drivers should consider:

    • Coverage Limits
    • Comprehensive vs Liability Insurance
    • Uninsured Motorist Coverage

    If you opt for a plan with only the minimum liability insurance required by the state of California, you'll end up with a much cheaper premium than a more comprehensive plan that also covers your own vehicle. And then it's all about weighing your own risk tolerance and propensity to get into an accident. I'd also like to note that if you're driving in a bigger city (such as San Francisco) and parking your car on the street rather than in a garage, your risk of break-ins and other uncontrollable accidents also rises. So you should also consider your parking habits when deciding between coverage options.

    All insurance plans work similarly: individuals purchase and maintain their coverage by paying premiums (often at a monthly, bi-annual, or annual or frequency), and when an accident occurs the insurance will cover all or a portion of the costs you incur. The portion of the costs that are covered will be determined by the generosity of the plan you purchase. Typically, the higher your premium payments, the better coverage you will receive in the case of an accident. So it's often an individual decision to weigh your perceived risk of needing insurance versus the cost of insurance premiums, as everyone has a different risk tolerance and a different propensity to get into a traffic accident. For example, if you are a very cautious driver, the expected value you get from insurance coverage would be much lower than the price of your premium payments, so you would be better off only purchasing the minimum required coverage as the chances of needing it are extremely low. However, even if your chance of getting into an accident is low, you may be a very risk averse individual, in which case you may prefer to pay more in premiums upfront in order to have the peace of mind of knowing you won't be on the hook for a costly repair in the event of an accident. I personally fall into the camp of being a careful driver and not very risk averse, so I myself purchase very minimal car insurance coverage.

  2. What steps can drivers in California take to find affordable car insurance?

    Affordable car insurance is an oxymoron but there are some things you can do to reduce the cost. The first three things are research, research, and research. The Internet provides an excellent resource. In addition, look at what incentives the insurer may have. For example, most insurance will ”bundle” policies for multiple cars or multiple types of insurance like homeowners, etc. This can result in a substantial savings on all of the insurance policies. Be careful of brokers working out of their cars or out of small strip mall offices. Generally their job is to sell a policy, any policy, and be done with it. More often than not, they could care less whether the insurer they place you with will provide service or not. As a broker, they have no particular affinity to any given insurer. They try the place you with an insurer that provides them the greatest commission.

    The Department of Insurance provides a Complaint Composite Report that ranks automobile insurance companies by the number of complaints filed with the department. There is also a useful rate comparison tool that is updated every year.

    The first step in finding affordable car insurance in California should involve using the Internet. Many car insurance companies—national and regional—serve California, and a Web search is the best way of identifying a range of possible car insurance providers in the state. One useful resource is provided by the California Department of Insurance, which provides a master list of insurance companies providing car insurance in the state. This list is available through the following link: California Department of Insurance

    Next, consumers should visit individual car insurance company sites and utilize, when available, simulation applications that generate quote estimates. Getting an actual quote might require a credit check, which can adversely affect the credit scores of some consumers (particularly those with low credit scores). Therefore, before proceeding to an actual quote, consumers should visit the Web sites of individual providers and obtain estimates. After identifying a range of car insurance companies with the lowest premiums, consumers can request quotes and determine whether estimates are accurate. Finally, after obtaining quotes, the selection of a low-cost quote should be because of the breadth of coverage offered in that quote and how well it meets a consumer’s individual needs.

    California drivers should obtain quotes from multiple companies and compare the premium. Drivers can also combine auto and home insurance for potential savings. Be sure to check for discounts for good drivers/students, anti-theft devices, etc.

  3. How do regulations and rules in California impact insurance pricing and how consumers might shop for coverage?

    Insurers may cancel or not renew a car insurance policy for a driver with a history of accidents, moving violations, or with a DUI/DWI conviction. As for charging for an insurance policy, it is whatever the market will bear. There are certain statutory or regulatory prohibitions. For example, the infamous redlining, meaning charging more for insurance in certain heavy minority areas. With this being said, insurers are legally able to charge different fees for different areas. For example, a similar policy might cost more in the intercity than in Westlake Village. The insurers justify this predicated upon actuarial numbers. If they can prove the distinction, the difference is acceptable. If it is solely upon racial, income, or other personal attributes, it is not acceptable. California also allows insurers who provide certain services/insurance to operate without a license. If the consumer is a high risk driver, such as one with a lot of tickets, suspended license, or a few DUI’s, this might be the only insurer they can get. Just be aware, there are risks inherent with these companies you do not have with licensed companies.


Michael Rainey
Michael RaineyPractitioner Lecturer of Business Law at Pepperdine Graziadio Business School
Thomas Francl
Thomas FranclAssociate Faculty Professor at National University
Kaycea Campbell
Kaycea CampbellAssociate Professor of Economics at Chapman University
Kai  Ding
Kai DingAssistant Professor Department of Economics at California State University - East Bay
Audrey Guo
Audrey GuoAssistant Professor of Economics at Santa Clara University


Sources