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California Car Insurance

Auto Insurance Basics in California

The state of California requires all automobile drivers to have “proof of financial responsibility” as their law puts it. It means that you must have a certain monetary wherewithal to pay for injuries and damage caused by a car crash. For most people this means carrying car insurance.

Car insurance is a legal contract wherein a buyer makes payments, called premiums, to an insurance provider in return for well defined financial reimbursements related to car accidents. This is important because the car accidents are all too common in our live. The National Highway Safety Administration reports that approximately 37,000 people died in vehicular accidents in a single year at an estimated cost of $1.3 million per fatality. An additional 2.7 million people were injured in car crashes. Also, pedestrian deaths are at an all time high.

The economic cost of all this is measured in the hundreds of billions of dollars. Without any financial protection a driver could be liable for the full cost of bodily injury and property damage in the event of an accident. Auto insurance provides a financial safety net for at least some of those costs.

Because a serious accident could expose a driver to significant financial risk, a good rule of thumb is to purchase as much protection as you can reasonably afford. And, it should go without saying, to practice safe driving. Here are a variety of types of coverage available to California motorists. If you have caused an accident Liability coverage will reimburse the other party for injury and property damage up to a predetermined limit. Any damage costs above that limit could be on you to pay via a lawsuit.

Liability does not cover the costs of your own potential damages. For that you would need Collision insurance for repairing your car after an accident and comprehensive insurance to protect your car from things like theft and weather related damages, among others. Those drivers without medical insurance should seriously consider Personal Injury Protection which will at least partially reimburse you for medical treatment or hospitalization required after an accident. This type of coverage, known as PIP, is also bought by people wishing to augment their existing health insurance which often times has maximum reimbursement limits.

Car insurance is a complicated product. Prices vary from state to state and are driven by personal factors of every driver and levels of coverage desired.

Car Insurance Requirements in California

The state of California requires that drivers must carry minimum liability coverage of $15,000 for the death or injury of a person in an accident that is your fault; $30,000 for death or injuries for more than one person in such an accident; and $5,000 for any property damage that you may cause. Keep in mind that these are minimum amount of coverage. Accidents that result in serious injury can sometimes result in medical costs in the hundreds of thousands dollars. The injured party could sue you to seek reimbursement of any costs above those minimums. S, California drivers should consider additional coverage if they can afford to do so.

Minimum Car Insurance Coverage Requirements in California
Bodily injury liability $15,000 per person, $30,000 per accident
Property damage liability $5,000
Uninsured motorist bodily injury $15,000 per person, $30,000 per accident
Uninsured motorist property damage $3,500

The Average Cost of Car Insurance in California

Being a very populous state, there are many competing car insurers doing business there, as you might expect. Each insurer has its own underwriting standards and price structures. So the costs for the exact same levels of coverage will vary from vendor to vendor and will also be influenced by your own personal factors.

Rank Company Avg. Premium (annual)
1 GEICO $377
2 CSAA $454
3 Progressive $481
4 Mercury $532
5 State Farm $703
6 Allstate $709
7 Farmers $762

Having said that, the average cost of auto insurance in the state of California is almost $1,900. This is over $300 above the national average and makes California one of the more expensive states for car insurance. Costs for the state mandated bare minimum coverage can range from $500 to $700 per year. Geico and CSAA have the best rates for safe drivers for this low liability coverage - in the high $400’s. But remember, low coverage means potentially higher financial exposure in the event of a serious crash.

Many drivers opt for higher levels of protection. The very safest drivers may pay between $1,400 and $1,600 for full coverage and drivers with spotty records should expect higher rates than that. Drivers with a recent crash on their records can expect to pay in excess of $2,000 or even $3,000, depending on the circumstances of the accident. Driver who have had a DUI conviction will be deemed a high risk and can expect to pay well over $3,000 for coverage. But keep in mind, many companies can reject such a driver as being too high a risk for coverage.

Rank Insurer Quote before accident Quote after accident Difference
1 GEICO $1,455 $1,919 $464
2 Mercury $1,492 $2,571 $1,079
3 State Farm $2,016 $3,195 $1,179
4 Progressive $1,599 $3,293 $1,694
5 Farmers $2,270 $3,859 $1,589
6 Allstate $1,920 $4,138 $2,218

Unique Car Insurance Rules and Penalties in California

California requires a driver to have proof of financial responsibility and the vast majority of motorists obtain car insurance to satisfy that legal obligation. However, there are a couple of alternatives. Drivers may make a cash deposit of $35,000 with the state Department of Motor Vehicles, or purchase a bond from a surety company in the same amount. In return the driver gets a certificate of financial responsibility to satisfy the legal requirement for drivers. Driving without insurance can result in the assessment of fines and the suspension of your license.

Violation Avg. Annual Auto Insurance Rate % Insurance Rate Increase $ Insurance Rate Increase
Hit and Run $5,038 170% $3,170
Refused Breathalyzer/Chemical Test $4,937 164% $3,069
DUI $4,937 164% $3,069
Racing $4,936 164% $3,068
Reckless Driving $5,038 170% $3,170
Driving with a Suspended License $4,807 157% $2,939
At-Fault Accident $3,280 76% $1,412
Driving with an Open Container $2,752 47% $884
Operating a Vehicle Without Permission $3,463 85% $1,595
Passing a School Bus $2,654 42% $786
Improper Passing $2,654 42% $786
Following Too Closely $2,654 42% $786
Speeding $2,627 41% $759
Failure to Stop at a Red Light $2,654 42% $786
Illegal Turn $2,654 42% $786
Driving Wrong Way/Wrong Lane $3,027 62% $1,159
Failure to Yield $2,654 42% $786
Speeding in a School Zone $2,660 42% $792
Driving Too Slowly $2,660 42% $792
Distracted Driving $2,674 43% $806
Driving with Expired Registration $1,931 3% $63
Failure to Show Documents $1,931 3% $63
Not-at-Fault Accident $1,868 0% $0
Failure to Use Child Safety Restraint $2,115 13% $247
Failure to Wear a Seat Belt $2,006 7% $138
Driving Without Lights $2,006 7% $138

How to get the Cheapest Car Insurance In California

Rule number one for low insurance rates in California (and anywhere else, for that matter) is to be a safe driver. However, rates for all drivers can vary materially between carriers. That’s why it is imperative to do comparative shopping. There is no shortage of insurance providers in California. Make them compete for your money by getting free quotes from at least three vendors. At General.com our free online tool can help get you no cost no obligation quotes quickly and easily.

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