California Auto Insurance Requirements
California has a variety of options for motorists seeking cheap car insurance. While drivers in California are required to be covered by a current auto insurance policy, both policy options and alternatives for demonstrating financial responsibility exist.
Minimum auto insurance coverage requirements in California are mandated by the California Department of Insurance. The following minimum coverage is required on every registered vehicle, except as noted below:
(Source: California Department of Insurance)
Driving without the mandatory liability insurance in California will result in a license plate and driver’s license suspension and a $200 fine for the first offense; penalties increase significantly for subsequent offenses. Financial responsibility must be demonstrated prior to reinstatement of license and tags. It is not legal to even park a car on a public street if the vehicle is not properly insured.
The California Low Cost Automobile Insurance Plan (LCA) is available to drivers who are unable to obtain such coverage through the voluntary market. More information is available on the LCA website. In addition, the State of California offers this program to responsible drivers who meet certain income criteria, have a good driving record, but are unable to get affordable car insurance coverage.
Alternatively, drivers not wishing to carry basic liability insurance in California may either deposit cash or obtain a surety bond in the amount of $35,000 with the Department of Motor Vehicles. A certificate of financial responsibility will be issued in lieu of an insurance card.
Factors Influencing Car Insurance Premiums in California
Finding cheap car insurance in California takes some legwork and research. California ranks in the top 10 most expensive states for car insurance costs. While many factors go into underwriting auto insurance, California insurance consumers are faced with conditions that negatively impact car insurance quotes and rates:
• Severe urban congestion, which means more cars on the roads and highways
• Vehicle repair costs are generally more expensive in California than elsewhere
• Overall accident rates are higher than national averages
• A high percentage of uninsured drivers
• Auto insurance fraud
• Vehicle theft rates above national averages.
The average auto insurance premium for residents in California is $1,991 in 2011; the national average is $1,790.
Tips for Obtaining Cheap Car Insurance in California
• See if you’re eligible for the California Low Cost Automobile Insurance Plan
• If you’re over 55, consider taking an approved defensive driving course
• Maintain a good driving record
• College graduates receive discounts
• Bind multiple policies (homeowners, life, auto) with the same provider
• Maintain a good credit score
• Create a personal “emergency fund” of up to $1500 and increase deductibles accordingly
• Discuss affinity discounts with your insurance provider
• Drop comprehensive and collision insurance on older vehicles
California Statistics
• Auto Theft: California has one of the highest rates of auto theft in the nation, but this rate has been decreasing (as is the case in most states) consistently over the past 10 years. This can be attributed primarily to anti-theft devices being standard on recent model cars, as well as public awareness of the issue:
(Source: Auto Thiefs)
• Automobile Accidents: The total vehicle miles traveled in California have declined in recent years, and following a nationwide trend, so have accident fatality rates. Though 2009 saw a substantial decrease in the number of deaths in car crashes, California still has nearly 10% of the national total of vehicle fatalities.
(Source: National Highway Traffic Safety Administration)
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