How to Use California State Laws to Get the Lowest Auto Insurance Rates

There are many wonderful things about living in the state of California. But Americans who don’t live here have a perception that most things seem to cost more in the Golden State. While is true that prices are higher in some instances (for instance, on gasoline), the cost of living in California is lower than many people think.

Case in point: auto insurance. Mane people assume that it costs more to insure your car in California than most other states. But in fact, the opposite is true: California’s annual average auto insurance premium is $1,480, which is substantially lower than the national average of $1,793.

Still, auto insurance coverage can take a bite out of a household budget, primarily because it is required by California law for people who wish to drive in the state. Thankfully, there are ways to get lower auto insurance rates for California drivers.

The Minimum Requirement Laws in California
Like other states, California law dictates the minimum levels of insurance coverage for its drivers. Your policy must have at least $15,000 in coverage for injury for one person, $30,000 in coverage for injuries in a single accident, and $5,000 for property damage per accident – which, by the way, are among the lowest required minimums in the nation. So you can certainly reduce your monthly payment to an auto insurance company by keeping your levels at a minimum (although, there’s no telling what that might cost you should an accident occur).

Also, be aware that drivers in California are not required to purchase uninsured or underinsured motorist insurance like they are in some states (though it may be a good idea to do so).

Finally, it’s important to keep in mind that California is a “tort” state, meaning that the party responsible for an accident is the one who must pay all damages, medical expenses, and other related costs of those victimized in the crash.

What Can – and Can’t – Determine Your Premium in California
When looking for an auto insurance policy, you should be aware of how insurance companies price their premiums for California drivers. By law, insurance companies who write policies in California must weigh your driving record, driving experience, and annual mileage driven as the main factors in determining your rates.* Carriers are not allowed to primarily base their premiums on any other demographic components that are not backed up by causative data (like ZIP codes, for example).

Tips for Saving Money on Auto Insurance
That said, there are certain ways to get discounts on your auto insurance rate in California. These include driving a car with safety features like air bags, anti-lock brakes, or theft-proof devices. Other discounts are applied if you take a driver’s education course. Don’t be afraid to ask a prospective insurer what discounts may be available for you.

So before you purchase auto insurance in California, here are some steps you should consider if you want to save some money:

  • Adopt measures to minimize the number of miles you drive each year. This may mean carpooling, taking public transportation, or opting to rent a car on vacations or long road trips.
  • If you have an outstanding traffic violation and you have the means to have it wiped off your record, complete that process before signing up for insurance.
  • If you don’t have many years of driving experience, consider adding your name to the policy of a member of your household who is more experienced.
  • Look into policies with higher deductibles.

You must maintain proof of auto insurance if you want to drive in California. But if you know how the industry works, you can secure the proper coverage without busting your budget.

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