The California good driver discount is 20% for residents who have had a valid driver’s license (from any state) for the past 3 consecutive years, have no more than 1 point on their driving record, and have no serious driving-related convictions. The good driver discount is mandated by California law, so every insurance company must provide it to drivers who qualify.
Requirements for the California Good Driver Discount
Licensed for the past three years without interruption. If you were licensed in another country for part of that period, you must have been licensed in the U.S. or Canada for at least the past 18 months to qualify.
No more than one driving record point. One-point offenses include speeding, running a stop sign, and causing a minor accident that results only in property damage.
No more than one violation resulting in traffic school. You are ineligible if you have taken traffic school more than once due to a citation in the past three years.
No at-fault accidents causing injury or death. Accidents that were not your fault will not affect your eligibility unless they added points to your record.
No DUI or other alcohol-related convictions on record. DUI convictions remain on record for 10 years, per California law.
If you’re unsure about your driving record or you’re wondering whether your insurer has already applied the discount, it’s always worth checking with your insurance company directly.
No, California is not a no-fault state for auto insurance. California is an “at-fault” or “tort” state, which means the person who is at fault for a car accident is responsible for paying for other people’s injuries and property damage resulting from the accident. Additionally, unlike in no-fault states, drivers in California can file lawsuits to seek compensation for even basic medical expenses after an accident.… read full answer
In typical no-fault states, drivers are required to carry personal injury protection (PIP) insurance to pay for their own medical expenses after a car accident, regardless of fault. In California, PIP is not required.
Key Things to Know About Insurance in California
When an accident occurs, the insurance company for each driver who was involved will assign an adjuster to determine who was at fault. To collect payment for their losses, victims must file a claim with the at-fault driver’s insurance company.
Depending on how long fault takes to be determined, drivers can file a claim with their own insurance company if they have coverage applicable to their own expenses, such as collision and comprehensive Their insurer can then recoup the cost from the at-fault driver’s insurer if the policyholder is not determined to be at fault.
California uses a pure comparative negligence system, meaning drivers can collect damages proportionate to their fault in causing the crash. For example, if they're 99% at fault, they can get 1% from the other driver.
Being an “at-fault” / “tort” state helps keep California’s insurance costs relatively low, compared to no-fault states.
California requires all drivers to carry liability insurance, a type of insurance that pays for others’ expenses after you cause an accident, such as damage to others’ vehicles and their medical expenses.
In addition to California’s minimum coverage requirements, you may want to purchase types of coverage that will pay for your own expenses after an accident. For example, collision and comprehensive insurance will cover damage to your vehicle, regardless of fault.
Car insurance in California is expensive because the state has multiple densely populated, high-crime urban areas. In California, you can expect to pay approximately $4,556 per year for full coverage car insurance or $1,291 per year for minimum coverage. Car insurance in California is about the same as the national average, which is around $2,000 annually for … read full answerfull coverage and about $700 per year for minimum coverage.
The cost of car insurance is steadily increasing, too, both in California and nationwide. As the cost of providing insurance goes up, the premiums insurers charge also rise. All insured drivers share the increasing cost of insurance. That is why your rates tend to go up every time your policy is renewed, regardless of whether any individual factors—like your driving record or location—have changed.
There are several unique reasons why car insurance goes up every year in California, too, even if your details remain the same.
Top Reasons Car Insurance Is Expensive in California
People in California are driving more. As a result, the number of accidents, claims, and payouts is rising, too. For example, there were approximately 3,558 fatal crashes in 2020 in California, versus 2,859 fatal crashes in 2014.
Auto repairs are getting more expensive. Vehicles today cost more to repair due to the added technology and features. For example, a National Association of Insurance Commissioners study found that the average cost of vehicle repairs was around 8% higher in 2018 than it was in 2014.
People in California drive uninsured. As the cost of car insurance continues to rise, more drivers take the risk of driving without car insurance. In 2019, 17% of drivers lacked even minimum liability insurance in California. The cost of uninsured drivers is passed on to consumers through higher premiums.
Healthcare in California is getting more expensive. Car insurance companies are hit hardest when paying out claims involving medical bills, and it’s not getting any cheaper. Healthcare spending increases by an average of 5.7% every year in California.
California is experiencing more severe weather. In California, weather events like wilfires, droughts, and floods are becoming increasingly common. These weather events cause insurers to pay out a higher number of claims, which tend to be more expensive and less predictable. As a result, they have to raise rates to keep pace.
However, there could be other issues elevating your rates.
If your driving record is clean and your rates are still high, your car insurance might be expensive because of your:
Age. Drivers under 25 and older than 65 pay more for auto coverage because they are statistically more likely to be involved in serious and fatal accidents. In California, 16-year-old drivers pay an average of $2,534 per year, 25-year-old drivers pay an average of $900 per year, and people over 65 pay an average of $732 per year.
Location and driving patterns. Population-dense cities have higher premiums than rural areas because city living usually means more accidents, more property crime, and more frequent claims. In California, the most expensive locations for insurance are Los Angeles, Long Beach, and Anaheim. You can also expect rates to change based on your driving patterns—long commutes or regular driving in high-risk areas can cost you.
Financial responsibility. You can demonstrate financial responsibility by maintaining minimum car insurance with no gaps in coverage. Letting your coverage lapse could result in a higher rate when you get your next policy.
Claims history. Numerous recent claims can drive up your premiums. That's one reason why it sometimes makes sense to pay out of pocket rather than file a claim, especially if a claim won’t get you much more than your deductible.
How to Get Cheaper Car Insurance in California
Multiple factors affect the cost of car insurance. Some things you can’t control, but you do have a say in most of the contributing factors. Driving safely, obeying traffic laws, and keeping a clean driving record are the best ways to keep your insurance costs down.
Other than that, the best way to lower your car insurance costs is to compare rates from at least three insurance companies. Ideally, you should check your rates every 6-12 months, when you renew your policy. But at a minimum, be sure to check your record and shop for rates every three to five years, since you may be able to get a lower rate if a traffic violation falls off your record.
In California, the most expensive policies cost roughly $2,673 per year, and the least expensive coverage costs around $895 per year, when all driver profile information is the same. That means you could save as much as $1,778 simply by shopping around. Be sure to confirm you’re getting all the discounts you’re eligible for, too.
You can get low-mileage car insurance from several insurance companies if you are someone who drives infrequently. Insurance companies provide options for drivers who drive short distances, as well as for those who demonstrate safe driving practices.
Some of the options include discounted premiums for driving under a certain mileage, plans that are priced based on how you drive, or coverage from companies that provide policies exclusively based on driving distance and behavior data. Geico’s Drive Easy and Allstate’s Drivewise are two notable examples of programs that price premiums based on a driver’s actual habits.… read full answer
Availability varies by company and state, but taking advantage of low-mileage coverage or discounts when it makes sense can be a great way to save money on auto insurance.
Most insurance companies quote premiums based on a standard average number of miles driven each year – typically, 12,000 miles annually. If you drive an average of 7,500 miles per year or less, most insurance companies will consider you a low-mileage driver, and will adjust how they calculate your premium accordingly. You can contact your insurance company to discuss readjusting how your premium is calculated, based on your lower-than-average annual mileage.
The price of usage-based insurance coverage depends on how many miles you drive per year, and in some cases, your driving behavior. Typically, insurance providers will ask you to download a phone app or they will send a device that you attach to your car. The phone app or device will monitor how far you drive, and in the case of telematics devices, how you drive. The company will then use the data it gets to calculate your insurance rate. So, if you drive less and generally don’t exhibit unsafe driving behavior, such as accelerated breaking, your insurance rate will be lower. Companies like Progressive, Geico, Allstate, State Farm and Esurance all provide usage-based or telematics insurance packages.
Low-mileage drivers can save on auto insurance by finding coverage from usage-based companies. These companies operate on a pay-as-you-go model, meaning the less you drive, the more you save. Two such companies are Metromile and Root. If you do not drive frequently, one of these companies might be a great way to obtain low-cost car insurance.
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