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.
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 $1,780 per year for full coverage car insurance or $636 per year for minimum coverage. Car insurance in California is more expensive than the national average, which is around $1,500 annually for … read full answerfull coverage and about $600 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. In California, there were approximately 3,304 fatal crashes in 2018, versus 3,074 fatal crashes in 2014.
California auto repairs are getting more expensive
Another reason California auto insurance is getting more expensive is that cars are becoming more expensive to repair. In 2016, the average cost of car repairs in California was $892.55, up from $752.78 in 2012. Vehicles today cost more to repair due to all the technology and features inside them now.
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 2015, 15% 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, severe weather events like wildfires, droughts, and flooding 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 $7,656, 25-year-old drivers pay an average of $2,609, and people over 65 pay an average of $1,848.
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 Paramount, Huntington Beach, and Mission Viejo. 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. In California, drivers with no credit pay 0% more on their premiums than drivers with excellent credit. You can also demonstrate financial responsibility by maintaining minimum car insurance with no gaps in coverage. Letting your coverage lapse could raise your rate by as much as 6% in California, when you get your next policy.
Claims history. You should avoid filing small claims that can drive up your premiums. In California, the average collision claim raises a driver’s rates by $1,351.20, which amounts to $4,054 over the course of three years. If you have a $500 deductible and a $1,500 claim, you’ll end up paying $4,554 through insurance, versus $1,500 out of pocket. In that case, filing a claim is not the best choice.
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 $2,033, and the least expensive coverage costs around $942, when all driver profile information is the same. That means you could save as much as $1,091 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.
Low-Mileage Premium Reduction
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.
Usage-Based Insurance Coverage
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.
Usage-Based Insurance Companies
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.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.