Top 10 Car Insurance Companies in California
When moving to a new state, your insurance rates may change. Depending on what factors precipitated the change, you may be able to purchase a new auto policy and receive a substantial discount by selecting a new insurance company. Alternately, if you are a new driver in California and are seeking auto insurance, you may be wondering what the best companies are to obtain insurance from.
Car insurance rates depend upon several factors. While some of these are directly related to your driving history, some are dependent on your own demographics. How old you are, your marital status, your credit score and where you live all factor into your car insurance rates. If any of these details change, you will see your rates change.
At all times, auto insurance companies determine their rates by assessing risk. If a vehicle is at high risk of being damaged, that vehicle will cost more to insure than another vehicle that will not sustain damage. Risk can be caused by the driver, but can also be affected by weather, vandalism and other factors.
Why does where I live matter to car insurance companies?
Car insurance rates differ from state to state and even from one ZIP code to the next. Whenever you purchase auto insurance, you need to provide a physical address in the state you are living in. This address will be used to pinpoint where the vehicle will be kept, and is one of the many factors involved in determining insurance rates.
There are several reasons why auto insurance costs vary from one place to the next. Weather plays an important factor. Because vehicles can sustain damage during weather events, auto insurance companies pay special attention to any common weather disasters in a particular area. For example, states that are especially prone to hail and windstorms pose a significant threat to insurance. In that regard, California is less of a risk than other states.
Crime rates, especially property crimes like theft and vandalism, play another important role in determining auto insurance. States, cities or neighborhoods with a high incidence of crime will have higher insurance rates than those with a low crime rate. The more likely your insurance company will need to replace a stolen vehicle, the more the company will charge for monthly premiums.
A list of the top 10 worst cities for car theft features six California cities: Modesto, San Diego, Bakersfield, Stockton, San Francisco and Fresno. The high population in California coupled with its proximity to the Mexico border may be responsible for the higher-than-average rates of auto theft.
The other reason why auto insurance costs more in some cities than others is because of driver habits. Cities with long commutes and heavy traffic will have higher insurance premiums than less densely-populated areas. Multiple-car accidents are much more common in areas with bumper-to-bumper traffic than they are in rural areas; these accidents are some of the most expensive claims that can be filed, so insurance companies charge higher premiums in locations where these are mo likely to occur.
California has the highest concentration of licensed drivers of any state. It is also a very large state, with sprawling cities. This means that commuters travel a long distance each day, multiplying their exposure to other drivers and increasing chances of an accident. California also has a fairly high incidence of uninsured drivers, leading to accidents caused by motorists who are unable to pay for the damage; this can drive up insurance premiums as well.
How expensive is car insurance in California?
No two insurance policies are the same in any state. Specific rates will vary depending on the customer and his or her driving record and other factors. In California, the average cost of insurance is around $1,991 annually, or roughly $165 per month. This is the sixth highest average insurance rate in the country, trailing behind states like Michigan and Oklahoma.
Of course, your rates may be higher or lower than the state average depending upon your driving habits, the type of car you drive and any discount programs you are able to take advantage of.
California Car Insurance Requirements
The state-required minimum limit for auto insurance in California is quite low, with property damage liability coverage at $5,000 and bodily injury coverage at $15,000 per person up to $30,000 each accident. It is probably safer to opt for higher coverage, however, as it is very easy to exceed these minimums in a moderately severe accident. Most people opt to pay for $100,000 property damage liability and up to $300,000 in injury coverage, but you can choose limits that meet your needs.
In order to have full coverage in California you must also purchase collision and comprehensive coverage. You may also choose to buy rental reimbursement coverage and uninsured motorist coverage. In the case of uninsured motorist, be aware that California only pays under this coverage if you are in an accident with someone who is known and proven to be uninsured. If this happens, your deductible will be waived and your insurance company will pay for your damage under this coverage rather than using your regular collision. You cannot receive the deductible waiver for hit-and-run accidents.
Top 10 Car Insurance Companies in California
While many of the same major national insurance companies are popular insurers in California, some local companies also make an appearance on this list.
1. State Farm: The largest insurer in the country by market share, State Farm insures roughly twice as many vehicles than any other insurance company. Its headquarters are located in Bloomington, Illinois.
2. AAA: Known as The Motor Club, AAA is best-known for its roadside assistance programs but also provides auto insurance. Branches of AAA exist in several states, but the primary corporate headquarters is in Heathrow, Florida.
3. California State Automobile Association Inter-Insurance Bureau: Serving Northern California, Nevada, and Utah, CSAA is a large motor club that functions almost exactly like AAA. Sometimes both companies will be brokered by a single agent. This company originated in San Francisco, California.
4. Mercury Insurance Company: Until 1990, Mercury existed solely in California; it has expanded since then, but continues to insure primarily Californians. The company focuses on providing low-cost insurance to medium and high-risk drivers. Mercury is headquartered in Los Angeles, California.
5. Allstate: The second largest insurer in the country, Allstate offers policies in every state. The company was founded in 1931 as part of Sears, Roebuck, & Co. and did not become separate until 1993. The home office is in Northfield, Illinois.
6. Mid-Century Insurance: A subsidiary of Farmer’s insurance, this financial institution is actually owned by a Swiss company. The United States headquarters are in Los Angeles, California.
7. 21st Century Insurance: Also called Century 21, this is another subsidiary of Farmer’s Insurance Group. It is also headquartered in Los Angeles, California but funded by a Swiss financial company.
8. Farmers Insurance Exchange: One service of the financial institution Zurich Financial Services in Switzerland, Farmer’s Insurance and its subsidiaries are popular options throughout the United States, especially California.
9. Infinity Insurance Company: A new insurance company, Infinity was founded in 2002 when it broke away from AFG. Sold entirely through independent agencies, Infinity is quickly growing in popularity. The company is housed in Birmingham, Alabama.
10. Progressive: Founded in 1937, Progressive has recently seen a rise in policies due to a focus on direct sales. The company is currently headquartered in Mayfield Village, Ohio, and sells a large number of policies through independent agencies and its website.
No matter what insurance company you choose to work with, you can save money on your insurance premiums by being a safe driver. While some insurance companies may be more popular in certain states, the best insurance company for you will be the one that provides you with affordable rates and excellent customer service.
You can start shopping for a new insurance company online by searching for a free insurance quote, or you can search for a local agent. Many local agencies carry multiple types of insurance, so you may have a wide variety of companies to choose from within a single agency. Whether you decide to purchase your auto policy independently or use an agency, be sure to take advantage of any safe driving discounts that your company offers. By shopping for the best rates and maintaining a safe driving history, you can be sure to obtain affordable car insurance.