California is the most populated state in the U.S. with over 37 million inhabitants (2010). The Golden State covers more than 155 thousand square miles, making it the third largest state in size. Los Angeles is the largest city in California with a population of nearly 3.8 million residents (2010). Californians traveling on Interstate 15, Highway 5, or Route 101 should maintain reliable California auto insurance for their vehicles. An accident can happen any time on I-10, Route 395, or the South Bay Freeway, but with quality car insurance in place, Californians can be prepared for the unexpected.
California has a very active insurance regulatory environment. While some believe this helps consumers, conventional wisdom suggests that a free market is the best consumer protection, especially in a highly combative industry such as auto insurance. For example, California ties auto insurers hands by not allowing them to use credit information as a criteria for establishing auto rates. Credit information has proven to be a key proxy variable for auto actuaries in that it develops a high correlation to actual loss. When auto underwriters are not certain about measuring risk, they will commonly error on the high side in establishing rates.
California is the auto theft center of the United States. Seven of the worst cities in the nation for auto theft are in California. If you’re buying theft coverage you can expect the cost to be high.
On average, employed residents of California spend about 27 minutes commuting to work (2010). Whether they live in Los Angeles, Crescent City, or Bakersfield, Californians traveling locally or across the State face similar risks when they head out on the road, like distracted drivers, rush hour traffic congestion, and lane closures due to construction. Given these and other hazards to California drivers, it is important that they purchase dependable auto insurance in case of property damage or a collision.
Key Statistics according the Insurance Information Institute and the National Highway Safety Administration:
Nationwide: 12.6% (2012)
California: 14.7% ((2012)
Insurance Coverage Requirements:
Bodily Injury Liability
Property Damage Liability
In most instances motorists are required to carry a minimum of $30,000 for all persons injured in an accident, with a maximum of $15,000 per person. They are also required to carry $5,000 for property damage. California also has a lower limit requirement for low-income drivers. If you’ve had a major medical experience lately, or know someone who has spent several days in a hospital you probably realize how low these limits are compared to the reality of hospital care costs. A more common limit for California drivers is $100,000 per person, $300,000 per accident bodily injury and $100,000 per accident property damage. Many consider an umbrella with an additional $1,000,000 in limits available. Considering the chain reaction accidents that occur on California roads it would seem prudent to have higher limits of auto insurance protection.
Average Car Insurance Premium
The Insurance Institute uses an “average person” to establish an average rate for an average car. This figure is only good for comparison as so many factors go into establishing an auto rate.
National Average Cost Per Year: $841(2013)
California Cost Per Year: $782 (2013)
Fatalities: 3,074 (2014)
Alcohol Impaired Driver Fatalities: 882 (2014)
Fatalities per 100 million miles driven (CA): .94 (2013)
Fatalities per 100 million miles driven (Nationwide): 1.09 (2013)
By reaching out to a local independent insurance agent, Californians can learn more about the kinds of car insurance available in their State and get answers to their questions about coverage. By meeting with an experienced independent insurance agent who provides personalized service and attention to detail that they will not find elsewhere, residents of California can purchase the right auto insurance policy to keep their vehicles protected, wherever they drive.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.