Why Is Car Insurance So Expensive in California?

California drivers pay around 10% more for car insurance than the national average, according to Compare.com data. Car insurance is expensive in California for multiple reasons, including state regulations, severe weather patterns, increasing claims frequency, and repair costs.

Many factors — like your age, credit history, driving record, vehicle, and ZIP code — also affect how much you’ll pay for auto insurance in the Golden State. But even with higher-than-average car insurance rates, you can still save money on your policy.

Here’s why Californians pay more and how to get the best price on the coverage you need.

Breaking Down California’s High Auto Insurance Rates

Drivers in California pay an average of $98 per month for liability coverage and $222 for full-coverage insurance, according to our data. In comparison, the national averages are $108 for liability coverage and  $192 for full coverage.

California’s rate increases are due to a variety of factors, including:

• Climate risk: Damage from high winds, wildfires, and flooding from heavy rains are becoming more common in California, leading to more comprehensive insurance claims for weather-related damage.^[1]

• Vehicle parts and auto repair costs: California has some of the nation’s highest auto repair bills.^[2] The cost of vehicle parts continues to rise due to supply chain issues and tariffs.^[3] Growing claims expenses push insurers to raise auto insurance premiums to recoup revenue losses.^[4]

• Thefts and vandalism: California leads the country in catalytic converter thefts and vehicle theft rates, according to the National Insurance Crime Bureau.^{[5] [6]} For example, Mercury Insurance saw a 40% rise in the number of comprehensive claims for auto theft and vandalism in California in 2021.

• State regulations: As of Jan. 1, 2025, Senate Bill 1107 requires California drivers to have higher liability limits. Though the legislation aims to protect Californians in a crash, higher minimum-coverage requirements drive up insurance rates.^[7]

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How to Save Money on Your Car Insurance in California

Although California car insurance may be expensive, you still have ways to save money on your premium. Some tips to lower the cost of auto insurance in California include:

• Shop around regularly. Many factors go into insurance pricing, and every company has its own way of calculating rates. Comparing car insurance quotes when your current policy renews or when you make a change can ensure you’re always getting the best deal.

• Raise your deductible. If you can’t afford to fix or replace your car, it’s usually worth having comprehensive and collision coverage. Increasing your deductible lowers your premium, but you’ll take on more financial responsibility when you file claims.

• Bundle your policies. The multi-policy discount usually provides the largest car insurance discount, and you can get it by bundling your home and auto insurance with the same company.

• Consider telematics. If you’re a safe driver, allowing your insurer to track your driving habits could lead to significant savings.

The Cheapest Car Insurance Companies in California

One of the best ways to save money and avoid expensive California auto insurance premiums is to compare rates from multiple companies. If you’re unsure where to start, check out the table below to see the five cheapest insurers in California, according to Compare.com data.

The cheapest car insurance company in California is USAA. Its average rate for liability coverage is $81 per month, according to our research.

FAQs About Why Car Insurance is Expensive in California