Why Is Car Insurance So Expensive in California? (2025)
The average annual cost of car insurance in California is $2,209, higher than the national average of $1,824 annually.
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Written byJess Ullrich
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Más de 10 años escribiendo sobre seguros y finanzas personales
Ex editora asociada de finanzas de Investopedia
Jess es experta en seguros, banca y otros temas de finanzas personales. Sus artículos han aparecido en numerosos medios de comunicación web, como Investopedia.
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5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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Table of contents
The average cost of full-coverage car insurance in California jumped from $1,738 in December 2023 to $2,681 in December 2024, according to Insurify data. This represents a 54% increase in car insurance rates in just one year. If you’re wondering why car insurance is so expensive in California, several reasons are behind the price hikes, including statewide regulations and environmental factors.
Here’s what to know about recent increases and how to reduce the cost of your coverage.
Quick Facts
Policy changes, environmental issues, and higher-tech vehicles are among the reasons for California’s high car insurance costs.
Other demographic factors can affect your premiums, too.
Drivers in highly populated areas, like Los Angeles, typically pay more for car insurance than people in less populated areas.
How California car insurance rates have increased
California drivers have seen massive insurance rate hikes since the COVID-19 pandemic, according to Insurify data. Issues like wildfires and severe natural events have contributed to higher costs. This graph illustrates how prices have changed recently.
Average California Car Insurance Rates Over the Past Two Years
Rates in this chart are two-year rolling medians in order to manage extreme market volatility seen over the past few years. Rates on the rest of the page reflect one-year rolling medians in order to prioritize the freshest data available.
Factors in California causing higher car insurance rates
During the COVID-19 pandemic, California froze insurance rates, meaning car insurance companies couldn’t increase prices for policyholders. While this provided temporary relief to California drivers, the freeze had some unexpected consequences when restrictions were lifted.[1]
In an effort to recoup revenue, many insurance companies hiked prices, and drivers bore the burden, causing car insurance rates to skyrocket in 2022 and 2023.
Here are a few other reasons why California’s average rates are often higher than the rest of the country.
Higher-tech vehicles
Other factors apart from insurance freezes also contributed to post-pandemic increases, including the popularity of high-tech cars that are more expensive to repair. As vehicle technology becomes more advanced, the cost to repair these vehicles tends to increase.
For example, many cars are now equipped with sensors in their rear bumpers and side-view mirrors. If someone rear-ends your vehicle or you get side-swiped and your side-view mirror is ripped off your car, you aren’t just paying to fix your bumper or mirror. You need to pay for new sensors, too, increasing your car repair costs and any insurance payouts you might receive after filing a claim.
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Policy changes
Unfortunately, consumers can’t expect much relief in 2025, as minimum car insurance requirements have increased after the 2022 passage of S.B. 1107.[2] One provision of this bill requires higher minimum coverage amounts for drivers.
As a result, on Jan. 1, 2025, minimum bodily injury liability coverage in California increased from $15,000 per person to $30,000 and from $30,000 per accident to $60,000. Plus, the minimum amount for property damage liability coverage tripled from $5,000 to $15,000 per accident.[3]
This legislation aims to provide more protection for California drivers if they’re involved in a crash, which can be beneficial. Unfortunately, it also increases car insurance costs since higher coverage amounts generally equate to higher rates.
Environmental challenges
Wildfires are an unfortunate fact of life in California, and they happen every year. More than 8,000 wildfires happened in California in 2024, damaging over 1 million acres of land, according to CalFire. NASA data also indicates that wildfires in the western part of the U.S. have increased in frequency and intensity over several decades, resulting in more widespread damage.[4]
The increased frequency and intensity of wildfires translate to added risk for both home insurance and car insurance companies, which in turn leads to higher insurance rates for California residents.
Factors that affect your car insurance premium
Beyond factors specific to the state of California, demographic factors, including your age, location, and driving record, can affect your car insurance premiums. Here’s what to know about some of the most important rating factors.
Age
Drivers ages 25 and younger typically have hefty car insurance premiums, with teenage drivers paying the highest rates. Teens have nearly four times as many crashes as drivers older than 20, based on total miles driven, according to the Insurance Institute for Highway Safety (IIHS).[5] This higher risk of crashes translates to more risk for insurance companies, which means more expensive premiums for young drivers.
The table below shows how car insurance prices vary across a few different age groups.
Age ▲▼ | Average Quote: Liability Only ▲▼ | Average Quote: Full Coverage ▲▼ |
|---|---|---|
| Teens | $203 | $459 |
| 40s | $103 | $233 |
| 60s | $91 | $205 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Location
Where you live also affects how much you pay for car insurance. For example, someone who lives in an area of California that’s more prone to wildfires may pay more for comprehensive coverage. You could also pay more if you live in a highly populated city with lots of drivers and increased accident rates.
For instance, rates in Los Angeles are $211 per month for liability insurance and $383 for full coverage. Premiums in the less densely populated city of Bakersfield average just $116 and $245 per month, respectively.
The below rates are estimated rates current as of: Saturday, February 1 at 11:00 AM PST.
City ▲▼ | Average Quote: Liability Only ▲▼ | Average Quote: Full Coverage ▲▼ |
|---|---|---|
| Bakersfield | $116 | $245 |
| San Diego | $118 | $240 |
| Fresno | $122 | $238 |
| Temecula | $122 | $245 |
| Chula Vista | $124 | $222 |
| San Jose | $129 | $256 |
| Modesto | $143 | $249 |
| Sacramento | $144 | $291 |
| Oakland | $147 | $335 |
| San Francisco | $147 | $326 |
| Long Beach | $152 | $296 |
| Anaheim | $155 | $276 |
| Los Angeles | $211 | $383 |
| Glendale | $241 | $443 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Driving record
If you have recent incidents on your driving record, your car insurance will probably cost more. That’s because past incidents like at-fault accidents, speeding tickets, and DUI charges mean more risk for insurance companies. Your insurer might deem you a high-risk driver due to your driving record, which means higher premiums.
Make and model of your car
In general, high-cost, newer-model luxury vehicles are more expensive to insure than older, more affordable cars. Luxury cars tend to cost more to repair, so insurance companies may pass this cost on to consumers in the form of higher premiums.
For example, insuring a brand-new Audi will likely cost more than insuring a Subaru Outback. The Subaru Outback — along with the Subaru Forester and the Honda Odyssey — is one of the cheapest cars to insure.
Teslas were among the most popular cars in California in 2023, followed by the Toyota RAV4, the Toyota Camry, and the Honda Civic.[6] Teslas tend to be expensive to repair, which means they’re also more expensive to insure.
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How to lower your car insurance rate in California
California car insurance might be expensive due to several factors outside your control, but you can control a few things to help you get lower rates. Here are some tips to reduce your monthly car insurance premiums.
Choose a higher deductible
When you file a car insurance claim, you pay a certain amount out of pocket before your coverage kicks in. This amount is called your car insurance deductible, and opting for a higher deductible generally means lower monthly premiums.
Reduce your coverage
If you drive an older, higher-mileage car, you might decide to switch from full coverage — which includes comprehensive insurance, collision insurance, and liability coverage — to basic liability insurance. Less coverage means more savings, but weigh the pros and cons of reducing your coverage before doing so.
Ask about discounts
The scope of car insurance discounts varies by company. Some may offer many discounts — including for safety features, good grades, and bundling — while others offer only a few opportunities to save.
Compare car insurance rates
Car insurance prices also vary by insurer. Because of this, comparing rates is essential to finding an affordable policy.
Why car insurance is so expensive in California FAQs
If you still have questions about car insurance rates in California, here’s some more insight into statewide costs.
Why are California auto insurance rates so high?
California auto insurance rates are high for a few reasons, including:
Environmental changes and stronger wildfires
Insurance companies trying to recoup revenue following pandemic-related rate freezes
Vehicles with higher-tech features that are expensive to replace if you’re in an accident
Recent policy changes resulting in higher minimum coverage amounts
What is the average cost of car insurance per month in California?
California drivers pay an average of $113 per month for liability-only insurance, while full coverage costs an average of $255 per month.
What is the cheapest car insurance company in California?
The cheapest car insurance company in California is Mile Auto, with an average monthly liability rate of $60.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
Sources
- Fox 2 KTVU. "California could see car insurance rates soar by more than 50% this year: Here’s why."
- CA.gov. "California's Low Cost Auto Insurance."
- California DMV. "Insurance Requirements for Vehicle Registration."
- NASA. "Six trends to know about fire season in the western U.S.."
- IIHS. "Teenagers."
- KRON 4. "This was the best-selling car in California in 2023 — and it’s not even close."
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Jess UllrichInsurance Writer
Jess is a personal finance writer who's been creating financial and business content for over a decade. Her work is published on Investopedia, MoneyWise, NextAdvisor, The HuffPost, and more. Prior to freelancing full-time, Jess was an editor at Investopedia, The Balance, and FinanceBuzz. Connect with her on LinkedIn.
Jess has been a contributor at Insurify since September 2022.
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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