Auto Insurance

How Much Have Auto Insurance Rates Increased in California?

In the last five years California has experienced below average rate increases for its auto insurance. In this article we give an overview of car insurance rate hikes in California as well as explain what California can do to save money.

In California, auto insurance rates have increased at a slower pace relative to the rest of the country. In this analysis, we break down how the largest auto insurers in California have raised rates since 2012.

Car Insurance Rate Increases in California

Auto insurance has increased nationally by 25% since 2011 while in California they have increased by an average of 18% in that same time. Nine of the 13 largest insurance groups in the state have raised rates by a double digit percent in the past six years, though only five have been above 20%, with none greater than 30%. Compared to states of similar size, Californians should be content with how relatively little their rates have increased. That said, California has some of the highest auto insurance rates in the country.

Company201220132014201520162017Total Inc. Since 2011
Allstate0%0%1%0%6%6%13%
American Family0%0%0%0%0%0%0%
Auto Club0%-4%0%0%0%7%3%
GEICO0%1%0%0%0%6%7%
California State Auto0%0%0%7%0%7%14%
Farmers7%2%0%1%7%7%26%
Liberty Mutual3%6%3%2%0%4%20%
Mercury4%6%2%7%6%2%29%
Nationwide7%5%2%4%6%0%26%
Progressive0%2%1%4%2%0%9%
State Farm0%4%4%6%6%7%30%
Travelers7%3%3%0%0%1%14%
USAA-2%0%0%0%0%0%-2%
Average Rate Increases2%2%1%3%4%5%18%

To see how each of the Golden State's major auto insurers stacked up you can look at the graph below:

Image shows cumulative car insurance rate hikes in California by company since 2011

Auto Insurance Rate Increases in California Compared to Other States

California has had below average rate increases in the past half-decade. The 18% average statewide increase pales in comparison to the 54% increases in Georgia and 47% increases in Michigan. Furthermore, California has had the lowest increases in the entire western United States, with both Oregon and Washington experiencing above average rate hikes.

Map shows how states compared for auto insurance rate hikes since 2011

What Can Californians Do if Their Car Insurance Rates Are Raised?

Even though Golden Staters have been fortunate to not see their rates increase too heavily, there are still ways to save money on your auto insurance premiums.

Switching Insurers

You should compare quotes to see if there are better rates in California. A vast majority of policyholders will go years at a time without considering a different auto insurance company. This can end up costing you hundreds or even thousands per year, especially if you were at State Farm for example. State Farm has raised rates by 30% in the past six years--way over the state average. If you were shopping around you could have found a cheaper rate at another company. We recommend you search for a new policy at least every three years, and ideally once a year. In San Diego for example, rates vary by several thousand dollars for the same type of driver.

Adjusting Your Limits

You can be overpaying if you are over insuring yourself. While we recommend collision and comprehensive insurance for most drivers, if your car is worth more than 10 years old and/or worth less than $3,000, you could probably forgo the coverage. The cost will be worth more than the vehicle over five years, making it not worth the price. We found cutting out collision and comprehensive insurance could save you over 50% of your premium--though remember only if your car is not valuable.

Your liability limits may also be too high. If you carry $75,000 in assets between your car and bank accounts for example, your liability limits do not necessarily have to be greater than that. When it comes to liability, you technically just need enough to protect the total amount you can be sued for. We only recommend this option though if you are truly struggling to afford your auto policy. For most people we recommend buying as much liability insurance you can afford.

Applying for Car Insurance Discounts

Discounts are another way to save money on your auto insurance. Taking a defensive driving course can usually save you between 5% to 10% on your premium. Installing an anti-theft device is also another way to save you 5% on your premium. You can see a larger list of discounts most auto insurers offer here.

Sources
Nielsen iClout data
Ratefilings.com

Mark Fitzpatrick

Mark Fitzpatrick is a Research Analyst at ValuePenguin focused on the insurance industry. He previously worked in Country Risk Management at State Street Corporation.

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