Why is Auto Insurance so expensive in California?

When it comes to auto insurance, California residents pay one of the highest insurance prices in the United States. Why is car insurance so expensive in California? There are several reasons, some of which may surprise you. Others may help you find insurance companies that offer the lowest prices.

Why is auto insurance so expensive in California?

Auto insurance premium costs in California have been increasing steadily since 2009. The bright sunshine state ranks third in the United States for auto insurance prices, averaging $ 2,219 annually as of April 2019, according to the report. from Insure.com. The highest average prices for annual auto insurance premiums are Michigan, $ 2,611 and Louisiana, $ 2,298. The average cost of car insurance premiums in California is 52% higher than the national average. In comparison, the average price in New York is $ 1,789 and in California it is $ 1,846.

More than a dozen insurance companies operating in California offer auto insurance policies, but State Farm, Travelers, Geico, USAA and California Farm Bureau offer the lowest prices in the state, according to a 2019 study by ValuePenguin. The cost of annual premiums depends on several factors, including where the driver lives, the number of uninsured drivers, driving records, credit scores, and insurance claims filed. The national average for 2019 is $ 1,457, an increase of $ 92 from the $ 1,365 of the 2018 national insurance price.

High-risk, uninsured drivers drive car insurance prices up

The California Department of Highway Safety and Motor Vehicles requires that all drivers have minimum levels of auto insurance coverage. California motorists must have $ 10,000 liability coverage for damage to property and property. Drivers must also have $ 10,000 in personal injury protection (PIP). Personal injury protection covers you up to the limit of your policy whether the accident was your fault or not. It is also prudent to have liability insurance for bodily injury, even if it is not required. If you cause an accident with your car, personal injury liability insurance pays for severe and permanent injuries or death that third parties may suffer. You can find more information about California Insurance license and fine for driving without a license California at carsforyourhelp.com (Link)

One reason why car insurance in California is so expensive is that California ranks number one nationally in the category of uninsured drivers. Approximately 26.7% of its drivers drive vehicles without insurance. If authorities arrest an uninsured motorist, his driving privileges could be suspended. There is no provision for temporary leave for work or school. These drivers also risk up to three years of vehicle registration suspension.

States with high percentages of uninsured motorists see insurance companies raising the cost of their auto insurance premiums. If you have a car accident with an uninsured motorist, your insurance company pays for your damages and losses under the coverage of the uninsured motorist in your policy. Claims that insurance companies pay for uninsured drivers result in higher premiums.

Also, California has a fairly large population of high-risk drivers. The state is home to a large population of senior drivers, as well as welcoming tourists, visitors who are unfamiliar with the highways, streets, and roads, and students who are attending the state’s many schools and universities. These circumstances help explain why insurance prices in the state exceed the national average.

Bad weather increases car insurance prices

True, Florida is known for its beautiful year-round weather. But what happens when a hurricane or violent storm hits the city and destroys or floods thousands of vehicles? What follows next are thousands of property damage claims. Insurance companies either pay claims to repair those vehicles or give them total loss and pay their monetary value. California auto insurance Licence companies compensate for losses by setting higher prices that take into account risk factors associated with the weather. Residents near the coast, waterways, or low riparian land where flooding may occur should expect to pay more in premiums.

Auto Insurance Companies Consider Where Florida Residents Live

Auto insurance companies use the location to set the costs of auto insurance prices for California residents. If you live in Miami, the average annual insurance premium is $ 2,198, and in Tampa you would pay an average of $ 1,841. In St. Petersburg the average is $ 1,497, in Orlando it is $ 1,417 and in Gainesville it is $ 961. Those cities have the highest insurance costs on average compared to people living in Jacksonville, Florida’s largest city. Jacksonville’s average annual premium is only $ 640.

Prices vary between communities in the same city. Before setting premiums, insurers review the number of car accidents, crimes, and claims in neighborhoods. Insurance companies set higher insurance coverage prices in areas where neighborhoods have higher risks. Additionally, auto insurance prices between companies in the same city can vary by more than $ 1,000 in annual premiums. The Value Penguin and Insure.com websites offer search engines that find the lowest prices based on ZIP codes and drivers’ ages.

Driving history and credit record matter

A good driving record helps you avoid paying higher prices. Generally, drivers under the age of 25 should expect to pay more. Married couples often pay less. Driving under the influence, speeding, driving without insurance, and guilt in accidents lead to higher auto insurance premiums.

Paying your bills on time helps, too. Nationwide, 92% of all insurers are said to use credit records when setting premiums. These insurers see the details of your credit record and the types of credit you have, including loans and credit cards. Your payment history, including late payments or late payments, also matters. To increase your chances of getting the cheapest car insurance, keep a clean driving record and good credit.

Companies Offer Cheap Auto Insurance in Florida

When buying cheap auto insurance in Florida, ValuePenguin suggests taking a look at the Florida Farm Bureau, GEICO, Travelers, and State Farm. Those companies offer driver coverage at an average annual cost of $ 529, a savings of $ 569 annually.

USAA offers reasonable auto insurance prices for veterans and military families. Florida Farm Bureau offers the cheapest auto insurance, $ 381, compared to $ 1,098, the state’s average premium.

Request more information from Discounts to Lower Costs

You may qualify for discounts to lower your auto insurance prices. Request information on discounts for car security features, anti-theft devices, multiple cars, and defensive driving courses. Mature drivers, seniors, veterans or service members, and good students often receive lower auto insurance prices. Driving a few-mile vehicle or having other insurance policies with the same company may reduce your premium payments.

Now you know the answer to the question, “Why is auto insurance so expensive in Florida? You also know things within your reach to get the cheapest auto insurance available. Maintain good credit, a clean driving record, get multiple auto insurance quotes, and ask for discounts before paying your next premium.