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Is Car Insurance More Expensive In California?

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Joel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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Insurance Q&A: “Is car insurance more expensive in California?”

Yes and No. Insurance, similar to say housing, is more expensive in California than most other states, but not all.

Perhaps surprisingly, Californians do not hold the top spot when it comes to auto insurance premiums. In fact, California just missed the top five with regard to the most expensive states for auto insurance.

As touched on in a previous post, Michigan drivers live with the pain of knowing they have the most expensive car insurance in the nation.

Did You Say Michigan?

Let us guess. You weren’t thinking Michigan? Why Michigan? They must drive like maniacs, right? Wrong. State regulation and weather play a big part in the scheme of things up there.

Michigan is the only state that affords unlimited personal injury protection payments, which drives up costs.

Basically, your car insurance acts as a health insurance policy would in most states.

“You need $1,000,000 for your neck injury Mr. Jones? No problem, we’ll pass the costs onto every driver in Michigan.”

Who “Beats” California?

There are some lists you don’t want to be at the top of…and this is certainly one of them. Here are the top six states by auto insurance cost, based on a recent survey from

1. Michigan – $2,541
2. Louisiana – $2,453
3. Oklahoma – $2,197
4. Montana – $2,190
5. Washington, D.C. – $2,146
6. California – $1,991

As you can see, car insurance is a full $500 cheaper in California than it is in places like Michigan and Louisiana, despite things like housing being much cheaper.

But before you get too far ahead of yourself, note that these are average premiums. Not bare minimums, or necessarily the price you will receive when gathering insurance quotes.

And there are several ways to get a lower insurance premium, even if you live in California.

First off, there are multiple discounts available to drivers in every state, including California.  And most insurers will review your credit history, known as an insurance score, to generate your final premium. Put simply, pay your bills on time and you’ll pay less for insurance.

[Credit scores and car insurance rates.]

You can also raise your auto insurance deductible or opt for liability-only car insurance if you’ve got an older, inexpensive vehicle (see more ways to lower your car insurance premium.)

And be sure to learn more about how car insurance rates are determined to get the jump on lowering your overall insurance costs.

Read more: Top auto insurance companies in California.

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