Car insurance company quotes

Are you shopping for affordable car insurance quotes? California insurance companies are required to offer you a good driver's discount if you have a clean driving record. Read more to learn about California car insurance rates, laws, and programs.

Car Insurance Requirements

California law requires that you have a way to cover costs related to damages or injuries you may have caused in a car accident. Purchasing liability car insurance is the simplest and most common way people choose to meet this requirement.

The minimum amount of liability insurance you must have on your policy is:

Other Car Insurance Coverage

While liability coverage is the only type of car insurance coverage you are required to carry in California, there are several other types of coverage available to you, including:

Note: Adding comprehensive and/or collision coverage is generally optional. However, if your car is being financed, your lending or leasing company will require you to purchase comprehensive and collision coverage.

Other Forms of Financial Responsibility

Buying car insurance is the most common way to fulfill your financial responsibility requirements, but it isn't your only option.

Other options to meet the requirement include:

Proof of Insurance

You must be able to prove you have auto insurance to register your car or renew your registration. Your insurance company will give you an insurance card that can serve as your proof of insurance. Your car insurance card will have:

You will receive a new card every time you renew your car insurance policy.

Additionally, insurance companies in California are required to electronically report your insurance information to the DMV. The California DMV can use these electronic records to verify that you have car insurance.

Getting Pulled Over in California

If you are pulled over by a police officer, you must show your proof of insurance, along with your driver's license and car registration.

Violation Fines and Penalties

If you are pulled over in California without proof of car insurance or any other form of financial responsibility, you may face the following fines:

The court may impound your car and hold it until you are able to show a proof of insurance.

Suspended Registration

Not having car insurance in California can also result in a suspension of your car's registration if:

The DMV will send you a letter if your registration has been suspended due to not having car insurance. You can re-register your car with a proof of insurance at the cost of $14. You can apply for reinstatement:

California's Proposition 103

Before 1988, California was among only a small handful of states that had no state-governed regulations on the insurance industry. As a result, California auto insurance rates kept climbing to levels that were not affordable to many people.

To combat what many saw as arbitrary insurance rates, Californians voted into law Prop 103 on November 8, 1988, which called for consumer-driven regulation on insurance companies.

Under Prop 103, insurance companies were required to cut their rates to 20% less than what they were in 1987. Any rate changes from that point would have to be approved by the California Department of Insurance.

Among the provisions of Prop 103 are rules regulating how insurance companies determine your car insurance premiums and the Good Driver Discount policy.

Good Driver Discount Policy

Because of Prop 103, California law requires insurance companies to offer a 20% discount to good drivers. You qualify for this Good Driver Discount policy in California if:

Determining Your Insurance Premium: Credit Score

Prop 103 makes it illegal for insurance companies in California to use your credit history as a factor in determining the cost of your car insurance premium. Because of this, other factors may carry more weight.