Best car insurance in California for 2025

California law requires all drivers to carry a certain minimum amount of liability insurance to drive legally in the state. Although many insurance experts would recommend that you purchase more than the minimum to be more adequately protected in the event of a serious accident, you will need at least the following:

• $30,000 in bodily injury liability coverage per person
• $60,000 in bodily injury liability coverage per accident
• $15,000 in property damage liability per accident

California also requires that insurance companies offer you uninsured and underinsured motorist bodily injury coverage, along with uninsured motorist property damage, but you can decline in writing if you do not want to have and pay for them. Understanding California’s car insurance laws can help you understand if you need additional coverage or higher limits.

If you finance or lease your vehicle, you may need to purchase a car insurance policy that complies with your financial institution’s requirements. For example, collision and comprehensive insurance are typically optional coverage types, but if your car is financed, most lenders will require you to purchase them. This is commonly known as a full coverage policy.

Your financial institution may also require you to purchase higher liability limits, especially if you lease your vehicle. You might also want to consider gap insurance, which is designed to pay the difference between your vehicle’s actual cash value and the loan or lease amount if your car is totaled or stolen. According to the Insurance Information Institute (Triple-I), it is typically cheaper to purchase gap insurance from your insurer instead of from an auto dealer.

Every driver has a different set of circumstances. You might live in an area where traffic and tourism are heavy, like Los Angeles or San Francisco. Or, you might need to insure a teen driver. Or, you might have an accident on your driving record. Whittle down your list of potential companies by identifying those that offer the types of coverage you want and discounts for which you qualify.

There isn’t a singular car insurance company that’s cheapest for all drivers in California (or any other state). Car insurance rates vary widely from driver to driver and company to company based on several rating factors individual to you and your vehicle, as well as the coverage you choose. Minimum coverage usually saves you money on rates, but full coverage can provide more financial security in the event of vehicle damage or personal injury. Experts recommend comparing quotes from several insurers for the same coverage types and policy limits in order to find the best deal available to you. Bankrate’s research on the cheapest coverage in California may be useful in identifying carriers to seek quotes from first.

No, California insurance carriers are not allowed to consider credit history when determining car insurance rates. The state of California is one of a handful that does not allow car insurance companies to consider your credit rating as a factor when calculating car insurance rates. What this means is that your credit score will not affect your car insurance costs in this state, whether your credit rating is poor, good or excellent. California also prohibits the use of gender in auto insurance ratings. Credit history is allowed as an auto insurance rating factor in all states except California, Michigan, Hawaii and Massachusetts.

California’s Low-Cost Automobile Program (CLCA) could be a potential solution for drivers who meet its low-income requirements and want savings on car insurance. However, it’s important to understand that auto insurance policies through the CLCA are not like standard car insurance policies. One such caveat is that its coverage is below state minimum requirements. For this reason, and because of its strict eligibility requirements, CLCA isn’t intended as an option for most drivers wanting cheap car insurance in California.

California allows self-insurance but requires making a sizable deposit or purchasing a surety bond. In either case, the driver must provide $75,000 to self-insure their vehicle. While California allows this, drivers should be cautious before deciding between self-insurance and traditional car insurance. The limits of liability and the potential out-of-pocket costs are essential to be aware of before making this decision. For instance, without insurance, you are financially responsible for all damage you cause with your vehicle. Consider speaking with an insurance agent to decide what’s right for you.