Car insurance in California is among the most expensive in the United States, leaving many drivers wondering why they pay such high premiums. The answer lies in a combination of state laws, population density, accident rates, and natural disaster risks. By understanding these factors, you can make informed decisions about your coverage and explore ways to save on your policy. Deldar Injury Attorneys breaks down reasons why car insurance is so expensive in California, while also explaining how recent changes in state laws might affect your rates.

California Car Insurance Price Factors

Car insurance rates in California are influenced by several unique factors, making it important to understand what contributes to these high premiums. Let’s take a closer look at the key reasons behind why is car insurance so expensive in California:

High Population Density: California is the most populous state in the U.S., and with more drivers on the road, the likelihood of accidents increases significantly. Urban areas like Los Angeles and San Francisco experience higher traffic congestion, leading to a higher frequency of claims.

Strict State Regulations: California requires insurers to base rates primarily on factors such as driving history, miles driven, and years of experience. Insurers cannot use credit scores or other personal factors, limiting their ability to spread risk and resulting in higher premiums for all drivers.

Uninsured Drivers: According to several studies, California has one of the highest rates of uninsured drivers in the country. When uninsured drivers cause accidents, the costs are passed on to insured drivers through higher premiums.

Natural Disasters: California is prone to wildfires, floods, and earthquakes, which can cause significant damage to vehicles. Insurers factor this added risk into car insurance rates.

Litigation Costs: California has a high rate of personal injury claims and lawsuits related to car accidents. Legal expenses and payouts increase the cost of insurance for everyone.

How Do California Car Insurance Rates Compare to Other States?

California’s car insurance rates are consistently higher than the national average. According to industry data, the average cost of full coverage car insurance in California is approximately $2,973 per year, compared to the national average of $2,638. Factors like high repair costs, frequent accidents, legal fees, and the rest of the list above contribute to the disparity. Knowing the answer to, why is car insurance so expensive in California helps you make informed decisions when selecting a policy.

How Does Senate Bill 1107 Impact Car Insurance Rates?

The recent implementation of Senate Bill 1107 increases the minimum auto insurance coverage limits in California. Under the new law, drivers must carry at least $30,000 in bodily injury liability per person (up from $15,000) and $60,000 per accident (up from $30,000). While this change provides better protection for accident victims, it has led to higher costs for policyholders. For more information on how Senate Bill 1107 impacts insurance rates, read our blog about New California Car Insurance Laws in 2025.

Legal Perspective

By understanding why is car insurance so expensive in California, you can identify areas where you might save money. Whether it’s shopping for discounts, maintaining a clean driving record, or understanding new laws like Senate Bill 1107, proactive steps can make a significant difference. At the end of the day, getting into a car accident will drive up your insurance costs the most. This is where our personal injury attorneys at Deldar can help!

Our team will guide you through the complex insurance claims process. With compassion in mind, our attorneys fight aggressively to secure the compensation you deserve. We try to minimize the stress for you and your family. We handle every aspect of your case, from negotiations to litigation, so you can focus on recovery. Contact us today at (844) 335-3271 for a free consultation and let us help you move forward with confidence.