Auto Insurance Rate Increases in California: What You Need to Know

If you’re a driver in California, you may be familiar with the already steep costs of gas and vehicle maintenance. Another aspect residents might have to worry about next year is rising auto insurance rates. Fortunately, California residents who are aware of these changes may be able to better navigate cost elevations. Here, we’ll discuss several factors that may be responsible for these inflated prices, California’s auto insurance requirements, and how residents may be able to help lower their insurance costs.  

California minimum car insurance requirements

On September 28, 2022, Governor Newsom signed the Senate Bill 1107, also known as the Protect California Drivers Act. In this bill, the state’s liability requirements were revised to help drivers better navigate potential road hazards. Starting in January 2025, drivers will need to get a 30/60/15 minimum coverage limit in California, which means:

• $30,000 for bodily injury or death per person
• $60,000 for bodily injury or death per accident
• $15,000 for property damage per accident

Staying aware of California’s minimum car insurance requirements may help you avoid fees while staying compliant with state laws.  

Rate increase factors

Inflation is a factor that may increase costs related to vehicle repairs, medical expenses, and claims settlements. As prices for parts and labor continue to climb, insurance companies may adjust their premiums to align with these escalations.

Alongside inflation jumps, the number of accidents and claims have surged since the pandemic. After quarantine ended, U.S. states experienced a general increase in drivers who previously were working from home or traveling limitedly. With more vehicles on the road, the larger potential for accidents, leading to a higher volume of claims which may affect premiums.  

Another factor that may have influenced rate increases is advancements in vehicle technology, such as sensors or Advanced Driver Assistance Systems (ADAS). While elevated safety technology may be beneficial for drivers and their passengers, these advancements have also caused an increase in repair costs. Modern cars with unique parts may be expensive to repair or replace, which could be a component of car insurance increases in California.

Devastation from recent wildfires may also be affecting insurance rate escalation. Due to the climbing frequency of wildfires in California, insurance providers have experienced a boost in the number of claims submitted. A rise in insurance claims may be a major factor in projected insurance rate increases expected in 2025.  

To make informed choices about coverage, it may be important to understand these factors that could be influencing rising insurance costs.

How should California drivers prepare?

With liability requirement changes on the horizon and predicted insurance increases, you can take proactive steps that may help you prepare for these adjustments. If you live in the state, you can:

• Review and adjust coverage: Looking over your policy may help you understand what you’re paying for and adjust accordingly. You may consider purchasing uninsured motorist coverage, since rising insurance rates may push some drivers into being uninsured or underinsured. Without this coverage, receiving damage to your vehicle from an uninsured driver may be financially consequential.  
• Look for discounts: Insurance companies may offer discounts for safe driving, bundling policies, insuring multiple cars, or completing a designated driving course. You can ask your provider about what discounts are available and what discounts you may be eligible for.  
• Shop around for better rates: Not all insurance companies will adjust their rates in the same way. Comparing quotes from different insurers may help you make more informed decisions about insurance that fits your budget.  
• Maintain a clean driving record: A history of safe driving may help keep your premiums down. Avoiding accidents and traffic violations may contribute positively to your insurance costs in the long run.

Why choose Infinity Insurance Agency, Inc.  

Navigating the complexities of auto insurance can be daunting, especially with upcoming increases and changes. If you have questions about how these increases may affect you or if you want to explore personal or commercial insurance coverage options, you can call Infinity Insurance Agency, Inc. at 1-855-478-3705. We may help you locate the coverage that aligns with your needs and budget.  

For California residents, understanding circumstances that could impact insurance rates may be helpful in avoiding unnecessary expenses. By staying informed and taking the outlined steps that may lower your premium, you may be able to navigate these insurance increases better.