Bankrate, a company specializing in consumer financial services, recently published a report revealing that drivers in California pay an average auto insurance premium of $2,697. This figure surpasses the national average of $2,543. The report also indicated that Californians spend approximately 2.95% of their household income on car insurance.
The report further highlighted that the average cost for car insurance premiums across the country escalated by 26% in 2023. Since 2021, car insurance costs have surged by 52%, with U.S. drivers previously paying an average of $1,674 for full coverage auto insurance. Within California itself, San Francisco drivers bear the brunt of this increase, shelling out an average of $2,947 for their car insurance premiums - a staggering $404 more than the national average.
According to Bankrate's findings, several factors influencing car insurance costs are beyond drivers' control. These include inflation and state-mandated insurance requirements. However, other factors contributing to a rise in insurance costs fall within drivers' purview such as driving violations and lapses in insurance coverage. The report also noted that California drivers experience the highest percentage increase in insurance costs nationwide following at-fault accidents at 56%.
Bankrate's Chief Financial Analyst Greg McBride commented on these trends saying, "Auto insurance rates have been rising at a breakneck pace." He added that although "the pace of increases will eventually slow," it does not imply a reduction in premiums. McBride advised consumers to shop around and compare coverage options given the competitive nature of the insurance market. He also suggested exploring whether increasing deductibles could potentially lower premiums for those with substantial savings.
In another separate study conducted by Bankrate, it was found that California's higher-than-average car insurance costs can be attributed to several factors including high living expenses, "low-ranking infrastructure," and an at-fault policy for car accidents.
As stated on the company's website, Bankrate offers resources such as comparison tools to assist consumers in making informed financial decisions. The company boasts a user base of over 100 million people annually and was established in 1976 under the name Bank Rate Monitor.