You opened your renewal notice, saw the new premium, and thought — wait, what? I didn’t have any accidents. I didn’t get any tickets. So why is my car insurance higher than it was last year?
You’re not imagining it. And you’re definitely not alone. Auto insurance rates in California have gone up significantly over the past few years, and a lot of people are feeling it. Let me explain what’s actually driving it — and more importantly, what you can do about it.
Why Rates Are Up Across the Board
First, some of this has nothing to do with you personally. Insurance companies look at big-picture trends when they set rates, and the last few years have been rough for the industry in California:
Repair costs are way up. Modern cars are packed with sensors, cameras, and computers. A fender bender that used to cost $800 to fix might now cost $3,000 or more because a camera is embedded in the bumper. Parts prices have also gone up with inflation and supply chain issues that still haven’t fully resolved.
Medical costs have increased. When there’s an injury claim after an accident, the medical bills that insurance companies pay out have risen substantially. That cost gets passed along through premiums.
More accidents happening. Distracted driving has gotten worse. More miles are being driven post-pandemic. Claim frequency is up in California, which pushes rates higher.
Wildfires and weather events. California has had serious wildfire losses in recent years. Even if you’re not in a fire zone, insurance companies spread risk across their whole book of business in the state.
Insurers pulling back. Some major carriers have reduced their California business or stopped writing new policies altogether. Less competition generally means higher prices for everyone who’s still in the market.
Reasons Your Rate Specifically Went Up
Beyond the market-wide increases, there are things on your individual record that can push your rate higher:
- An accident you were involved in — even if it wasn’t your fault in some cases
- A ticket (speeding, running a red light, cell phone use)
- A claim you filed, even a small one
- Adding a new driver to your policy, especially a young driver
- Moving to a different zip code (urban areas typically cost more)
- Your credit score dropped (in states where that’s allowed — California has restrictions on this but it can still be a factor)
- Your vehicle’s value went up (yes, used car values have been inflated)
What You Can Actually Do
Here’s the part most people skip — there are real ways to bring your premium down.
Shop around. This is the most effective thing you can do. Rates for the exact same coverage vary enormously between insurance companies. If you haven’t compared rates recently, you might be surprised. I shop multiple carriers for my clients and the difference is often $50 to $100 a month or more for the same coverage.
Raise your deductible. If you can afford to pay more out of pocket in the event of a claim, raising your deductible from $500 to $1,000 can meaningfully lower your premium.
Check your coverage on older vehicles. If you’re driving a car that’s 10 or 12 years old and it’s not worth much, carrying comprehensive and collision coverage on it might not make financial sense. If the car’s value is $5,000 and you’re paying $1,200 a year for full coverage, the math doesn’t add up. Dropping to liability-only on older vehicles can save a significant amount.
Ask about discounts you might not know about. Good driver discounts, multi-policy discounts (bundling auto with home or renters), paperless billing, paying in full — these add up. Most people aren’t on every discount they qualify for.
Take a defensive driving course. Some insurers will give you a discount for completing an approved course. It usually takes a few hours and can knock a percentage off your premium.
Maintain a clean record going forward. Tickets and accidents typically stay on your record for 3 years. Once they fall off, your rate should come down. Drive clean in the meantime and remind your broker when those items age off.
Don’t Just Accept the Renewal
A lot of people just pay whatever their renewal says without questioning it. If your rate went up more than you expected, that’s your signal to shop around. Insurance companies count on inertia — they know most people won’t switch even if they’re overpaying.
If you want a second opinion on your current rate, give me a call. I’ll compare what you’re paying against what’s available in the market right now and tell you honestly whether you’re getting a fair deal or whether there’s something better out there. No obligation.
Elizabeth Govea — EGP Insurance
📞 (562) 248-6840
✉ [email protected]
CA License #0I03196