Why Are California Car Insurance Costs Up?
Written by The Clearcover Team | 3 minute read
If you live and drive in California, you already know that it’s one of the most expensive states in the country for car insurance. And the costs keep increasing. The average premium rate in California is $1,815—and that’s up 20% from two years ago. So why is California car insurance getting so expensive so fast?
Before we go into the reasons why, our CEO, Kyle Nakatsuji, has a message for you:
Here’s why auto insurance in California is getting more expensive:
1. More cars on the road.
California is the most populous state in the nation and has gained 3.1 million residents over the past 10 years. Also, gas prices are the lowest they’ve been in years, so there’s not much economic pressure to carpool, batch errands, or put off road trips.
All of this means more cars on California roads. And the more drivers there are on the road, the more accidents you’re going to see. It’s pretty simple math.
2. Auto repair bills are going up.
Modern cars are getting more expensive to fix. You’ve seen all of the electric and hybrid cars on the road, of course. But even regular cars are now made with advanced safety features that require pricey sensors. While this new safety technology makes cars safer to drive, it also makes those cars much more expensive to fix when something bad does happen.
Basically, this means that accidents are getting pricier. In 2017, prices for motor vehicle repairs were over 60% higher than they were in 2000. Since insurance companies are often the ones paying for vehicles repairs, they need to charge customers more in order to cover the increased cost.
3. More people are driving distracted.
Even if you aren’t using your phone or watching movies while driving, a lot of other drivers are. In 2016 alone, 3,450 Americans were killed in accidents which involved distracted driving. And, in California, the problem is getting worse: in 2018, the number of CA drivers using their cell phones behind the wheel increased.
More distracted driving makes California roads riskier (and more expensive) for everyone.
4. The cost of medical care is going up.
The price of healthcare is going up—in California and across the country. So, when drivers get into accidents, the cost for their hospital expenses is higher than it’s ever been. Since auto insurers usually pick up the tab for medical care after an accident, this means higher rates for everyone.
Yes, costs are increasing. But here’s our promise to you.
Insurance rates fluctuate all the time. It’s the nature of the business. But rest assured: Clearcover is a company run by people like you. And we know how discouraging it can be to see your rate go up when you’ve been a good driver.
So here’s our commitment to you, our customer: we will always give you the lowest rate we possibly can—while still being financially responsible.
We’ve built an efficient, tech-driven platform that is designed to keep our costs low so we can pass the savings along to customers. We’re in this for the long haul and we’ve set up our business to give you the best rates possible in any market conditions.
We also pledge to keep our customers in the loop. Whenever you have a question about your rate, shoot us an email, chat with us via the Clearcover app, or give us a call. We’re always happy to explain. You’re the reason we’re here.
Learn more about how insurance pricing works.
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