You probably know that auto insurance regulations and laws are determined by your state. Therefore, it is all different in each state across the USA. The differences may not be huge but may be big enough to make your costs higher or lower. Companies cannot sell policies less than the minimum determined by your state. And they cannot ignore the restrictions and claim payment requirements that are imposed on them.
There are many other factors that affect the rates along with the regulations. Some of them are related to personal details and circumstances and they are drivers’ age, gender, driving history, owner’s credit score, claim history, your zip code, occupation. The make, model and age of your automobile is an important detail as well. The safety and security features installed in each vehicle can make them low or high risk. Yearly mileage and congestion in the area you live are other determinants taken in to account.
If you are living in the west of the country you may need to pay higher premiums. California is one of those states that have higher average car insurance rates. It would be unfair to pin it down to only one reason. There are so many of them that we can have a look why you would end up paying more in this state.
Generally, people living in California have more expensive cars with bigger engines. BMW is one of the most popular cars in the Golden State. When you have expensive cars with big engines you will pay more due to increased risks associated with them. This part of the country is highly populated and roads are congested as well that increases accident risks. Also, it increases the likelihood of an accident being a big one.
The distances driven is quite wide as well. The state is big and people live far away from their work place that increases the driving. Weather may be a factor as well. California is a beautiful place with mild weather than encourages people to get on their cars and drive. They may be spending more time outdoors and they get there by driving private automobiles.
Only few years back this was a very serious problem for the authorities. They had one of the largest uninsured drivers figures in the nation. They had to deal with it and they used several methods in the process. One of them is to increase penalties for driving without the minimum required coverage. They helped reduce the numbers and this may in turn help to keep the costs for the other drivers low. Uninsured drivers cost money for insurance companies. They don’t pay any premium and they cannot pay for the damages they caused. So, companies will have to pay it for them as well.
Another solution found by authorities was to offer low cost car insurance to low income families. They set special coverage lower than the standard for this purpose so that the costs can be lower. Drivers can find these basic policies through state insurance department and providers participating within the scheme.