How to Lower Your Car Insurance Costs: Available Discounts and Smart Tips

The cost of car insurance depends on several key factors: the type of coverage, insurance experience, car age, method of registration, etc. You can save up to 50% on a policy without losing quality if you:

• Compare several offers.
• Use the bonus-malus system.
• Choose partial hull insurance or a higher deductible.
• Take advantage of discounts for families, civil servants, and pensioners.
• Take out insurance online.

In this blog, we will provide detailed tips, figures, case studies, and FAQs with the most frequently asked questions about car insurance.

How does insurance work in California, and what affects its price?

In California, auto insurance is regulated by the California Department of Insurance (CDI). The minimum insurance requirements are:

• $15,000 for bodily injury to one person;
• $30,000 total for bodily injury to multiple persons;
• $5,000 for property damage.

However, most drivers choose coverage above the minimum to feel more confident on the road, as situations can be very different. And here the question arises: how to avoid overpaying?

Here are the main factors that affect the price of the policy:

• Place of residence (insurance in Los Angeles is often more expensive than in Sacramento);
• Driver's experience and age (younger drivers pay more);
• Car (cost, type, year of manufacture);
• Insurance history (DUI, accidents, number of claims);
• Mileage and frequency of car use;
• Selected coverages and deductibles.

Details on the insurance price can be found here: CDI Official Site.

1. Compare quotes from different insurers

There are more than 100 car insurance companies in California. And their prices for the same conditions can differ by up to 40%. To compare prices, use services like:

• Compare.com
• The Zebra
• Gabi

Tip: Don't focus on price alone. Despite the fact that this point is the most interesting for users, pay attention to:

• the insurer's reputation (A.M. Best rating, complaints);
• payment terms;
• ease of application and support.

An even better option would be to consult an independent insurance agent. They can see private rates that are not available online and advise you on the best combinations of discounts.

2. Choose your deductible wisely

A deductible is the amount you pay yourself in the event of an accident before the insurance kicks in. For example:

• If your deductible is $1,000 and you get into an accident with $4,000 in damages, the insurance will only cover $3,000.

The higher the deductible, the lower the monthly cost of insurance. This is a good option for experienced drivers without frequent accidents. Typical deductibles are $500, $1,000, or $2,000.

Before raising your deductible, make sure you have a financial cushion in case of an accident. If you have to pay $2,000 at once, it shouldn't come as a shock to your budget.

3. Accident-free history = discounts

If you have not had an accident for 3-5 years, most companies offer discounts of up to 20%. This is called a Good Driver Discount. In California, it is regulated by Prop 103, which requires that driving history be taken into account when pricing.

In addition to the direct absence of accidents, additional discounts also apply:

• Multi-policy (car + home insurance);
• Loyalty Discount (long-term customers);
• Safe Vehicle Discount (cars with anti-lock brakes, airbags, GPS tracker).

We recommend that you ask your insurance company about available discounts once a year. Often, they are not automatically activated, and you can lose hundreds of dollars unnecessarily.

4. Use "Pay-as-you-drive" or "Usage-Based Insurance"

Many insurers (e.g., Progressive Snapshot, Allstate Drivewise, State Farm Drive Safe & Save) offer rates based on driving style. If you:

• Don't brake hard,
• Don't drive at night,
• have low annual mileage (<8,000 miles),

– You can save up to 30%.

The system works through a mobile application or OBD-II tracker. Your driving style is evaluated by points. The system awards you points for good, safe driving performance and deducts them for violations or dangerous driving style. The more points the system gives you, the higher your insurance discount will be.

Some programs even show your rating in the app and give you tips on how to improve your driving style for additional bonuses. This is both a financial motivation and a safe habit for the future.

5. Online registration = less costs

Many insurance companies offer a discount of up to 10% if you apply for a policy online. This is beneficial both for the company (less expenses for staff, office rent, utilities) and for the client:

• no queues or meetings;
• registration in 15 minutes;
• convenient payment and storage of documentation.

Some services automatically send the policy to the DMV for vehicle registration renewal, which is especially useful when registering a car or renewing car registration online, as physical visits to the department take a lot of time.

Also, some insurance companies have referral programs: you can get gift cards or discounts for inviting your friends.

6. Check for seasonal promotions

During periods like:

• The beginning of the year;
• Thanksgiving, Black Friday;
• Сar change season (spring/fall)

– Insurance companies often launch temporary promotions. These may include discounted promotional codes, free additional services (e.g. tow truck, technical support), and discounts for new customers.

Sign up for newsletters from your favorite insurance companies and follow their social media pages, so you will always be aware of all current events, discounts, and offers.

7. Update your data on time

Have you moved to a less accident-prone area? Replaced your car with a new one with security systems? Added an experienced driver to the policy? These changes are very important and cannot be dismissed as trivial.

If you have purchased a new car, don't forget to perform a California title transfer. The procedure can be easily completed – a car title transfer online will take a few minutes. 

After obtaining insurance and renewing your registration, don't forget to update other documents as well: renew California license plates, order a replacement California registration card. In case of a lost CA registration or the need for a duplicate California title, all this is easily done through the DMV.

Regularly updating your information allows you to avoid overpayments and get the best deal. For example, reducing the mileage from 12,000 to 7,000 miles per year often reduces the cost of insurance by 5-15%.

It is also worth checking whether:

• The type of car use (personal/business).
• The number of drivers in the policy.
• The need for additional coverage has not changed.

And the last but not least factor is to check your credit history. Yes, it can also affect insurance. 

8. Think about whether you really need full hull insurance

When it comes to car insurance, hull insurance is the first thought in the minds of almost every citizen. However, you should not rush. If your car:

• is more than 10 years old,
• has a market value < $5,000,
• is not for loan or lease,

– it is likely that only liability coverage is enough for you. In this case, full coverage (CASCO) can cost twice as much as the benefit of a potential payment.

If you use a car for business, you should get a commercial vehicle registration CA or even apply for a fleet vehicle registration in California. For interstate use, the IRP apportioned plates California system are suitable, which allows you to optimize taxes and administrative costs.

9. Use insurance calculators

It is very convenient to use insurance calculators; it is the best option for comparing all possible options and choosing the best insurance. However, not all calculators are equally useful. Choose the ones that allow you to model different scenarios, for example:

• deductible change;
• mileage variation;
• adding/removing coverage.

Resources such as NerdWallet, ValuePenguin, and Insurify provide real estimates based on ZIP code. This way, you will get complete information in case of emergencies.

This is especially useful when you are planning to buy a car or change your place of residence.

10. Use group programs

If you work for a large company or are a member of a trade union, trade organization, or a graduate of a certain university, check if you are eligible for group discounts.

For example:

• Employees of Google, Amazon, and Apple often have corporate programs.
• Members of AARP, AAA, and Alumni Associations receive special rates.

Belonging to a certain group or having a profession can reduce the fee by 5-25%. This is a significant discount, and it's worth taking advantage of.

11. Review your policy every year

Even if you are satisfied with your current insurance, don't be lazy and do a “review” every year. The market changes, new players and promotions appear, and new insurance may be even more profitable than the previous one.

A rough plan of action:

1. Gather three new quotes.
2. Check for changes in driving style/car/income.
3. Compare with your current policy.
4. Talk to your agent: often a discount is given simply for initiative.

It is quite possible to save money on car insurance in California, and the amount of savings may surprise you. There is no “one magic discount”, but a combination of factors and attention to detail can reduce the cost of a policy by a significant 20-50%.

SEE FAQ: Frequently asked questions

1. Are there any assistance programs for low-income drivers in California? Yes, there is a California Low Cost Auto Insurance Program (CLCA). You can learn more at MyLowCostAuto.com.

2. What is the average cost of car insurance in California? As of 2024, it is $2,291 per year for full coverage. Source: bankrate.com.

3. Can I change insurers before the policy expires? Yes, you can cancel the policy at any time and receive a pro rata refund of the premium. Having insurance does not tie you to an insurer.

4. Can I save money if I insure several cars at once? Yes, Multi-Car Discount can give you up to 25% discount.

5. Do I need to have a car in my own name for insurance? It is not necessary. But the insurance company needs to know who the main driver is.

6. What is SR-22 and when is it needed? This is a form that the insurance company submits to the DMV as proof of auto insurance for drivers with violations (DUI, accidents without insurance).

7. Will the price change if I work as a delivery or taxi driver? Yes. You will need commercial coverage, which is more expensive.

8. Can I save money by choosing less coverage? Yes, but it is risky. The minimum limits may not cover all losses in a serious accident.

9. How can I check the rating of an insurance company? Use the resources:  AM Best, NAIC, JD Power.

10. Does car mileage affect insurance? Yes, it does. The fewer miles you drive per year, the lower the premium. If you drive less than 5,000 miles/year, let your insurer know and they will review your policy.

Conclusion

Car insurance in California can be expensive, but if you are careful and take advantage of all the available benefits, you can:

• Save up to 40% by comparing prices and offers.
• Get discounts of up to 30% by using UBI.
• And up to 20% for driving without an accident in recent years;
• Reduce costs by 10-20% by choosing a higher deductible;
• Save up to 15% simply by using an online platform.

There are no one-time discounts from the ceiling for car insurance, but everything is in your hands. Put together your professional status, driving style, car history, season it with a thoughtful approach and analysis of available offers that are not noticeable at first glance, and the amount of the discount will pleasantly surprise you.

The main thing is not to be passive. Check, compare, update. Profitable insurance is about both savings and confidence on the road.

Safe roads and fewer numbers in your bills!