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Car Insurance Laws and California Teens

In California, it is illegal to drive without car insurance. All licensed drivers must have at least $15,000 of bodily injury insurance per person, at least $30,000 of bodily injury insurance per accident and at least $5,000 of property damage insurance. This is known as the 15/30/5 rule.

Keep in mind that insurance follows the car, not the driver. If a friend is driving your car and they cause an accident, you will need to pay your deductible and your insurance rates may likely go up.

When to Get Insurance

When it comes to car insurance, California teens catch a bit of a break. You'll be covered by your parents' or instructor's insurance while practicing with your permit, so you won't need insurance of your own until you get your license. Ultimately, this can save you a good chunk of money as insurance premiums tend to be highest for teens.

With that said, you should begin examining your insurance options when you have your permit so that you'll be ready to go once you get your license.

Choosing a Policy

When it comes to selecting a car insurance option that works for you, begin by contacting your parents' insurance agent to find out how much it would cost to be added to their policy. This is often the most cost-effective option, especially if you'll be getting your own car. Many insurers offer multi-car discounts.

You can also purchase your own policy, but this can be quite pricey. Be sure to shop around for the best option.

Saving Money on Car Insurance

Teen drivers are more likely to be in an accident than any other age group. As a result, insurance companies pay out lots of claims on incidents involving young drivers. This is why teen car insurance rates are so high.

There are things California teens can do, however, to help lower their car insurance rates.

  • Practicing safe driving is the best way to lower your premium. Tickets and accidents can drive up your rates. Plus, many insurers offer safe driving discounts. For example, Farmer's offers a reduced rate to drivers who have been licensed for at least three years and who have accumulated fewer than two points on their license in the last three years. Though you may not be able to benefit from these discounts right away, they will make a difference in the long run! Unfortunately programs like Progressive Snapshot or Allstate's Drivewise, which can lead to more immediate savings, are unavailable in California at this point.
  • If you're in school, check to see if your insurer offers a good student discount. Many insurance providers, like Nationwide and State Farm, offer a discount to drivers under 25 who maintain at least a B average.
  • The type of car you drive can affect your insurance premiums. Older cars tend to have less value, making them more affordable for insurance companies to repair or replace should a claim be filed. This can result in lower premiums. In contrast, some enhanced safety features in newer cars, like anti-lock brakes and air bags, can also reduce your premiums. Your insurance agent can provide additional information.