Last updated March 27, 2018.
Los Angeles drivers spend some brake-slamming 81 hours in traffic each year. And according to the U.S. Department of Transportation, the 405 Freeway is the nation’s most heavily traveled interstate with close to 400,000 vehicles hitting the pavement each day. These facts equal one thing: expensive car insurance.
In fact, L.A. ranks fourth on USA Today’s Top 25 list of American cities with the most costly car insurance. The highest average annual cost of auto insurance in Los Angeles is $2,416, compared to a mere $864 in Maine, which enjoys the nation’s cheapest car insurance. As a state, California comes in seventh in car insurance premiums nationwide with monthly payments often topping $200.
This number-crunching may sound like bad news if you live and drive in L.A. But does car insurance in Los Angeles have to be so expensive? Are there cheaper alternatives? And what are the factors that determine how much you pay in premiums?
Fasten your seatbelt, and let’s take a look.
Factors that Affect Your Los Angeles Car Insurance Rates
State Farm identifies 7 factors that may affect how much you pay each month in auto insurance. While one of the factors, like age, is beyond your control, there may be others that you can adjust to work for your benefit. Here, we’ll look at the ones that you may be able to maneuver in your favor.
How Many Miles You Drive Each Year
When you apply for car insurance, agents will ask you to estimate how many miles you drive your vehicle annually. Average and lower mileage counts (12,000 or below) may snag you a lower insurance premium than someone who packs 15K miles onto their vehicle each year. According to Quadrant Information Services, you could save as much as 9% on your annual policy if you drive less. The logic is simple: the fewer miles you drive, the less chance there is for collision, and the less likelihood there is for the insurance company to shell out money on your behalf.
But what if you have a long commute to work? Your long commute could be shorter and your insurance cheaper if you make a strategic move, which brings us to the next factor.
Where You Live
With more than 10 million residents and growing, Los Angeles County is the largest metro area in California. Because of the city’s population density and the subsequent potential for collisions, insurance companies view drivers as high risk. If you live in a less populated area of Los Angeles County, like Irwindale or Avalon (which both have populations under 5,000) then you may pay less than someone who lives in the heart of downtown.
If moving is an option, then you might think about renting an apartment or buying a house closer to where you work. If you work AND live in a less populated area, your insurance savings could multiply.
What You Drive
Before you trade in that 1999 clunker for a sleek new ride, consider this: older vehicles have lower insurance rates than new ones. Furthermore, flashy cars, like that cherry-red Ferrari you’ve always dreamed of, are considered safety hazards and will make your insurance rates skyrocket. Expensive vehicles are also statistically more likely to be stolen — yet another reason why it might pay to hold onto that jalopy you drove way back when.
Your Driving Record
This one is straightforward: drivers with piles of speeding tickets and other infractions are going to pay more than those who have never been pulled over. Just one ticket may lead to a 22% spike in your auto insurance rate. Likewise, if you’ve been in an accident, even a minor fender bender, you could see your insurance premiums rise. So, slow down on those sunlit roads, which shouldn’t be too hard to do in the city with the worst traffic in the world.
Your Credit History
While it may seem unfair, your credit history does play a role in determining how much you pay for car insurance. Drivers with a bankruptcy in their history will probably pay more, but your credit score is not beyond repair. As you work toward paying your bills on time and rebuilding your credit, you may see a nosedive in your car insurance rates. Consequently, if you have a high debt to income ratio and haven’t been paying your bills, bankruptcy may help start the credit rebuilding process.
Depending on your insurance company, you may be eligible for a variety of discounts, like multi-vehicle or safe driver. You can also opt to pay a higher deductible per accident, say $1,500 instead of $500, to decrease your insurance payments. In California, this strategy may save you up to 11% annually.
Finding Cheap Car Insurance in Los Angeles
Now that you know a few tricks you can use to lower your car insurance, let’s look at the avenues where you can find the best deal in Los Angeles. Your best bet is to shop around online and obtain free, no-commitment quotes from various insurers. Smaller local companies may offer lower rates than national corporate giants, but this is highly individual.
Getting your financial profile on track, reducing your annual mileage, and maintaining an older vehicle are a few ways to lock in lower rates. You can also sign up for a defensive-driving course, many of which may be taken online at your convenience, and watch your insurance rates drop. But the most important strategy of all is also the one that will help the other 400,000 drivers on the road in L.A.: driving safely and saving something far more important than money.