Can California Drivers Get Auto Insurance with Bad Credit?

credit score scale showing poor credit

Yes, they can. Even though residents of the Golden State have their challenges with sky-high housing costs, congested roads, and other obstacles, one problem they don’t have is getting car insurance if they have credit problems. 

That’s rarer than you might think. In all but a handful of states, a bad credit score can leave drivers paying more for auto insurance even if they have no claims history or traffic violations. In California, a driver’s credit rating can’t be used to set rates. 

Why Does Poor Credit Pose a Problem Getting Car Insurance in Most Other States? 

Underwriters for car insurance companies operating in most other states make assumptions about drivers with poor credit. They assume that those who have money problems might be irresponsible when behind the wheel of their cars – or when it comes time to pay their insurance premium. To these insurance companies, such drivers might drive too fast and recklessly, get more moving violations, and be likely to get into accidents and make more coverage claims. 

But in California, it is against the law for insurance companies to factor in a driver’s credit history when quoting his or her premium. More states are taking a hard look at this law. 

So What Factors Do Determine What Drivers Pay for Auto Insurance in California? 

While drivers in this state don’t have to worry about their credit score raising the cost of their auto insurance, there are plenty of other factors that do boost the cost of their car insurance premiums. 

There are a few of these factors that you can do little or nothing about. The good news is that you can control several of the others and thereby earn lower rates on your auto insurance.

1. Age and Gender 

When you look at the statistics, younger drivers — especially males — drive faster, more recklessly, and with more moving violations and collisions than those of any other demographic profile. That’s why boys and young men between the ages of about 16 and 25 pay the highest rates for their auto insurance coverage. 

It’s unfair when you consider that a teen who gets his first driver’s license hasn’t done anything wrong. He’s being penalized simply because others in his age group and gender have exhibited unsafe driving practices before him. Girls and young women in the same age group don’t typically pay as much as their boy/men counterparts, but it is close. 

The upside is that there are better times ahead. Young drivers will age out of those high rates after they turn 25 as long as they don’t have significant traffic violations on their records, which gets us to our next point.

2. Driving Record 

Once again, your driving record can hurt or help you when it comes to what you pay for your car insurance. Drivers get negative points on their records for moving violations and at-fault car accidents. A certain number of points over a specified time period can result in license suspension. 

Excessive points will also result in insurers charging more for coverage. At some point, reckless drivers will be declared high risk and have to pay high rates to continue to drive legally. 

Fortunately, these negative points eventually drop from drivers’ records if no new violations are added. That means that motorists who are paying outrageously high rates now can see the cost drop over time if they slow down and drive more carefully. 

3. DUI Convictions 

Perhaps the costliest driving offense of all is to get a driving under the influence conviction. This activity can result in high fines, license suspensions, and even jail time in some circumstances. That’s not even the worst of it. Drivers with DUIs will also probably lose their auto insurance, be forced to file an SR-22 and buy high-risk coverage that costs much more than the standard coverage. 

As with young drivers, those with DUIs can see those high insurance rates drop over time if there are no additional convictions and they drive without accumulating additional negative points on their driving records. 

4. Miles Driven 

In at least one way, auto insurance works like actual physical products for sale. That’s because the more auto insurance you “consume,” the more it will cost — and vice versa, those who consume less of it pay less. 

So motorists who put on significant mileage over the course of a year will pay more for their auto insurance. If you commute for a couple of hours every weekday to and from work, your premiums will be higher than if you put just 5,000 or 7,000 miles a year on your car. 

The exact annual mileage that boosts or reduces rates will vary from one insurance company to another. If you can keep your annual mileage low, be sure to mention this to your independent insurance agent. Your agent will then shop for coverage that can reward you for your low mileage. 

dashboard of car showing mileage

5. Your Deductible 

The deductible is how much you agree to pay out of pocket before your insurance policy accepts responsibility for the rest of the cost of your claim. So, if a tree falls on your car in a storm and causes $2,000 in damage and you have a $500 deductible, your insurer will pay for $1,500 in claims and you’ll be expected to pay your $500 deductible. 

To reduce what you pay in annual premiums for your coverage, consider increasing the amount of your deductible. You’re taking a bit of a chance here in that you’ll pay more out of pocket if you do have a covered claim, but you’ll pay less in premiums. 

It can be a smart move to increase your car insurance deductible, but make sure you can afford to do so. After all, if you have a $1,500 deductible but you don’t have $1,500, you could be left without working transportation if you get into an accident. 

Your insurance agent will be able to explain other steps you can take to get the most affordable auto insurance rates possible. 

Contact Cost-U-Less Insurance Today 

Your independent insurance agent at Cost-U-Less Insurance can help you shop for affordable auto insurance options from several major carriers. Call us at (800)-390-4071 to talk with an agent, or get a quick quote online. You can also check out our locations to find a Cost-U-Less office and agent near you.