Car insurance prices rise in California

If your car insurance rates have increased this summer, you're not alone.

My own premium went up by nearly $100 last month. I found out why prices are skyrocketing and the impact it's having on Central Coast residents.

“Everything is going up,” said Kelly Skinner, a Nipimo resident.

It seems like the cost of everything is rising these days.

“Even when shopping,” said Skinner. Eggs [are] goes up.”

“Everything,” said Central Coast resident Stacy Hand. “Groceries. Everything.”

But here in California, a significant increase has shocked many people: car insurance.

“The increase was shocking,” said Vicky Phillips, an Arroyo Grande resident.

Last month, I received my bill and noticed an increase of almost $100. Curious, I contacted my insurance agent to find out the reason.

My agent explained, “Insurance premiums in California have increased significantly.”

Others are also feeling the effects of the crisis.

“I was paying $900 a year,” Skinner said. “Yeah, and then it went up to $1,300.”

So why are premiums rising? Researchers at insurance marketplace website Insurify have studied the higher rates, pointing to several factors, including car thefts – in which California led the nation last year.

But there's another layer to it. According to Insurify, California's strict insurance regulations, which are supposed to protect consumers, may actually be contributing to the price increases.

For many Central Coast residents, especially those on fixed incomes, this is a major problem.

“The thing is, you have to make sacrifices,” said Rick Phillips, an Arroyo Grande resident.

But this latest increase might not be the last. According to a new study from Insurify, they predict a 22% increase in car insurance costs, following a 15% increase in the first half of 2024. Then, by the end of the year, there will likely be an increase of more than 50%.

“Everyone complains about it,” Skinner said. “But there's nothing we can do about it.”

Researchers warn that if more insurance companies leave the state, the California Department of Insurance may be forced to approve further premium increases just to keep insurers in the Golden State.

This month, there were over 27 million licensed drivers in California.

Yet the Insurance Research Council estimates that 17% of them do not have car insurance, 25% more than the national average.