High Auto Insurance Rates in California

High insurance rates are a major put-off for a lot of drivers. Statistics show that a majority of the uninsured motorists on American roads cannot afford the standard liability policy and/or think that nothing bad is going to happen to them. While insurance in California isn't the most expensive in the country, you will have to reach deep into your pocket if you are buying a car insurance policy here. Let us analyze the reasons why prices are consistently higher than in most other states.

Congested state

Large metropolitan areas have a huge density of inhabitants. Large cities equal tons of traffic, and tons of traffic equals lots of accidents. The closer you are to a large city, the more a car insurance policy will cost (and, as a matter of fact, so will other living expenses). If you are on a shoestring budget, you may want to consider moving to the suburbs and commuting every morning rather than living close to your work place and spending small fortunes on rent and insurance.

Economically developed state

California is currently one of the major economies of the world if we were to compare U.S. states with other countries. Statistics put Californian economy on the 8th place in the world. Despite the recession, last year's gross state product was of $1.9 trillion, higher than 2009's figures, and amounted to a whopping 13% of the country's gross domestic product. Major industrial players are concentrated in the Californian area and salaries are higher than in the rest of the country. Californians earned a median of $42,578 in 2010, while the U.S. average was of $39,945. Since this is where the money is, everything costs more in California, from food to apartments, and such is the case with insurance policies too.

Pay as you go – not yet implemented

The state of California is currently considering the implementation of a 'pay as you go' insurance system where drivers would only be billed for the actual miles they drive. Car owners would then be allowed to choose a plan that tailors their driving needs instead of paying a generic fee whether or not they use their car. The strategy has been approved by the state but is yet to be implemented.

Such a system would not only reduce a lot of drivers' insurance related expenses, but will also make some people drive less. When knowing that they are being billed by the mile, a lot of car owners would choose alternative means of transportation which should, in time, relieve some of the crowded traffic.

A Californian male driver in his forties with a close to perfect driving record and an average car may pay as much as $2,000 a year for car insurance. This doesn't mean, however, that this rate will apply to you – pricing models depend on your driving record, your age, the car you are driving, your credit scoring and many more. This site will provide you with many hints on how you can get cheaper car insurance.