Why is Auto Insurance So Expensive in San Francisco?

Last Updated on September 18, 2020

San Francisco is one of the most expensive cities in the United States – but car insurance can seem particularly expensive for Bay Area drivers.

Several factors impact auto insurance premiums in the United States. In most states, dWhy is Auto Insurance So Expensive in San Francisco?rivers in big cities like San Francisco pay higher rates for car insurance than drivers in rural areas. Certain ZIP codes of San Francisco also have higher accident rates, crime rates, and other incident rates compared to other ZIP codes.

Why is auto insurance so expensive in San Francisco? How can you get cheap auto insurance in the United States? Today, we’re explaining everything you need to know about auto insurance in San Francisco and the cost of car insurance.

San Francisco Car Insurance is Expensive Compared to Other Cities

First, it’s not your imagination: drivers in San Francisco pay some of the highest rates in America for car insurance.

The average driver in San Francisco pays 10% to 20% higher premiums than the national average, or about $1,900 per year for full coverage car insurance. Many drivers in San Francisco pay $2,500 per year or more for car insurance. Across the United States, the average cost of car insurance is around $1,400 per year.

In some surveys, San Francisco is among the top 10 most expensive cities in America for car insurance, trailing notoriously expensive cities like Detroit, Philadelphia, Miami, Los Angeles, and New Orleans.

Car insurance companies aren’t discriminating against San Francisco specifically: we see a similar effect in virtually every state in America. In most states, drivers in big cities pay higher rates than drivers in smaller cities and rural areas. In California, a driver in San Francisco tends to pay higher insurance premiums than, say, a driver in Redding.

Why is San Francisco Car Insurance More Expensive?

Several factors impact the price of car insurance in San Francisco.

Some San Francisco ZIP codes have higher crime rates or accident rates than other ZIP codes. Some ZIP codes are more densely populated, which means more traffic and a higher risk of making a claim.

Of course, the cost of living in San Francisco is higher than the national average in the United States. That means it costs more to hire a mechanic or pay for auto body repairs in San Francisco. Insurers pass these costs onto consumers in the form of higher premiums.

San Francisco Drivers Pay Less for Car Insurance than Other California Cities

Car insurance can seem expensive in San Francisco – but most Bay Area drivers pay cheaper rates than drivers in other parts of the state.

It’s important to note that San Francisco drivers pay less than drivers in Los Angeles for car insurance. Car insurance in Los Angeles is among the most expensive in the United States, with drivers paying 20% to 40% higher premiums than the national average. Los Angeles tends to have higher crime rates and accident rates (and a higher population) than San Francisco and the Bay Area, which means higher insurance premiums.

In fact, San Francisco drivers pay less for car insurance than drivers in nearby Sacramento. Sacramento has notoriously high car insurance premiums for various reasons.

San Diego also has expensive car insurance premiums. Although San Diego car insurance is slightly cheaper, on average, than San Francisco car insurance, both cities have relatively expensive premiums compared to the rest of the United States.

It’s okay to complain about car insurance premiums in San Francisco – but premiums are often less than what you would pay in other California cities.

Factors that Impact Car Insurance Premiums in San Francisco

California has unique insurance laws compared to most other states. In fact, California is one of three states (along with Hawaii and Massachusetts) that prevents drivers from using credit scores and other factors to calculate premiums. For that reason, accident history plays a larger role in San Francisco insurance premiums than in other cities.

Factors that impact car insurance in San Francisco include:

Population Density: San Francisco is a densely-populated city. Some ZIP codes are particularly densely populated. Insurers check your ZIP code before assigning premiums. If you live in a densely-populated ZIP code, then you’re statistically more likely to get into an accident or make a claim than a driver living in a more sparsely-populated ZIP code.

Crime Rate: Similarly, some San Francisco ZIP codes are associated with higher crime rates than others. Your vehicle may be more likely to be stolen in certain neighborhoods than others, for example, and insurers pass these costs onto policyholders.

Driving History: If you have a clean driving record, you’ll pay less for car insurance than someone with multiple at-fault accidents and DUIs.

Coverage: California has relatively low car insurance coverage requirements compared to other states. Some drivers meet these coverage requirements, while others exceed them. Depending on your coverage options, you could pay more or less for car insurance.

Accident Rates: Bay Area drivers frequently complain about traffic. More traffic density means more accidents, and insurers pass these costs onto consumers in the form of higher premiums.

How to Get Cheap Car Insurance Premiums in San Francisco

Just because you live in San Francisco doesn’t mean you have to pay expensive car insurance premiums. By taking advantage of discounts and offers, you can get cheap car insurance premiums in San Francisco and other Bay Area cities.

Here are some tips for getting cheap car insurance in San Francisco:

Compare Quotes: The best way to get the cheapest car insurance premiums in San Francisco is to compare quotes. Enter your ZIP code online and get a free estimate from the best car insurance companies in San Francisco. Pick the cheapest provider or best coverage.

Take Advantage of Discounts: San Francisco car insurance companies offer all of the same discounts as insurance companies in other parts of the country, including bundling discounts, good student discounts, safe driving discounts, and more.

Adjust Coverage: Drop collision and comprehensive coverage on an older vehicle to lower car insurance premiums. Or, lower liability limits if you want to save money.

Raise your Deductible: A standard car insurance deductible is $500 to $1,000. Some drivers raise the deductible to save money on monthly premiums.

What’s the Best and Cheapest Car Insurance Company in San Francisco?

Certain car insurance companies in San Francisco tend to offer cheaper rates than competing providers.

If you’re looking for the best cheap car insurance in San Francisco, consider requesting a quote from any of the following companies:

Final Word on San Francisco Auto Insurance Rates

Many drivers in San Francisco pay over $2,500 per year for car insurance, significantly higher than the national average of around $1,400.

Fortunately, by taking advantage of discounts and comparing quotes today, drivers in San Francisco can pay the lowest possible rates for car insurance anywhere in San Francisco and surrounding Bay Area cities.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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