If you live in California, did you know that you could get a 20% discount on your car insurance just by being a good driver? A lot of auto insurance companies promote the discount as a special benefit that only they offer, but it’s not a unique feature.
The California good driver discount is supposed to be offered to anyone who qualifies, regardless of which auto insurance company you go through. This handy program saves people a ton of money on their car insurance and it was born from a time when car insurance wasn’t so cheap.
Do I qualify for California good driver discount?
To qualify for the discount, you’ll need to meet these four criteria each time you apply for car insurance, or when your current car insurance renews. You must:
Have been licensed to drive for at least the past three years
This means the soonest you’d be able to qualify for the California good driver discount is when you reach age 19.
Have had no more than one violation point in the past three years
In California, one-point violations include things like speeding, passing on a double line, failing to obey traffic signs (like a stop sign or a stoplight), or failing to yield the right-of-way to a pedestrian.
Not be at fault for an accident causing death or injury in the past three years
If you’ve been in an accident and hurt or killed someone, you won’t be eligible for the California good driver discount for at least another three years from the closing date of the claim.
Have had no convictions for a DUI within the past seven years
Similarly, if you’ve been convicted of a DUI, it’ll be much longer — seven years, at least — until you’re potentially eligible for the California good driver discount again.
California’s early problems with expensive auto insurance
The California good driver discount, established by Prop 103, was a direct response to a time when car insurance rates were skyrocketing.
Say what you will about regulation and red tape, but sometimes it does have its place. Case in point: before the 1980s, California had some of the fewest auto insurance regulations of any state in the nation.
It was great for auto insurance companies because they could charge whatever they wanted, and charge away they did. By the time the 1980s rolled around, auto insurance premiums were rising three times faster than the average rate of inflation.
Car insurance became so expensive that over a quarter of all drivers on the road simply went without car insurance.
Car insurance became so expensive that over a quarter of all drivers on the road simply went without car insurance (today, for comparison, around 15% of California drivers are uninsured). This glut of uninsured drivers drove up costs even more for those drivers who were insured.
Proposition 103 establishes the California good driver discount
By 1988, Californians were fed up. In November of that year, voters passed Proposition 103, a bill to reform how the insurance industry charges its customers. Overnight, California went from being one of the least-regulated to one of the most-regulated states for car insurance.
Prop 103 introduced several changes. Right off the bat, it declared that all insurers had to cut auto insurance rates by 20%. It also formed an insurance commission, and if any insurance companies wanted to raise their rates, they first had to make a case for it and get it approved by the insurance commissioner.
Another big change was that the bill established the California good driver discount to reward responsible drivers with 20% off their insurance premiums.
The result: California’s car insurance rates begin to decrease.
According to a recent report, car insurance premiums in California have undergone a slow, steady decrease since the passage of Prop 103. In 1989, for example, the average car insurance premium was $519.39. By 2004, average car insurance premiums shrunk down to $483.44 — a decline of about 7%.
$483.44 still isn’t cheap but consider what could have happened. Over that same period of time — 1989 to 2004 — car insurance premiums nationwide increased by a whopping 47%.
With that perspective, California’s car insurance premiums start to look a lot more reasonable. In fact, the state went from being the 3rd most expensive state in the nation for car insurance, to the 18th. It’s still not cheap, but it’s much more affordable than where it could have reached, thanks in part to Prop 103.
Make sure you take advantage of the California good driver discount
With Clearcover, the California good driver discount is built in and automatically applied if you qualify. We want to make it as simple as possible for you to get the best rate possible.
Not all car insurance companies do this, however. In fact, Prop 103’s wording simply requires car insurance companies to offer a discount, not that it be automatically applied. If you meet the requirements listed above for the California good driver discount, it’s well worth your time to call your car insurance company and confirm that you’re getting the discount.
After all, you work hard to drive safely, and you should pay the rate you deserve in return.