California Car Insurance Rates and How They Are Set

California is a prior approval state for car insurance. Under Proposition 103, the Insurance Commissioner must approve a property and casualty rate, including a personal auto rate, before an insurer can use it ¹. That can make California prices slower to move than in states where insurers can file a rate and start using it right away, in either direction: increases wait for approval, and so do decreases.

California also limits what an auto price can be built on. The California Department of Insurance (CDI) says auto rates are primarily determined by three mandatory factors, a driver's safety record, annual miles driven and years of driving experience, with additional optional factors allowed only when the Commissioner approves them ³. So when a California renewal changes, the reason is usually one of those factors, a change in the insurer's approved rate, or a change in coverage or discounts. Our guide to why car insurance goes up covers the personal reasons in detail.

Proposition 103 is written into the California Insurance Code at sections 1861.01 to 1861.16 ¹. CDI describes it as a law meant to protect consumers from arbitrary insurance rates and practices, covering personal auto, homeowners and other property and casualty lines, and says the Commissioner must approve a rate before its use ¹.

The California State Senate Committee on Insurance summarizes the main steps in its Proposition 103 fact sheet. Property and casualty rates must be approved by the Commissioner prior to use, the Commissioner makes each rate change request public, and when a request exceeds 7%, the Commissioner must hold a hearing if one is requested in time ⁵. When the measure took effect, it also required insurers to lower rates by 20% ⁵.

Proposition 103 also created a process for the public to take part in rate proceedings. People and groups who take part, called intervenors, may recover their costs and attorney's fees if they make a substantial contribution to a rate decision ¹. In August 2026, CDI said new rules on intervenor participation, documentation and compensation were in effect, along with regular public status updates in rate filing proceedings ⁴. CDI said in the same release that its rate filing review saved consumers $6.6 billion in premiums from 2019 through 2025 ⁴. That figure is CDI's own estimate, and the release does not break it out by line, so it is not an auto-only number.

CDI's Virtual Viewing Room lets the public see insurance company rate filings, examination reports and related information, including property and casualty rates and rating plans through an online database ². When a rate needs approval, the Commissioner may hold a Prior Approval Rate Hearing, run by CDI's Administrative Hearing Bureau, and the case files for those hearings are posted online ². Our explainer on what a rate filing is covers how to read one.

In March 2026, State Farm announced that CDI had approved a request by State Farm Mutual Automobile Insurance Company to reduce its personal auto insurance rates by 6.2%, effective May 8 for new business and renewals ^{6 7}. CollisionWeek reported that the approval followed a filing State Farm submitted in November, which had originally proposed a February 23 effective date ⁷. The percentage is an average across the company's existing California auto policyholders, and the trade report noted that individual changes vary by policy ⁷. We are not affiliated with the insurers named.

The other notable action in 2026 is about rating factors rather than a single company's rate. On September 16, 2026, Insurance Commissioner Ricardo Lara proposed a regulation that would stop insurers from using marital status when developing auto insurance rates. CDI says marital status has been an optional rating factor since 1996 ³. Under the proposal, insurers that use it would have to bring their rating plans into compliance through the Proposition 103 review process, and any resulting rate or class plan changes would remain subject to CDI review ³. CDI said the proposed regulation had been submitted to the Office of Administrative Law ³. CDI's release describes a proposed regulation, not a final rule, so check CDI for its current status.

An approved rate change is an average for an insurer's existing policyholders. Within it, individual changes vary by policy ⁷. A renewal can also change because of a new violation or at-fault accident on the driving record, more or fewer annual miles, a new vehicle, a driver added or removed, a coverage change or a discount that ended. Our page on whether car insurance rates are going down explains why averages and individual bills often move differently.

If a renewal notice does not make the reason clear, our guide to reading a renewal notice shows where the explanation usually sits. Asking the insurer or agent which factors changed is a reasonable first step, and comparing quotes from several insurers shows whether a price is in line with what others charge for the same driver and car.

CDI's Consumer Hotline is 1-800-927-4357, and the TTY line is 800-482-4833 ³. CDI's consumer help page lists the hotline for insurance information and questions, and offers an online complaint form for consumers, which CDI recommends using ⁸.

For a question about a specific claim, start with your insurer and then CDI; we do not give claims advice. QuotePitStop is a lead-generation service, not an insurance company, agent or broker.

• ¹ Official record: CDI's description of Proposition 103, prior approval of rates before use, the Insurance Code sections and intervenor cost recovery, checked October 11, 2026.
• ² Official record: CDI's Virtual Viewing Room, online rate filings and Prior Approval Rate Hearing case files, checked October 11, 2026.
• ³ Official record: CDI's September 16, 2026 release on the three mandatory rating factors, the marital status proposal and the Consumer Hotline and TTY numbers, checked October 11, 2026.
• ⁴ Official record: CDI's August 11, 2026 release on intervenor rules and its stated $6.6 billion in premium savings from 2019 through 2025, checked October 11, 2026.
• ⁵ Official record: the State Senate Committee on Insurance Proposition 103 fact sheet, prior approval, public requests, the 7% hearing threshold and the original 20% rollback, checked October 11, 2026.
• ⁶ Reported: State Farm's own announcement of CDI's approval of a 6.2% personal auto rate reduction effective May 8, checked October 11, 2026.
• ⁷ Reported: CollisionWeek's report naming State Farm Mutual Automobile Insurance Company, the November filing and that individual changes vary, checked October 11, 2026.
• ⁸ Official record: CDI's consumer help page, hotline and online complaint forms, checked October 11, 2026.