Three Required Factors, Fifteen Optional Ones, Nothing Else
Many explanations of car insurance pricing are long lists of things that "may" matter. California's list is short and closed. Insurance Code section 1861.02 names three factors and allows others only if the Insurance Commissioner adopts them by regulation, and it calls the use of any criterion without approval unfair discrimination. Here is the whole list in one place.
The three that come first
- Driving safety record: your convictions and principally-at-fault accidents, read from your DMV record and comparable out-of-state records.
- Annual miles driven: the estimated miles for the twelve months after the policy begins.
- Years of driving experience: years licensed to drive in any jurisdiction, or, on a motorcycle policy, years licensed to ride.
The regulation requires these three for bodily injury and property damage liability, medical payments, uninsured motorist, collision and comprehensive, in that order of importance.
The fifteen optional factors
A company may use any, all or none of these, as set out in its approved class plan. The Department of Insurance's class plan instructions say no optional factor's weight may exceed the weight of years of driving experience.
| Optional factor | What it covers | What you can do |
|---|---|---|
| Type of vehicle | The kind of vehicle being insured. | Price a car before you buy it. |
| Vehicle performance capabilities | What the vehicle is capable of. | Choose the vehicle; it rates as built. |
| Type of use | Pleasure, commute, business or farm use. | Keep the use current; see use classes. |
| Percentage use by the rated driver | How much of a car's use belongs to the driver rated on it. | Describe shared use honestly. |
| Multi-vehicle households | Several vehicles insured together. | Ask whether the plan uses it. |
| Academic standing | A student's grades. | Send proof when asked. |
| Driver training or defensive driving | Completed courses. | Ask which courses the company recognises. |
| Vehicle characteristics | Engine size, safety devices, damageability, repairability, theft deterrents. | Make sure equipment is recorded. |
| Marital status of the rated driver | Whether the rated driver is married. | Report changes; see marital status. |
| Persistency | Time with the company or an affiliate, never a non-affiliated insurer. | Weigh it when switching. |
| Non-smoker | Whether the driver smokes, as the plan defines it. | Ask whether the plan uses it. |
| Secondary driver characteristics | Listed drivers with no assigned car. | See extra drivers. |
| Multiple policies | Other policies with the same or an affiliated company. | Price the bundle against separate policies. |
| Relative claims frequency | Claims frequency where the car is garaged, in up to 20 bands. | Keep the garaging address true; see garaging. |
| Relative claims severity | Claims severity where the car is garaged, in up to 20 bands. | Report a move promptly. |
What isn't on the list
Because the list is closed, its gaps are rules too. Credit score does not appear. Gender does not appear. Occupation and education level do not appear, although group plans organised around an occupation are allowed with their own approved rates. Whether the car sleeps in a garage or on the street does not appear; "garaged" in the location factors means where. And Insurance Code section 1861.02(c) says the absence of prior insurance, in and of itself, may not be a criterion for rates.
| What the law allows | Three mandatory factors in a fixed order, plus only the fifteen optional factors in 10 CCR 2632.5, each weighted below years of driving experience. |
|---|---|
| What you can change | Mostly accuracy: mileage, use, garaging address, drivers and their assignments, and the documents that prove credits. |
| What you can't | Which optional factors a company chooses to use, and how its approved plan weighs them. |
How to use the list
When a price surprises you, ask the company which factor produced it. The answer should be one of the eighteen above. If it is, check that the fact behind it is right. If it isn't on the list, ask how it fits into the approved plan, because only listed factors may be used in a class plan. Then compare quotes, since each company weighs the same eighteen differently.
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How many rating factors can a California auto insurer use?
Three mandatory factors plus up to fifteen optional factors listed in 10 CCR 2632.5. A company chooses which optional factors to include in its approved plan.
Is age a rating factor in California?
Age is not on the list. Years of driving experience is a mandatory factor, which is why a newly licensed adult is rated on experience rather than birthday.
Can an insurer use my credit score in California?
Credit score is not on California's list of allowed rating factors.
Can the list change?
Optional factors are adopted by the Insurance Commissioner by regulation, so a change would come through that process, not from one company.