Auto Insurance Requirements in California

Auto Insurance Requirements in California

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In California, all drivers must have some form of financial responsibility before hitting the road. While car insurance is the easiest way to meet this requirement, you can instead choose an alternative form of coverage. Either way, the coverage financially protects you and other people following a car accident.

You'll also need to carry proof of financial responsibility — such as an insurance ID card — every time you drive. If you're caught driving without insurance in California, you may have to pay fines and surrender your driver's license. Here's what to know about California's minimum auto insurance requirements.

California car insurance requirements and minimums

Most drivers choose to fulfill their financial responsibility by purchasing an auto insurance policy. If you choose to go this route, here's what a minimum-coverage policy includes:

California required car insurance coverage

CA required min. limits
Bodily injury (BI) liability insurance$15,000 per person/$30,000 per accident
Property damage (PD) liability insurance$5,000 per accident

Here's a closer look at what the required coverages can do for you:

  • Bodily injury liability insurance: This type of coverage pays for the other party's medical expenses if the accident is deemed your fault. In California, you'll need bodily injury coverage of at least $15,000 per person and $30,000 per accident.
  • Property damage liability insurance: This coverage pays to repair the other party's vehicle, up to $5,000 per accident, if you're at fault.

While the coverages above are required by law, other optional forms of auto insurance can be useful to have on your policy:

  • Comprehensive and collision: Collision coverage pays to repair your own car when it's damaged in an accident, while comprehensive pays for other types of incidents that can happen to your car, such as vandalism, theft or damage from a natural disaster.
  • Uninsured/underinsured motorists: This coverage pays for your own medical bills and car repair expenses if you're hit by a driver who either doesn't have enough coverage or lacks it altogether. Nearly 15% of claims in California are due to uninsured motorists, which is the 14th highest rate in the nation — which is why experts recommend getting this type of coverage. You can choose uninsured motorist bodily injury, underinsured motorist bodily injury or uninsured motorist property damage
  • Medical Payments: Also known as MedPay, your auto insurance company will pay for reasonable and necessary medical bills you or your passengers have from an accident (regardless of who is at fault). Coverage typically goes in increments of thousands, and usually starts at $1,000 per person

CLCA program policy

There is one exception to the minimum coverages listed above. If you qualify for a policy through California's Low Cost Auto Insurance program, you can purchase auto insurance with lower limits and still satisfy the state auto insurance laws. The CLCA program aims to provide affordable car insurance for safe drivers whose household income falls within federal poverty guidelines.

Here are the minimum coverage limits with a CLCA policy:

  • Bodily injury liability insurance: $10,000 per person and $20,000 per accident.
  • Property damage liability insurance: up to $3,000 per accident.
  • Uninsured motorist BI: up to $10,000 per person and $20,000 per accident. This is optional coverage.
  • Medical payments: up to $1,000 per person. This is also optional.

Alternative types of financial responsibility

Apart from an auto insurance policy, there are three other acceptable forms that can prove you're financially responsible. However, not every alternative is available to all drivers.

Cash deposit: You can make a cash deposit that covers liability expenses if you're at fault in a car accident. You'll first deposit $35,000 in a savings account with any bank, and contact the DMV Financial Responsibility Unit to fill out and submit the application form. Going forward, simply make sure there's always $35,000 in that account. The DMV will be able to draw from the account and use those funds if you're at fault in a car accident.

Certificate of self-insurance from DMV: You can get a self-insurance certificate from the California DMV if you own more than 25 vehicles in your name. The certificate states that you can cover medical bills, car repairs and property damage expenses as a minimum-liability policy would. Before issuing the certificate, the department may require evidence that you can meet these financial demands.

Surety bond: You can purchase a $35,000 surety bond, which guarantees you'll cover medical bills, car repairs and other property damage expenses in the event you're at fault in a car accident. If you can't pay for these expenses, the surety company will step in — but they'll seek payment from you later. Contact the California Department of Insurance for a list of licensed surety companies in California that offers this type of bond.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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