Requirements and Laws for California Car Insurance

Requirements and Laws for California Car Insurance

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In California, all drivers are required to have auto insurance or some form of financial responsibility before hitting the road. The state's minimum car insurance requirements include $15,000 in liability coverage for a single other driver's injury, $30,000 in coverage per accident and $5,000 in coverage for property damage.

While car insurance is the easiest way to meet the financial responsibility requirement, you can instead choose an alternative form of coverage. But if you're caught driving without insurance in California, you will likely have to pay fines and surrender your driver's license.

Minimum insurance requirement in California

California drivers must maintain the following minimum coverage as part of their car insurance:

California required car insurance coverage
California required minimum limits
Bodily injury (BI) liability insurance$15,000 per person/$30,000 per accident
Property damage (PD) liability insurance$5,000 per accident

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 motorist: 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. You can choose uninsured/underinsured motorist bodily injury and/or uninsured/underinsured motorist property damage.
  • Medical payments (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 comes in $1,000 increments and usually starts at $1,000 per person.

California liability insurance

All drivers in California must carry some kind of liability coverage, which pays for injuries or damage you cause in an accident where you are at fault.

  • 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.

Those minimum limits will often not cover the full medical expenses or damage to another vehicle. You will likely have to pay the remaining costs, so it's a good choice to get higher limits to protect your assets.

CLCA program policy

There is an exception to the minimum coverage requirements. If you qualify for a policy through California's Low Cost Auto Insurance Program, or CLCA, 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.

Is California a no-fault state?

California is not a no-fault insurance state. This means California drivers are not required by law to purchase personal injury protection (PIP) coverage.

PIP insurance covers the medical injury costs to a driver and their passengers after an accident. Drivers in no-fault states also have limited ability to sue other drivers over damages.

California penalties for driving without insurance

If you're found guilty of driving without insurance, you will have to pay fines and potentially deal with other penalties if you are a repeat offender.

  • First offense: A fine between $100 and $200, as well as penalty assessment fees, which are $26 per $10 of the base fine.
  • Second offense and every offense thereafter: A fine of $200 to $500, plus penalty assessment fees.
  • Other potential penalties: You may need to file an SR-22 certificate and deal with a suspended license and registration and the reinstatement fees that might come with that.

Alternative types of financial responsibility

Apart from an auto insurance policy, there are three other acceptable forms in California 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 would be used to cover liability expenses if you're at fault in a car accident. You'll first deposit $35,000 in a savings account with any bank, then 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 the 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 it will seek payment from you later. Contact the California Department of Insurance for a list of licensed surety companies in California that offer this type of bond.

Frequently asked questions

What is the minimum insurance requirement in California?

The minimum requirements for car insurance in California are $15,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident and $5,000 in property damage coverage.

Is car insurance required in California?

Car insurance is not required in California, but it is the most common and streamlined way to satisfy a financial responsibility requirement to drive legally. If you choose not to get insurance, your other options are a surety bond, a certificate of self-insurance from the DMV or a cash deposit.

What type of insurance is required in California?

Liability insurance is the only type required for California drivers. They are required to have both bodily injury and property damage liability coverage.

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