Most states require drivers to carry a minimum amount of car insurance on any vehicle registered in the state — and California is no exception. In fact, the Golden State is updating the California minimum car insurance requirements for the first time since 1967. The new limits go into effect on January 1st, 2025. Until then, you can legally drive without incurring penalties if you meet the current California car insurance requirements. However, the minimum coverage may fall well short of your needs if you’re ever in an accident.
Wawanesa is committed to ensuring our clients are fully informed of all California car insurance laws, driving regulations, and safety measures. We write our auto insurance policies to comply with state law, but the bare legal minimums may not provide you with adequate protection in an accident. We compiled this quick guide to help you better understand the current and upcoming legal minimum insurance coverage and other options that better protect you and your vehicle in case of an accident.
Overview of California Car Insurance Laws
Car accidents will happen anywhere there are drivers. States require car owners to maintain auto insurance coverage to ensure that anyone hurt in a collision will receive compensation. California minimum car insurance requirements also alleviate a considerable financial burden on the state’s social safety nets and emergency funds.
The California Insurance Code and Vehicle Code mandate California auto insurance requirements. The California Department of Insurance (CDI) oversees insurance regulations and enforces consumer protection. The Department of Motor Vehicles (DMV) requires proof of insurance during vehicle registration. If you’re ever pulled over for any reason, you must show proof of insurance, or you’ll receive a ticket requiring you to get insurance and pay a fine.
There are several types of car insurance coverage, but California car insurance laws only require liability coverage. Liability car insurance protects you financially if you are found to be at fault for an accident. It helps pay for medical bills and property damage repairs for those involved in an accident you caused. It’s important to remember that liability coverage does not help pay for damage to your car or medical bills.
Minimum Coverage Requirements: What's Changing in 2025?
Under California law, you must carry two types of liability coverage (bodily injury and property damage) with minimum coverage limits.
Through December 31st, 2024, California drivers must carry insurance with minimum limits of $15/$30/$5, or:
- $15,000 for bodily injury or death per person
- $30,000 for bodily injury or death per accident
- $5,000 for property damage per accident
The new limits that go into effect on January 1, 2025 are 30/60/15, or:
- $30,000 for bodily injury or death per person
- $60,000 for bodily injury or death per accident
- $15,000 for property damage per accident
It’s worth noting that even if you carry higher limits of $100/$300/$5, you’ll still need to increase your property damage to $15,000.
It’s crucial to understand that California is a “pure comparative negligence state.” This means if you’re found to be at least 1% at fault for an accident, you could be responsible for paying some or all of the medical and car repair bills for anyone else involved in the accident.
The California minimum car insurance coverage is the legally mandated minimum that allows you to drive legally without financial penalty. It is not the recommended coverage and may not adequately protect you or your assets if you’re in an accident.
Penalties for Non-Compliance
The penalties for violating California insurance laws can be severe. The first time you’re caught driving without the minimum required insurance coverage, you’ll receive a ticket. To satisfy the ticket, you must obtain the missing insurance and pay a $100 to $200 fine.
Your car registration may be suspended, and if you also committed a moving violation, you may get points added to your record for it and the lack of coverage, leading to more expensive insurance rates.
If you’re stopped a second time and have no insurance, your fine will be higher, and your car may be impounded. The state is very serious about California insurance laws. Violating them puts you at tremendous risk, especially if you’re involved in an accident.
Is Minimum Liability Coverage Right for You?
It can be tempting to purchase only the California minimum car insurance coverage. By purchasing the minimum, you can save money on your monthly car insurance premiums, but this is a short-sighted approach to finances.
Let’s say you accidentally cause a wreck, resulting in injuries and car damage to another driver. You’ll likely be on the hook to cover their medical bills and car repair costs. Their medical bills are $45,000, and their new car has $20,000 worth of damage. The new minimum liability insurance coverage will only cover the first $30,000 in medical bills and $15,000 to repair the damages. You’ll be responsible for the remaining $15,000 of medical bills and $5,000 in out-of-pocket repairs.
Additional Coverage Options
California’s auto insurance requirements mandate that you carry Bodily Injury Liability and Property Damage Liability to reimburse others for damages that occur in an accident. If you carry only the minimum coverage required by law, your policy will not pay a penny to compensate you for any injury or damage you experience.
For car insurance that protects you against injury to you or damage to your car, you need additional coverage. These optional coverage types include:
- Collision: Collision coverage pays for damage to your vehicle resulting from an accident, regardless of fault.
- Comprehensive: This type reimburses you for damage to your car that occurs outside of a collision, such as vandalism, theft, fire, storms, hitting an animal, etc.
- Uninsured/Underinsured Motorist Property Damage: If the other driver is at fault for an accident but is uninsured, this covers property damage to your car.
- Auto Medical Payments: This helps to pay medical bills and related expenses for you and your passengers injured in your vehicle. It also covers you if you’re injured by a car while outside your vehicle walking, biking, jogging, etc.
While these optional coverage types are not required to meet California minimum car insurance requirements, they protect you and your financial security in the event of a car accident. Most financial experts recommend raising your liability to $50,000 per person and $100,000 per accident if you have few assets. With more assets — like a house, expensive car, or significant savings — experts recommend bumping your coverage up to at least $100,000 per person and $300,000 per accident.
You have worked long and hard for the assets and money you have. Don’t let them be wiped out by a single auto accident.
Wawanesa’s Compliance and Benefits
Wawanesa specializes in providing exceptional car insurance and customer service for California drivers. We write our auto insurance policies to conform to and exceed all California car insurance laws. Our goal is to ensure you and your finances are well-protected in the event of an accident.
At Wawanesa, we’re proud that our customers trust us to protect them when they’re most vulnerable. Since you’re here, why not take a few moments to ensure you’re fully protected? Contact a friendly Wawanesa insurance professional to review your policy. Let’s find out what California car insurance coverage is right for you. Looking for better coverage with lower rates? Get a free quote today to see how Wawanesa can help.
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