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California Minimum Car Insurance Requirements, Penalties and Other Auto Insurance Laws
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What Is the Minimum Car Insurance Requirement in California?
If you’re wondering how much car insurance you need in California, the state’s Department of Insurance gives the minimum allowable coverage limit. The minimum car insurance requirement in California is 15/30/5, which is much lower than most other states. It means your policy should have at least the following:
- $15,000 for bodily injury liability per person
- $30,000 for bodily injury liability per accident
- $5,000 for property damage liability per accident
Having car insurance provides you with protection while on the road, especially if you get into an accident. Driving without insurance is also illegal in California. Your inability to show proof of insurance during a traffic stop may result in various penalties. These may range from being fined to having your license and registration suspended or worse.
If you’re a low-income driver, you can acquire low-cost insurance under the California Low Cost Auto (CLCA) program. The minimum coverage requirement is 10/20/3. This means:
- $10,000 for bodily injury liability per person
- $20,000 for bodily injury liability per accident
- $3,000 for property damage liability per accident
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What Does This Minimum Coverage Mean?
Since California is an at-fault state, it means you’re liable for the other driver’s expenses from medical bills or property repairs if you cause an accident. A policy meeting California’s minimum car insurance requirement of 15/30/5 means that it covers medical expenses up to $30,000 for all individuals who sustain injuries in an accident, with a cap of $15,000 per person. It also helps with costs from property damage up to $5,000.
Realistically, being at fault for an accident may result in expenses much higher than what a policy meeting California’s minimum car insurance requirement covers. It means you’ll have to cover the remaining amount out of your pocket, which could severely deplete your savings.
A low-cost policy from CLCA follows the same format. Having 10/20/3 liability limits means you’re protected against costs up to $20,000 from injuries sustained in an accident, with a $10,000 cap for each person. Property damages up to $3,000 are also covered.
How Much Does the Minimum Car Insurance Cost in California?
The cost of car insurance in California is, on average, $1,429 per year. California does not allow insurers to use several common rating factors to price coverage, including credit history, gender and ZIP code. They use other factors, such as your age, driving record, claims history and the city where you live to set rates.
It’s best to compare quotes from several providers since they offer different rates for policies with similar coverages. Progressive offers the most affordable liability-only policy in California meeting the state's minimum car insurance requirements for $481 per year.
These prices are only estimates based on rates for an average California driver and should not be used to compare insurance prices.
The rates above are for a 40-year-old driver residing in California with a clean record driving a 2010 Toyota Camry. All premiums are for policies meeting California’s minimum car insurance requirements of 15/30/5.
If you're instead looking for a policy that balances quality with affordability, MoneyGeek also ranked the top car insurance companies in California.
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What Is the Minimum Car Insurance Requirement in California While Leasing a Car?
It's the lender, not the state, that determines insurance requirements for car leases in California. Even if your policy’s limits meet California’s minimum car insurance requirements, they may not be enough for your leasing company.
Most lenders would require you to carry full coverage car insurance with increased liability limits of at least 100/300/50. If you want to know the specific requirements of your leasing company, it's best to get in touch with them directly. This way you’ll know detailed information about topics like insurance requirements and payment terms.
When determining how much car insurance you need in California, the minimum liability requirements aren’t the only thing you should consider. MoneyGeek recommends increasing your limits to at least 50/100/50. It may increase your rate, but it provides you with more financial protection from at-fault accidents and other vehicle-related incidents.
Although car insurance is required in California, around 17% of its drivers remain uninsured, according to 2022 data from the Insurance Information Institute (Triple-I). The likelihood of getting into a collision with an uninsured driver is relatively high — if they are at fault, they have no coverage to pay your damages. It makes purchasing uninsured/underinsured motorist insurance a good investment despite not being included in California’s car insurance requirements, but every insurer in California must offer these coverages.
Penalties for Driving Without Car Insurance in California
You need car insurance in California if you want to drive legally on the state’s roads and highways. Failure to show proof of financial responsibility may result in various penalties, such as:
- Fines of $100–200 plus penalty assessments for the first offense
- Fines of $200–500 plus penalty assessments for subsequent offenses
- The possibility of vehicle impoundment
- Suspension of vehicle registration
- License suspension of four years if after a collision (may be reinstated after one year if you provide proof of insurance to the DMV)
To get your license reinstated, you'll have to purchase insurance from a carrier that provides coverage for SR-22 drivers and hold it for an average of three years. An SR-22 California Proof of Insurance Certificate labels you as a high-risk driver, which typically results in higher premiums and fewer options for coverage.
Frequently Asked Questions About Car Insurance in California
Having car insurance is a requirement in California. California’s insurance laws state that you need to show financial responsibility for all vehicles you own. You also need to carry proof of insurance in your car at all times.
You don’t need car insurance in California to get your vehicle registered. However, the DMV will require the following documents from you:
- Title and registration application form
- Verification of vehicle form
- Emission test results
- Proof of inspection
If you recently transferred and registered your car in another state, you’ll have to present its out-of-state title and registration.
Your policy must meet California’s minimum car insurance requirement of 15/30/5 liability coverage. It means that should you be at fault in an accident, your insurance provider can help you cover expenses up to $30,000 for injuries the other parties may have sustained, with a maximum coverage of $15,000 per person. A minimum coverage policy also covers property damage up to $5,000 per accident.
When you allow a person to drive your car that is not listed on the policy, you are also, in essence, lending them your insurance. If they cause an accident while behind the wheel of your vehicle, your insurance provider will still provide coverage for any damage they may have caused.
You can purchase car insurance in California even if you don’t have a valid driver's license. This possibility is beneficial, especially if you have a medical condition that prevents you from being behind the wheel, but you still need a car for your caretaker or a relative to drive. Another situation where it's an advantage is if you have a permanent chauffeur who drives you from location to location.
It’s typically more challenging to get insurance if the state revoked your license due to a violation.
California is an at-fault state, not a no-fault state. It means that if you cause an accident, you are obligated to cover the other party’s expenses from injuries and property damage.
No, personal injury protection (PIP) is not part of California’s minimum car insurance requirements, nor is it available in the state. California does have MedPay, which covers the cost of medical expenses if you or your passengers are injured, regardless of who was at fault. It is an optional coverage you can add to your auto policy.
California does not require you to purchase uninsured motorist coverage or underinsured motorist coverage, but every insurer must offer these coverages, and if you choose not to have them, you must decline them in writing. That said, California ranks as the 11th highest state with 17% of drivers uninsured, according to the Triple-I. Purchasing uninsured motorist coverage may increase your premium, but it also provides you more protection.
You may file a diminished value claim in California as long as it is within three years of when the accident occurred. If you were at fault, it is not valid. What caused the damage is another limitation — it must be because of a collision if you want to file for diminished value compensation.
If you have a DUI on your driving record, it may result in several things. You’ll need to file an SR-22, which tags you as a high-risk driver. It also causes your annual rate to increase significantly, for at least three years, depending on your insurer, as car insurance providers consider you riskier to insure. For example, a driver with a clean record pays an average of $1,429 per year for car insurance in California. In comparison, if you have a DUI, your premium becomes $4,075 on average. It's also important to note a DUI will stay on your record for 10 years in the Golden State.
Vehicle inspections may be a requirement in California to obtain insurance coverage. A certified safety inspection can be performed by any official California Department of Transportation service station.
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sources
- California Department of Insurance. "Automobile Insurance Information Guide." Accessed September 15, 2021.
- National Association of Insurance Commissioners (NAIC). "Credit-Based Insurance Scores." Accessed September 15, 2021.