California Car Insurance Requirements

How much car insurance do California vehicle owners need?

In California, vehicle owners need to show proof of insurance (or another form of "financial responsibility") in order to register a vehicle, and if you're involved in a car accident in California, car insurance is sure to play a huge part. In this article, we'll explain:

  • California law as it relates to insurance and "financial responsibility" for car accidents and car insurance for registered vehicles
  • how California's car insurance laws work in the context of an insurance claim or lawsuit after a crash, and
  • the minimum requirements for liability car insurance coverage in California.

California Is a "Fault" Car Accident State

California follows a "fault" system when it comes to liability for a car accident. That means drivers are financially responsible for the effects of any accident they cause.

There are very few restrictions on the options of anyone injured in an accident, when it comes to pursuing an insurance claim or lawsuit against whoever caused the crash. After a car accident in California, if you've suffered an injury as a driver, passenger, or pedestrian, you are usually free to take one or more of the following actions in trying to get compensation for your losses ("damages"), including medical bills, lost income, property damage, and "pain and suffering":

  • file a claim under your own insurance policy (if you have the right coverage, more on this later)
  • pursue a third-party claim through the at-fault driver's liability insurance coverage, or
  • file a personal injury lawsuit against the at-fault driver.

Note: In a no-fault car insurance state, a driver who has been injured in an accident must usually turn first to his or her own car insurance policy for payment of things like medical bills and lost income, regardless of who was at fault for the accident. In no-fault states, an injured person must meet certain threshold requirements in order to step outside the no-fault car insurance system and make a claim against the at-fault driver.

Minimum Liability Car Insurance Requirements in California

In order to comply with California's "financial responsibility" laws, most vehicle owners choose to purchase liability insurance coverage, and state law dictates the minimum amount that vehicle owners must carry.

This liability insurance is meant to compensate other drivers, passengers, or pedestrians who suffer property damage and/or personal injuries in a car accident caused by you (or caused by anyone covered under your liability policy). The minimum amounts of liability coverage required under California law are:

  • $15,000 for injury or death to one person (another driver, passenger, pedestrian, etc.) in an accident you cause
  • $30,000 for injury or death to more than one person in an accident you cause, and
  • $5,000 for damage to property in an accident you cause.

Remember that these are only the California minimum requirements for liability car insurance coverage. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.

Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car in California.

Remember also that the liability coverage we discussed here doesn't apply to your own injuries or vehicle damage after a car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.

Finally, while California does not require drivers to buy uninsured/underinsured motorist coverage, this kind of coverage can provide you with critical financial protection if you're in an accident with someone who has no car insurance, or whose coverage won't pay for your medical bills and other losses.

Other Options for Complying with California's "Financial Responsibility" Requirement

While the overwhelming majority of car owners in California will purchase a car insurance policy in order to comply with the state's "financial responsibility" laws, California does allow vehicle owners to choose from a few other methods of compliance. Instead of purchasing a qualifying insurance policy, vehicle owners can:

  • make a cash deposit of $35,000 with the California Department of Motor Vehicles (DMV)
  • get a self-insurance certificate from the California DMV, or
  • get a $35,000 surety bond from an issuer licensed to do business in California.

More Information on California Car Insurance Rules

For more information on car insurance in California, straight from the state, see Insurance Requirements for Vehicle Registration from the California DMV.

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