California Auto Insurance Requirements & Laws

As of January 1, 2025, California updated its minimum liability coverage requirements to 30/60/15. This means $30,000 for bodily injury per person, $60,000 for bodily injury per accident when multiple people are injured, and $15,000 for property damage per accident. These limits increased from the previous 15/30/5 requirements that had been in place for over 50 years. This change reflects the rising costs of medical care and vehicle repairs in California.

No, uninsured motorist (UM/UIM) coverage is not legally required in California. However, California law mandates that insurance companies must offer it to you when you purchase a policy, and you must explicitly decline it in writing if you don't want it. With approximately 15% of California drivers being uninsured (about 1 in 7), this coverage is highly recommended. It protects you if you're hit by a driver without insurance or in a hit-and-run accident.

Driving without insurance in California can result in severe penalties. For a first offense, you face fines of $100-$200, but with penalty assessments, the total can reach $450-$500. Your driver's license may be suspended for up to 4 years, and your vehicle could be impounded. For a second offense within 3 years, fines increase to $200-$500 (totaling $900-$1,200 with fees), and consequences become more severe. If you cause an accident while uninsured, you lose the right to sue for pain and suffering damages and will need SR-22 insurance for 3 years.

California law doesn't require comprehensive and collision coverage. However, if you have a car loan or lease, your lender will almost certainly require both coverages to protect their financial interest in the vehicle. These coverages protect your own vehicle from damage (collision) and non-collision events like theft, vandalism, fire, or weather damage (comprehensive). Even if not required, they're recommended if your vehicle has significant value or if you couldn't afford to replace it.

California's Financial Responsibility Law requires all drivers to prove they can pay for damages or injuries they might cause in an accident. Most drivers meet this requirement through auto insurance with the minimum 30/60/15 coverage. Alternatives include posting a $35,000 cash deposit with the DMV, obtaining a $35,000 surety bond from a licensed company, or qualifying for self-insurance (typically for businesses with 25+ vehicles). The law ensures accident victims can receive compensation for their losses.

Yes, since 2013, California has accepted electronic proof of insurance displayed on smartphones, tablets, or other electronic devices. The display must be readable, and you're responsible for ensuring your device is charged and functional. Officers won't be liable for any damage to your device while viewing your insurance information. It's recommended to screenshot your insurance card for offline access, as you may not always have internet connectivity when needed.

Proposition 103, passed in 1988, is a landmark California law that provides significant consumer protections for insurance. It requires insurance companies to get approval before implementing rate increases over 7%, prohibits the use of credit scores in determining rates (unlike most other states), mandates a 20% good driver discount for qualified drivers, allows public participation in rate hearings, and created the elected position of Insurance Commissioner. This law has saved California drivers billions of dollars and keeps insurance practices more transparent and fair.

The California Low Cost Automobile Insurance Program (CLCA) provides affordable liability insurance for eligible low-income good drivers. To qualify, your household income must be below 250% of the federal poverty level, you must have a clean driving record for 3 years, be at least 19 years old, and own a vehicle valued at $25,000 or less. The program offers policies with 10/20/3 coverage at significantly reduced rates, though it's only available in certain counties. This helps ensure all Californians can meet legal insurance requirements regardless of income.

In California, most moving violations affect your insurance rates for 3-5 years from the violation date. Minor violations like speeding tickets typically impact rates for 3 years, while serious violations like DUI can affect rates for 10 years. At-fault accidents generally impact rates for 3-5 years. Points on your DMV record last 3 years for most violations, but the insurance impact may last longer. Insurance companies can look back further in your driving history but typically focus on the past 3-5 years when determining rates.

Rideshare drivers in California need special insurance coverage because personal auto policies exclude commercial driving. While companies like Uber and Lyft provide coverage during different periods of driving (Period 1: app on, waiting for ride request; Period 2: ride accepted, heading to passenger; Period 3: passenger in vehicle), gaps can exist. California requires rideshare companies to provide primary liability coverage of at least $50,000 per person/$100,000 per accident/$30,000 property damage when the app is on. Many insurers now offer rideshare endorsements to fill coverage gaps.

California has scheduled another increase in minimum liability coverage for January 1, 2035, when limits will rise to 50/100/25 ($50,000 per person, $100,000 per accident, $25,000 property damage). This phased approach gives drivers time to adjust to higher premiums while ensuring coverage keeps pace with inflation and rising costs. Drivers should prepare for these increases by gradually raising their coverage limits now, as having higher limits can actually provide better value and protection than waiting for mandated increases.

California has some of the strongest insurance consumer protections in the nation. The Department of Insurance investigates complaints, insurers cannot cancel policies for filing legitimate claims, companies must provide clear reasons for non-renewal, rates must be approved before implementation, and unfair discrimination is prohibited. The state also requires insurers to offer payment plans, limits the use of non-renewal after claims, and provides a FAIR Plan as an insurer of last resort. Consumers can file complaints with the Department of Insurance if they believe they've been treated unfairly.