California's Driver-Based Insurance: Coverage On The Move

In California, car insurance typically follows the car, not the driver. This means that the insurance policy attached to a specific vehicle is the primary coverage that applies when that vehicle is involved in an accident, regardless of who is driving. However, there are exceptions to this rule, and it's important to understand the terms permissive use and non-permissive use. If you lend your car to someone with your permission, your insurance coverage will likely need to pay for any damages. On the other hand, if someone takes your car without permission, your insurance company will not cover the accident, and the driver's personal insurance may need to be used.

In California, car insurance typically follows the car, not the driver

However, it is important to note that this is not always the case, and there are exceptions to this rule. For example, if the driver does not have the owner's permission to drive the car, this is considered "non-permissive use", and the driver's personal insurance may need to cover the damage. Additionally, if the driver is not licensed or the car is taken without permission, the driver is typically held responsible. Furthermore, insurance companies may refuse to cover damages when someone is a frequent driver of the car and is not listed on the policy.

In California, it is mandatory to have auto liability insurance to show financial responsibility in case of injury to other people or damage to their property. The minimum insurance limits for a standard auto policy are $30,000 for the death or injury of any one person. Liability coverage helps pay for injuries or damage caused to others, but it does not cover injuries to the insured or the people in their household. For that, one must purchase medical payments coverage.

It is always a risk to lend your car to someone else, as you may end up filing a claim using your insurance. It is advisable to review your insurance policy and make sure you have the protection you need.

If a car is taken without permission, the driver is responsible

In California, car insurance typically follows the car, not the driver. This means that the insurance policy attached to a specific vehicle is the primary coverage that comes into effect when that vehicle is involved in an accident, regardless of who is driving. However, this changes when the car is taken and driven without the owner's permission, in what is known as a "non-permissive use" scenario. In this case, the driver is generally responsible for any damages, and their insurance (if they have it) would typically be the primary source of coverage.

The "permissive use" principle, stated in California Vehicle Code section 17150, dictates that if a driver has the owner's permission to use the car, the owner is liable for any accidents. This makes sense in terms of insurance, as every car owner in California is required to have auto insurance, and this policy applies to the vehicle, not the person. Therefore, if someone borrows a car and gets into an accident, the owner's insurance will usually be the primary coverage. However, some policies may offer reduced coverage for permissive drivers, so it is important to review the details of your policy.

In the case of non-permissive use, the owner's insurance may deny coverage, leaving the driver personally responsible for any damages. The driver's insurance, if they have it, would then typically be the primary source of coverage. If the driver is uninsured, the owner may have to cover any expenses out of pocket. It is important to note that insurance companies may refuse to cover damages in a non-permissive use scenario, and it may be necessary to involve an attorney to navigate the complexities of these situations.

Additionally, there are exceptions to the permissive use principle. For example, if a car owner lends their vehicle to an unlicensed driver, they are independently negligent, and the responsibility for damages may fall back on them. Similarly, if a car owner lends their car knowing that it is unsafe due to a defect or malfunctioning part, they are again considered independently negligent.

Insurance companies may refuse to cover damages when someone is a frequent driver

In California, car insurance typically follows the car, not the driver. This means that the insurance policy attached to a specific vehicle is the primary coverage that comes into effect when that vehicle is involved in an accident, regardless of who is driving. In other words, when someone borrows your car, they also borrow your insurance coverage.

However, insurance companies may refuse to cover damages when someone is a frequent driver. This is because insurance companies may require the car owner to obtain coverage for drivers who regularly use the car. They may cover damages when the car is lent out occasionally, but not when it is driven regularly by someone other than the owner. This distinction underscores the importance of ensuring that anyone who frequently drives your car has your permission and appropriate coverage under their own insurance if necessary.

It is important to understand the terms "permissive use" and "non-permissive use". Permissive use occurs when the vehicle's owner has explicitly or implicitly allowed another individual to drive the car. Under such circumstances, the vehicle's insurance covers accidents. However, if the driver does not have the owner's permission – a scenario termed "non-permissive use" – the driver's personal insurance might need to cover the damage.

In the event that an insurance company denies a claim, it is advisable to hire an attorney to deal with the insurance company. The attorney could also work to file a claim against the driver's insurance if the owner's provider refuses to pay. It is important to note that insurance companies do not have the final say when they deny a claim, and legal action can be taken if necessary.

California has a Low-Cost Automobile Insurance Program for eligible drivers

In California, car insurance typically follows the car and not the driver. This means that the insurance policy attached to a specific vehicle is the primary coverage that comes into effect when that vehicle is involved in an accident, regardless of who is driving. However, California also has a Low-Cost Automobile Insurance Program (LCA) to help eligible drivers who may otherwise struggle to afford insurance.

The California Low-Cost Automobile Insurance Program was implemented in 2000 to address the issue of uninsured motorists in the state. The program aims to provide affordable automobile liability insurance to eligible drivers who can demonstrate financial need and meet other program qualification requirements. California law requires all drivers in the state to carry a minimum level of auto insurance, and the LCA program helps good drivers who are income-eligible to obtain the necessary coverage.

To be eligible for a policy under the LCA program, drivers must meet certain income requirements. Households must fall below specified income thresholds, with California defining a "household" as all persons listed on a federal or state income tax form. The program provides liability coverage for the vehicle's primary driver and eligible secondary drivers, with liability limits of $10,000 for bodily injury or death per person, $20,000 for bodily injury per accident, and $3,000 for property damage per accident. These limits satisfy the state's financial responsibility laws.

It is important to note that the LCA insurance program does not cover a driver's own medical or vehicle repair costs. Additionally, physical damage coverage, including comprehensive and collision coverage, is not available under this program. However, optional coverages such as Medical Payments Coverage of $1,000 per person and Uninsured Motorist Bodily Injury with limits of $10,000/$20,000 are available.

California law requires drivers to establish financial responsibility

The law requires drivers to carry evidence of financial responsibility in their vehicles at all times and to provide this evidence when requested by law enforcement, when renewing vehicle registration, or when the vehicle is involved in a collision. Failure to provide evidence of financial responsibility can result in a driving privilege suspension notice, and the driver or owner may be entitled to a hearing upon request.

There are several ways to establish financial responsibility in California. One way is to hold a DMV-issued certificate of self-insurance, which demonstrates that the individual has sufficient assets to cover any potential liabilities that may arise from a vehicle accident. Another way is to be covered under a form of liability insurance policy or surety bond, which provides protection for personal or bodily injury, property damage, and other costs associated with traffic accidents.

It is important to note that insurance typically follows the car, not the driver, in California. This means that the insurance policy attached to the specific vehicle is the primary coverage that comes into effect when that vehicle is involved in an accident, regardless of who is driving. However, there are exceptions to this, such as when the car is borrowed with the owner's permission ("permissive use") or taken without permission ("non-permissive use"). In these cases, the insurance coverage may depend on the specific circumstances and the driver's own insurance policy.

Frequently asked questions