Get Auto Insurance In California: A Step-By-Step Guide

Getting auto insurance in California is a straightforward process, but there are a few key things to know. Firstly, it is mandatory to have auto insurance in California, and you must carry evidence of your insurance in your vehicle at all times. The minimum liability insurance requirements are $15,000 for injury/death to one person, $30,000 for injury/death to more than one person, and $5,000 for damage to property. These requirements are set to increase in 2025. When choosing an insurance provider, you may want to consider customer reviews and pricing. Some of the cheapest providers in California include Geico, Mercury, Progressive, and AAA.

Minimum liability insurance requirements

In California, drivers are required to have a minimum level of liability insurance. This includes:

• $15,000 for injury/death to one person
• $30,000 for injury/death to more than one person
• $5,000 for damage to property

These minimum liability insurance requirements are set out in the California Insurance Code §11580.1b. Liability insurance compensates a person other than the policyholder for personal injury or property damage. It is important to note that comprehensive or collision insurance does not meet these minimum financial responsibility requirements.

While these are the minimum requirements, it is recommended that drivers assess their coverage needs based on their driving habits and budget. For example, if your car is worth more than $5,000 or is less than eight years old, you may want to consider adding collision and comprehensive coverage. Additionally, if you live in an expensive ZIP code area and have savings or investments, increasing your liability insurance limits and adding umbrella coverage may be advisable to protect your assets. On the other hand, if you are a college student with an older car who doesn't drive frequently, you may not need as much protection.

Acceptable insurance types

In California, there are several types of auto insurance available to drivers. The state requires a minimum of bodily injury and property damage coverage. Here is a list of acceptable insurance types:

• Personal Liability Coverage: This includes the minimum liability coverage required by the state and other higher coverage policies depending on the company. It covers damage and injuries incurred from a collision that the policyholder causes and is proven negligent in, with specific limits per person.
• Uninsured/Underinsured Motorist Coverage: Insurance companies are mandated to offer this coverage, but drivers can choose to waive it. This coverage pays for injuries to the insured and others in the insured's car when there is an accident with an uninsured or underinsured driver at fault.
• Collision Coverage: This policy is beneficial for accidents involving pedestrians, vehicles, and property that damage the driver's car. Covered drivers can file claims to compensate for the total damage their car sustains in a collision, either as a total loss to replace the vehicle or to repair the damage.
• Comprehensive Coverage: When cars are damaged by natural disasters, falling objects, or other circumstances beyond the policyholder's control, comprehensive coverage pays for the damage. At times, comprehensive coverage is required to lease or rent a car.
• No-Fault Medical Coverage: No-fault medical coverage, such as Med Pay, is an optional coverage plan that covers medical expenses or healthcare costs and funeral expenses for the policyholder and passengers. Personal injury protection (PIP) covers medical expenses and lost wages for injured individuals in a car accident, regardless of who was at fault.
• Self-Insured and DMV Cash Advance Options: California DMV allows drivers to present acceptable forms of insurance coverage, such as a standard auto coverage policy or self-insured options. To be self-insured, drivers must provide a cash deposit of $35,000 to the DMV, obtain a DMV-issued self-insured certificate, or have a surety bond of $35,000 from a company licensed to operate in California.

Penalties for driving without insurance

In California, driving without insurance is considered a severe offense and can result in various penalties, including fines, vehicle impoundment, and suspension of driving privileges. The penalties vary depending on whether it is a first-time or repeat offense and the specific circumstances of the situation. Here is an overview of the penalties for driving without insurance in California:

First-Time Offense:

If you are caught driving without insurance in California for the first time, you can expect to pay a fine ranging from $100 to $200, plus penalty assessment fees, which can double or triple the fine amount. The total cost, including extra fees and assessments, can reach approximately $400 to $450. Additionally, the court may impound your vehicle.

Second and Subsequent Offenses:

For a second offense, the fines increase to a range of $200 to $500, and penalty assessments can bring the total cost to between $520 and $1,300. This amount is substantial, considering it is close to the average annual cost of car insurance in California, which is $2,148. The state may also impound your vehicle, and you will be responsible for any towing and storage fees.

Repeat offenders may face more severe penalties, such as vehicle impoundment and a suspension of driving privileges for up to four years.

Penalties for Causing an Accident Without Insurance:

If you are involved in an accident and cannot show proof of insurance, the penalties become more serious. The state will suspend your license for one year and impose a fine of up to $200 for a first offense or up to $500 for subsequent offenses. Your vehicle may be impounded until you pay any towing and storage fees. After one year, you can apply to have your driving privileges reinstated, provided you maintain an SR-22 form and proof of financial responsibility for three years. A second offense after a collision can result in a license suspension of up to four years.

It is important to note that these penalties are in place to ensure compliance with the state's financial responsibility laws and to provide protection in case of accidents. Driving without insurance in California can result in significant financial consequences and legal complications.

Discounts and savings

There are a variety of discounts and savings available for auto insurance in California. Here are some ways to save on your auto insurance:

Multi-Policy Discounts

You can often get a discount by bundling multiple policies with the same company. This could include bundling your auto insurance with home insurance, renters insurance, condo insurance, RV insurance, boat insurance, or life insurance. The discount for bundling auto and home insurance is typically between 5% and 25%.

Multi-Car Discounts

Insuring more than one car with the same insurance company can also result in a discount, usually advertised as up to 8% to 25%.

Vehicle Safety Discounts

If your car has safety features such as anti-lock brakes, airbags, and daytime running lights, you may be eligible for a discount. Airbag discounts for full-front seat airbags can be as high as 40% applied to your medical payments or personal injury protection coverage. Cars that are less than three years old may also qualify for a new car discount, typically between 10% and 15%.

Anti-Theft Device Discounts

If your car has anti-theft features, you can usually get a discount of up to 5% to 25% off your comprehensive coverage. This includes both factory-installed and after-market-installed devices. Examples of anti-theft devices include GPS-based systems, stolen vehicle recovery systems, and VIN etching.

Good Driver Discounts

Many insurance companies offer discounts for good drivers with incident-free records. For example, Geico offers up to 26% in potential savings if you haven't had any accidents in five years. Good driver discounts typically range between 10% and 40%.

Defensive Driver Discounts

Some insurance companies provide a discount if you take an approved defensive driving course. This discount may only apply to qualified drivers above a certain age, typically 50 or older. Defensive driver discounts usually range from 5% to 10%.

Good Student Discount

If you or your student driver is enrolled full-time at a high school or college and meets certain requirements, you may be eligible for a discount. Typically, the student must maintain at least a B average and be between the ages of 16 and 25. Good student discounts can range from 8% to 25%.

Student Away at School Discount

If your student is away at school without a car, you may qualify for a discount. The requirements vary, but generally, the student must be under 25 years old, more than 100 miles from home, and only have access to the insured car during school vacations and holidays.

These are just a few examples of the many discounts and savings opportunities available for auto insurance in California. Be sure to ask your insurance provider about any other potential discounts you may qualify for.

Required insurance for leased or financed vehicles

In California, insurance is required for all vehicles that are operated or parked on roads. The same insurance requirements apply whether you lease, finance, or own your car. However, there are some specific considerations for leased or financed vehicles.

When leasing or financing a vehicle, you will likely be required to carry full coverage, which includes comprehensive and collision insurance, rather than just the state-mandated minimum. This is to protect the lender's investment in the vehicle. Additionally, your lender may require you to carry specific coverage amounts and set coverage parameters, such as a maximum deductible for comprehensive and collision coverage.

Bodily Injury Liability Insurance

Bodily injury liability insurance covers the medical expenses and lost wages of people other than yourself or your family who have been injured in an accident that was your fault. In California, the minimum coverage per person is $15,000, and the minimum coverage per accident is $30,000. However, leasing companies may require higher bodily injury liability limits, such as $100,000 per person and $300,000 per accident.

Property Damage Liability Insurance

Property damage liability insurance covers the cost of repairing damage to others' vehicles or property if you are found at fault in an accident. In California, the minimum property damage liability coverage required is $5,000 per accident. However, leasing companies may require a higher amount, such as $50,000.

Comprehensive Coverage

Comprehensive coverage applies to damage to your vehicle caused by events outside of your control, such as fire, theft, vandalism, weather events, or collisions with animals. While not required by the state, comprehensive coverage is typically required by leasing companies.

Collision Coverage

Collision coverage applies to damage to your vehicle caused by colliding with another vehicle or object, such as a fence or building. Like comprehensive coverage, collision coverage is typically required by leasing companies.

Gap Insurance

Gap insurance covers the difference between the car's current value and the amount you owe on the lease or finance agreement if the vehicle is totaled or stolen. This type of insurance is important for leased vehicles because new vehicles depreciate quickly once driven off the dealer's lot. Some leasing companies may require you to maintain gap insurance.

It is important to carefully review the insurance requirements of your lease or finance agreement and understand the specific coverages and amounts needed before signing any paperwork.

Frequently asked questions