Auto Insurance In California: Getting The Right Coverage

California requires drivers to carry at least minimum levels of liability insurance coverage on their vehicles to drive legally in the state. This includes the required minimum amounts of bodily injury liability and property damage liability coverage. According to the California Department of Motor Vehicles, all California motorists must carry at least $15,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident, and $5,000 in property damage liability per accident.

California also requires that insurance companies offer you uninsured and underinsured motorist bodily injury coverage, along with uninsured motorist property damage, but you can decline in writing if you do not want to have and pay for them.

Minimum insurance requirements in California

California requires drivers to carry at least minimum levels of liability insurance coverage on their vehicles to drive legally in the state. This includes the required minimum amounts of bodily injury liability and property damage liability coverage. According to the California Department of Motor Vehicles, all California motorists must carry at least:

• $15,000 in bodily injury liability coverage per person
• $30,000 in bodily injury liability coverage per accident
• $5,000 in property damage liability per accident

California also requires that insurance companies offer you uninsured and underinsured motorist bodily injury coverage, along with uninsured motorist property damage, but you can decline in writing if you do not want to have and pay for them. Understanding California’s car insurance laws can help you understand if you need additional coverage or higher limits.

The state also allows drivers to self-insure, which means forgoing traditional car insurance by showing proof of financial responsibility. This requires depositing a certain amount of money within a bond or a special account, only to be used if you get into a car accident. The amount you’re required to pay upfront could be anywhere from $35,000 to $300,000, depending on the state.

Lender requirements

Most lenders will require you to maintain a certain level of liability coverage, which pays for injuries or damage you cause to others in an accident. The minimum coverage limits in California are currently $15,000 per person and $30,000 per accident in bodily injury liability, and $5,000 in property damage liability. However, these limits will increase to $30,000 per person, $60,000 per accident in bodily injury liability, and $15,000 in property damage liability as of January 2025.

In addition to liability, collision, and comprehensive coverage, your lender may also require you to purchase gap insurance. This type of insurance covers the difference between the amount you owe on your loan or lease and the actual cash value of your vehicle if it is totaled or stolen. Gap insurance is typically cheaper to purchase from your insurer than from an auto dealer.

When signing your finance or lease agreement, be sure to carefully review the specific insurance requirements stipulated by your lender. Maintaining adequate insurance coverage is essential not only to comply with your lender's requirements but also to protect yourself financially in the event of an accident.

Individual needs

Firstly, it's important to understand the minimum insurance requirements in California. The state mandates that drivers carry at least $15,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident, and $5,000 in property damage liability per accident. Additionally, insurance companies are required to offer uninsured and underinsured motorist coverage, which you can decline in writing if you prefer. However, it's worth noting that these minimum requirements may not provide sufficient coverage in the event of a serious accident.

Secondly, consider your lender's requirements if you have a financed or leased vehicle. Lenders typically require collision and comprehensive insurance, also known as full coverage, to protect their investment. They may also require higher liability limits or additional coverage, such as gap insurance, which covers the difference between the actual cash value of your vehicle and the loan amount in the event of a total loss.

Lastly, reflect on your unique circumstances and individual needs. For instance, if you live in a highly congested area like Los Angeles or San Francisco, you may want more comprehensive coverage to protect against accidents. If you have teen drivers in your household, look for companies offering specialized discounts. Consider your driving record, the age and value of your vehicle, and whether you require additional coverage options like rental reimbursement or roadside assistance.

Average cost of car insurance in California

The average cost of car insurance in California is $2,599 per year for full coverage and $641 per year for minimum coverage. This is 12% more than the national average premium for full coverage, which is $2,348 per year.

The average monthly premium for minimum coverage in California is $53, while the average monthly premium for full coverage is $217.

The cost of car insurance in California is influenced by factors such as age, level of coverage, location, driving record, and credit history. For example, drivers in Los Angeles pay 36% more than the state average for full coverage, while the average cost in San Francisco is 13% higher.

When considering the level of coverage, minimum coverage in California costs around $50 per month, while full coverage with a $1,000 deductible is approximately $123 per month. Opting for full coverage is recommended as it offers more comprehensive protection.

To save money on car insurance in California, it is advisable to shop around for rates, maintain a clean driving record, increase the deductible, and bundle policies. Utilizing discounts for things like multiple vehicles, safe driving, or anti-theft devices can also lower premiums.

California state insurance requirements

California requires drivers to carry at least minimum levels of liability insurance coverage on their vehicles to drive legally in the state. This includes the required minimum amounts of bodily injury liability and property damage liability coverage. According to the California Department of Motor Vehicles, all California motorists must carry at least:

• $15,000 in bodily injury liability coverage per person
• $30,000 in bodily injury liability coverage per accident
• $5,000 in property damage liability per accident

California also requires that insurance companies offer you uninsured and underinsured motorist bodily injury coverage, along with uninsured motorist property damage, but you can decline in writing if you do not want to have and pay for them.

California allows even lower limits for people who can’t afford standard insurance. However, it’s a good idea to go beyond state minimum liability limits since accident claims can easily exceed these amounts. For example, if you’re in an accident and the other driver’s car repairs total more than $5,000, you’ll have to pay the difference out of your own pocket.

Frequently asked questions