Understanding California's Auto Insurance Minimum Requirements

California requires drivers to carry a minimum amount of auto insurance, which includes liability coverage for bodily injury and property damage. The minimum requirements are $15,000 per person and $30,000 per accident for bodily injury liability, and $5,000 per accident for property damage liability. California is a pure comparative negligence state, meaning that if a driver is found to be at least 1% at fault for an accident, they may be responsible for paying some or all of the medical and repair bills for other parties involved. While California's minimum insurance requirements are mandatory, they may not provide sufficient coverage in the event of a serious accident.

Bodily injury liability coverage

In California, it is mandatory to have bodily injury liability insurance in case you injure or cause the death of someone in a car accident. This is a form of third-party insurance that covers damages sustained by people in other vehicles in an accident caused by the policyholder. It does not cover the injuries of the policyholder or, depending on the policy, their passengers.

The minimum bodily injury liability coverage in California is currently $15,000 for the injury/death of one person and $30,000 total for the injury/death of more than one person in any one accident. This is often written as 15/30. From January 1, 2025, the minimum financial responsibility requirements will increase, with the minimum liability insurance requirements for private passenger vehicles rising to $30,000 for injury/death to one person and $60,000 for injury/death to multiple people.

If you are at fault for an accident, you are personally liable for any costs that exceed your insurance limit. Therefore, it is recommended that you purchase policies with higher limits than the state minimum if you can afford to.

Bodily injury liability insurance will cover:

• Ambulance costs
• Emergency room charges
• Doctor's bills and other medical expenses
• Hospital bills and other medical payments
• Chiropractor bills
• Physical or occupational therapy
• X-rays and MRIs
• Short- or long-term care (such as home health aides)
• Prosthetics
• Dental expenses resulting from broken teeth
• Funeral expenses

It is important to note that bodily injury liability insurance does not cover car repair bills or damage to other property, such as fences or gates. In addition to bodily injury liability insurance, California law requires a minimum of $5,000 of property damage liability insurance (also known as collision coverage).

Property damage liability coverage

In California, drivers are required to carry a minimum of $5,000 in property damage liability coverage. This type of insurance covers damage to other people's property caused by your vehicle. It is important to note that this coverage is only applicable if you are found to be at fault for the accident.

The minimum coverage may not be sufficient for all drivers. It is recommended that drivers consider their individual circumstances when deciding on the amount of coverage they need. For instance, if you own a home or other expensive items, or if you live in an area with a lot of expensive vehicles, you may want to increase your property damage liability coverage.

Additionally, it is important to remember that your insurance policy will have a limit on what will be paid if you are at fault for an accident. If the cost of damages exceeds your coverage limit, you will be responsible for the remaining cost. Therefore, it is crucial to ensure that you have adequate coverage to protect yourself financially in the event of an accident.

Furthermore, it is worth noting that California law requires all drivers to have liability insurance. This type of insurance helps pay for damages to others on your behalf if you are found to be at fault in an accident. Along with property damage liability coverage, bodily injury liability coverage is also mandatory in California.

Uninsured motorist coverage

Uninsured Motorist Bodily Injury (UMBI)

UMBI pays for injuries to you and any person in your car when there is an accident with an uninsured driver who is at fault. The limits are typically the same as your liability coverage limits:

• $15,000 for bodily injury coverage or death per person.
• $30,000 for total bodily injury or death per accident (to all people in the other vehicle combined).

However, it is recommended that your UMBI limits be the same as your bodily injury liability limits. For example, if your bodily injury liability limits are $100,000 per person and $300,000 per accident, you should select UMBI limits of $100,000 per person and $300,000 per accident.

Uninsured Motorist Property Damage (UMPD)

UMPD pays for the damage to your car from an accident with an uninsured driver who is at fault. The limit is $3,500. This only pays out if the uninsured driver is identified. You may not need UMPD if you have collision coverage.

Collision Deductible Waiver (CDW)

CDW pays for your collision deductible if your insured vehicle is damaged in an accident with an uninsured driver who is at fault.

Collision coverage

In California, drivers are required to carry a minimum level of auto insurance. This includes bodily injury liability coverage, property damage liability coverage, and uninsured motorist bodily injury and property damage coverage. Collision coverage is not mandatory in California, but it is an important type of insurance to consider.

The main benefit of collision coverage is that it provides financial protection in the event of an accident. Without it, you would have to pay out of pocket to repair or replace your vehicle if you are found at fault or if the other driver is uninsured. Collision coverage also offers peace of mind, especially if you cannot afford to pay for repairs or a replacement vehicle.

When deciding whether to choose collision coverage, consider your personal financial situation and the value of your vehicle. If your vehicle is brand new or still worth a significant amount, collision coverage can help cover expensive repairs or replacement costs. On the other hand, if you have an older car with a low value, the cost of collision coverage may outweigh the benefits.

In California, if you lease or finance your vehicle, collision coverage is typically mandatory to protect the lender's investment. However, if you own your vehicle outright, you have the option to remove collision coverage. It is important to weigh the costs and benefits before making a decision.

Medical payments coverage

Med Pay is particularly useful if you do not have health insurance or if your health insurance has high deductibles or co-pays. Even if you have good health insurance, Med Pay can be beneficial as it also covers your passengers, regardless of whether they have health insurance. Unlike many health plans, Med Pay has no limit on the types of services or providers you can use. Additionally, Med Pay is "per incident" rather than per year, so there are no yearly caps on payouts.

Med Pay policies typically start at \$1,000 and go up to \$2,000, \$5,000, \$10,000, and \$25,000. Some insurers offer even higher limits. The cost of Med Pay depends on the coverage amount you choose, with higher limits resulting in higher premiums.

It is important to note that Med Pay only covers medical and funeral expenses. It does not cover other losses typically associated with car accidents, such as vehicle repairs, lost wages, pain and suffering, or other incidental expenses. To cover these types of losses, you would need to pursue a claim against the at-fault driver's auto liability insurance or your own insurance, depending on the situation.

Frequently asked questions