Auto Insurance: California's Minimum Coverage Requirements

California requires all drivers to have auto insurance or some form of financial responsibility before driving. The state's minimum car insurance requirements include $15,000 in liability coverage for a single other driver's injury, $30,000 in coverage per accident and $5,000 in coverage for property damage. California operates under an at-fault system, so having minimum coverage car insurance is a legal necessity. This coverage ensures you can pay for damages or injuries you may cause in an accident.

California's minimum coverage requirements

California's minimum auto insurance requirements are dictated by the state's fault-based system, which means that drivers may be held financially responsible for accidents they cause. The minimum coverage limits are:

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

These minimum coverage requirements are essential for all drivers in California to carry. The liability insurance covers injuries or damage caused by the policyholder in an accident where they are at fault.

Bodily injury liability insurance covers the other party's medical expenses if the policyholder is at fault, while property damage liability insurance covers repairs to the other party's vehicle or property. It's important to note that these minimum limits may not cover all the expenses resulting from an accident, and drivers may need to pay additional costs out-of-pocket.

While California mandates minimum liability coverage, it does not legally require drivers to have collision and comprehensive insurance. However, lenders often mandate this additional coverage for leased or financed vehicles. Collision coverage pays for repairs to the policyholder's car when damaged in an accident, while comprehensive coverage is for non-collision incidents like theft, fire, or natural disasters.

California also offers optional add-on coverages, such as uninsured/underinsured motorist coverage, medical payments, and rental reimbursement, which provide additional financial protection in various scenarios.

The average cost of minimum coverage

The average cost of minimum auto insurance coverage in California varies depending on the source and the specific plan. According to MoneyGeek, the average monthly cost for state minimum coverage is $48, which equates to an annual cost of $573. In contrast, Bankrate reports that the average annual cost for state minimum coverage is $651, with a monthly cost of $54. MarketWatch, on the other hand, estimates the average monthly cost to be $50, which amounts to $600 annually. Geico offers the cheapest minimum liability coverage at an average rate of $31 per month or $373 per year.

Cheapest companies for minimum coverage

• CSAA: $131 per year and $11 per month
• AAA: $385 per year and $32 per month
• Geico: $239 per year on average, for minimum coverage for a 35-year-old driver with a clean driving record
• Wawanesa General: $1,214 per year on average, or about $101 per month
• Auto Club of SoCal: $301 per year, or about $25 per month
• Mercury: $346 per year, or about $29 per month
• Grange Insurance Association: $351 per year, or about $29 per month
• State Farm: $373 per year, or about $31 per month
• National General: $629 per year, or about $52 per month

Add-on coverages

While liability insurance is the only type of auto insurance required in California, there are several add-on coverages that drivers can include in their policies. These optional coverages can provide additional financial protection in various scenarios, such as accidents, theft, or personal injury. Here are some of the common add-on coverages available in California:

• Collision Coverage: This coverage pays for damages to your vehicle if you are involved in an accident with another car or object, regardless of who is at fault. For example, if you accidentally back into a telephone pole, collision insurance will help cover the repairs to your vehicle, after paying your deductible.
• Comprehensive Coverage: Comprehensive coverage pays for damage to your vehicle that is not caused by a collision. This includes incidents such as fire, theft, or vandalism. If someone steals expensive parts from your car, comprehensive coverage helps cover the cost of replacing them.
• Medical Payments Coverage (MedPay): This coverage pays for the reasonable and necessary medical bills of you and your passengers, regardless of who is at fault in the accident. Coverage typically comes in $1,000 increments, starting at $1,000 per person.
• Uninsured/Underinsured Motorist Coverage: This coverage protects you if you are in an accident with a driver who does not have any insurance or has insufficient coverage. It includes Uninsured Motorist Bodily Injury (UMBI) and Uninsured Motorist Property Damage (UMPD). UMBI covers medical bills, lost income, and other general damages, while UMPD covers damage to your car, up to a maximum of $3,500.
• Rental Expense Coverage: This coverage provides reimbursement for a rental vehicle while your vehicle is being repaired after a covered accident. The amount of coverage depends on the type and class of rental car needed.
• Roadside Assistance Coverage: This coverage provides assistance for various roadside services, such as jump-starts, lockout service, or flat tire changes, helping you get back on the road quickly.
• Accidental Death Coverage: This coverage offers a payout if you or a passenger dies or experiences certain injuries in a car accident.
• Classic Car Insurance: This coverage provides agreed-upon values for vintage or collector cars, tailored to their unique characteristics.

Penalties for driving without insurance

In California, driving without insurance is considered an infraction and is punishable by law. The penalties for driving without insurance vary depending on whether it is a first-time or repeat offense, but they can range from fines, towing of the vehicle, suspension of the driver's license, and even jail time.

For a first-time offense, drivers can expect to pay a fine ranging from $100 to $200, plus penalty assessment fees, which can bring the total cost to around $400 or even $450. The court may also impound the vehicle.

The penalties increase for a second offense, with fines ranging from $200 to $500, and penalty assessments rising to between $520 and $1,300. This brings the total cost to between $1,020 and $1,800, which is close to the average annual cost of car insurance in California.

Repeat offenders may also face more severe penalties, such as vehicle impoundment and suspension of driving privileges for up to four years. Additionally, the cost of auto insurance is likely to increase significantly after a lapse in coverage.

If a driver is involved in an accident while uninsured, the penalties can be even more serious. The state may suspend the driver's license for one year and impose a fine of up to $200 for a first offense and up to $500 for subsequent offenses. The driver will also be responsible for any towing and storage fees, and their vehicle may be impounded.

To avoid these penalties, it is important for drivers in California to maintain the minimum required auto insurance, which includes bodily injury liability coverage of $15,000 per person and $30,000 per accident, as well as property damage liability coverage of $5,000 per accident.

Frequently asked questions