Auto Insurance In California: How Much Coverage Is Enough?

California requires drivers to carry a minimum amount of car insurance, and it is a pure comparative negligence state, meaning that if you are found to be at least 1% at fault for an accident, you could be responsible for paying some or all of the medical and car repair bills for anyone else involved. The minimum coverage in California includes $15,000 for bodily injury liability per person, $30,000 per accident, and $5,000 for property damage liability. However, this minimum coverage may not be enough to fully protect you in the event of a serious accident, and it is recommended to purchase additional types of insurance and higher coverage limits if you can afford it.

Liability coverage

Property Damage Coverage

Property damage coverage insures against damage to another person's property caused by your vehicle. This includes repairs to the other driver's vehicle, the cost of a rental vehicle while the other person's car is being repaired, and damage to buildings, fences, or other structures and personal property. It also covers legal fees if you're sued for property damage and other related costs.

Bodily Injury Coverage

Bodily injury coverage provides payment for injuries sustained by others in an accident caused by you. This can include legal fees if you're sued for injuries you caused. It is important to note that states may have different requirements for who can file a bodily injury claim.

Minimum Liability Coverage in California

The minimum liability insurance requirements in California are as follows:

• $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 requirements will increase effective January 1, 2025:

• $30,000 for injury/death to one person
• $60,000 for injury/death to more than one person
• $15,000 for damage to property

Customizing Your Liability Coverage

The amount of liability coverage you need depends on your individual circumstances. While the minimum coverage is required to drive legally, it may not be sufficient to fully protect you financially in the event of an accident. It is generally recommended to get as much coverage as you can afford, especially if you have significant assets.

Most financial experts suggest raising your liability coverage limits to $50,000 per person and $100,000 per accident if you have limited assets. If you have more substantial assets, such as a house, expensive car, or substantial savings, experts recommend increasing your coverage to at least $100,000 per person and $300,000 per accident.

Collision coverage

Unlike liability insurance, collision coverage is not usually required unless you're leasing a car or paying off a loan on a vehicle. However, it may be good to have collision coverage if you're in an accident with an at-fault driver who doesn't have enough property damage insurance or if you're hit by an uninsured or underinsured motorist. In these cases, collision coverage can help pay for the repairs to your vehicle, after paying your deductible.

Your coverage limit is the value of your car, and the maximum amount your insurance company will pay is the actual cash value of your car at the time of the accident. If you total a used car, you'll receive a total loss settlement that will go toward replacing your car.

While collision coverage is optional for those who own their cars outright, it's important to remember that if you don't have it and you're in an accident, you could be stuck paying thousands of dollars out of pocket to repair or replace your vehicle. The national average collision claim was $4,601, according to the National Association of Insurance Commissioners (NAIC).

Additionally, if you have a car loan or lease, your lender or leasing company will most likely require you to have collision insurance to protect their financial investment.

Comprehensive coverage

• Vandalism, fire, and explosions
• Windshield and glass damage
• Falling trees, limbs, and other objects
• Rocks and objects kicked up by or falling off cars
• Storms, hail, wind, floods, lightning, and earthquakes
• Accidents with animals (e.g. hitting a deer)

The maximum coverage limit is typically based on the actual cash value of your car at the time of the accident. Comprehensive coverage is usually required if you lease or finance your car. If you own your vehicle outright, you can decide whether it's worthwhile.

When deciding whether to get comprehensive coverage, consider the value of your car, your personal preferences, and your financial circumstances. If your car has a high cash value or you can't afford to repair or replace your vehicle out of pocket, comprehensive coverage could be a smart move. It will give you peace of mind that you're covered no matter what unexpected events come your way.

Medical payments coverage

MedPay is particularly useful if you don't have health insurance or if your health insurance has high deductibles or co-pays. Even if you have good health insurance, MedPay covers your passengers' medical expenses, regardless of whether they have health insurance. Unlike many health plans, MedPay has no limit on the types of services or providers you can use.

MedPay coverage is sold in California with a minimum coverage of $1,000 for each person injured and typical coverage amounts of $2,000, $5,000, $10,000, and $25,000. Some large insurers offer MedPay coverage of up to $100,000. The amount of coverage you choose will depend on your budget and other types of insurance you have.

MedPay is also useful because it pays out automatically without requiring you to prove who caused the accident. Payments are sent directly to the doctor, hospital, or healthcare provider, so you don't have to pay out of pocket and wait for reimbursement. There are no deductibles or co-pays with MedPay, so all your costs are covered in full.

MedPay also covers you and your family members if you are injured while a passenger in someone else's car, injured while taking public transportation, or injured by a vehicle as a pedestrian.

Uninsured motorist coverage

In California, uninsured motorist coverage is not mandatory, but it is a good idea to have it. This is because if you are in an accident with an uninsured or underinsured driver, you could be responsible for paying any medical bills or vehicle repairs out of your own pocket. Uninsured motorist coverage can help to protect you from these potentially high costs.

There are two types of uninsured motorist coverage:

• Uninsured Motorist Bodily Injury (UMBI): This type of coverage pays for injuries to you and any other passengers in your car when there is an accident with an uninsured or underinsured driver at fault. It covers medical bills and may also cover lost income or other general damages. It is recommended that your UMBI limits match 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 consider selecting UMBI limits of $100,000 per person and $300,000 per accident.
• Uninsured Motorist Property Damage (UMPD): UMPD covers damage to your car caused by an uninsured driver, up to a maximum of $3,500. This coverage is not recommended for more expensive cars but could be a cost-saving alternative for older, lower-value vehicles.

In addition to the above, there is also the Uninsured Motorist Collision Deductible Waiver (UMC). This coverage waives your collision deductible if the accident is caused by an identified and uninsured motorist.

When deciding on your level of uninsured motorist coverage, it is important to consider your own financial situation and the value of your vehicle. You should also check if your health insurance covers injuries sustained in an auto accident, as this may overlap with UMBI coverage.

Frequently asked questions