Auto insurance is a legal requirement for all drivers in California, designed to protect both the drivers and other parties involved in an accident. The state of California sets minimum insurance coverage limits that drivers must maintain to be compliant with state law.
Minimum insurance in California ensures that drivers have the financial means to cover damages or injuries resulting from an accident, whether they’re at fault or not. If you have been injured due to another’s negligence, you should seek legal services from an experienced personal injury lawyer to recover compensation.
The Minimum Auto Insurance Requirements in CA
As of January 1, 2025, California has updated its minimum liability limits for auto insurance to better reflect current economic conditions and the rising costs of vehicle repairs and medical expenses. These changes are outlined in Senate Bill 1107 and amend California Insurance Code §11580.1b.
The law requires drivers to maintain the following minimum insurance in California:
- $30,000 for bodily injury or death to one person in an accident
- $60,000 for bodily injury or death to two or more people in an accident
- $15,000 for property damage in an accident
These updated minimum limits replace the previous minimums of $15,000/$30,000/$5,000, commonly referred to as “15/30/5.” The new limits—”30/60/15”—are designed to provide more adequate coverage in light of increased vehicle repair costs and medical expenses.
What Does the Minimum California Auto Insurance Coverage Include?
Bodily Injury Liability
Bodily injury liability insurance covers the cost of medical bills, rehabilitation, lost wages, and other expenses for any person who is injured in an accident where the insured driver is at fault.
In other words, if you were to purchase an an automobile coverage policy of insurance with Bodily Injury Liability Coverage, and if a claim was made against you, that type of coverage would only provide you with a legal defense (at your insurance company’s expense), and they would be required to pay for the claim In an amount up to your policy’s bodily injury liability policy limit.
This also includes the cost of any legal fees if the other party files a lawsuit. New minimum limits:
- $30,000 covers injury or death to one person
- $60,000 covers injury or death to multiple people
The $30,000/$60,000 terminology means that the most the insurance company will pay on a given loss is $30,000 per person, and $60,000 for the entire incident, regardless of how many persons make a claim against the policy of insurance. If there is only one claimant, the most the insurance company will pay for that claim Is $30,000.
Of course, the claimant will have to prove that the claim has a value of $30,000 or more in order to persuade the insurance company to pay the $30,000 policy limit. If there are two claimants, the most any one claimant can collect from the insurer is $30,000, and the most that the insurer will pay the two claimants is $60,000, combined. No problem.
However, If there are three claimants or more, conflicts can arise between the claimants, because the most that the insurer will pay any one claimant is $30,000, yet all claimants together cannot collect more than $60,000 from the insurance company. With three claimants, If one of them has a $30,000 claim, then the other two claimants will have to divide the remaining available $30,000 under that policy.
Property Damage Liability
Property damage liability coverage will cover the cost of repairing or replacing property that’s damaged in an accident caused by the insured driver. This could include damage to another person’s car, fences, buildings, or any other type of property.
- The minimum requirements for property damage are $15,000
Additional Types of Coverage to Consider
While California insurance law requires only the minimum auto insurance coverage, drivers can choose to purchase additional types of insurance to provide more comprehensive financial protection. You may also negotiate auto insurance discounts with the provider of your insurance policy. Depending on your personal financial profile and ability to afford insurance, it may be advisable to purchase automobile insurance with bodily injury liability policy limits greater than the minimum statutory requirements.
For example, if you have equity in a home, are gainfully employed, have assets, etc., they may be at risk if you are found to be legally liable for the damages of another and you have inadequate insurance. If your injury policy limit is $30,000.00 (meeting the required minimum amount), you cause a serious injury accident, and a lawsuit is filed against you, your insurance company will defend you (by paying legal fees and expenses), however, they will be obligated to pay only up to the policy limit of $30,000.00.
If a judgment is rendered for more than $30,000.00, the judgment debtor will be personally liable for the excess judgment amount. To avoid that potential dilemma, some people opt to purchase an “umbrella policy” of insurance. Some automobile insurance carriers provide bodily injury liability policy limits of $100,000/$300,000 as their maximum available coverage for liability.
Certain individuals are of the opinion that for their Individual needs, those policy limits are inadequate. They may choose to purchase an additional layer of liability insurance, often referred to as umbrella coverage. That can increase the policy limits above those of the first layer of the automobile insurance ($100,000/$300,000), with enhanced umbrella policy limits of $1 million, up to $5 million, or possibly more, depending on the insurer and the circumstances.
When shopping for umbrella insurance coverage, It is important to note that the policyholder should not assume that, just because the liability policy limits have been increased, that the uninsured motorist/underinsured motorist policy limits will automatically be increased as well under the umbrella policy of insurance. The policyholder should investigate and obtain clarification of that issue, In writing.
Uninsured/Underinsured Motorist Coverage
Uninsured motorist (UM) coverage is a separate type of coverage which is crucial in cases where the driver at fault doesn’t have any insurance or doesn’t have sufficient coverage to pay for damages. In that case, the policy holder’s liability insurance coverage does not provide any benefit.
Where an uninsured motorist causes the accident and injuries result therefrom, the insured driver who was not at fault may make a claim against his own insurance company pursuant to the uninsured motorist provisions of their policy of insurance. In that event, the insurer will be obligated to the policyholder all amounts, up to the UM policy limits, which the uninsured at fault driver would otherwise be legally obligated for.
Thereafter, your insurance company may have a right of subrogation, wherein they could make a claim against the uninsured motorist and, although it may not be collectible, that judgment would stick to the uninsured motorist, with the legal consequences attributable to having a judgment against them. A policy holder’s UM claim is not adjudicated in court, yet instead is to be resolved by way of Arbitration.
Insurance Code Section 11580.2 sets forth many of the terms and conditions for uninsured motorist claims, including the arbitration process. While the outcome of that arbitration may be binding, the formal and statutory rules of evidence are followed in the Arbitration hearing, to an extent, The introduction of documentary evidence may be relaxed when compared to the rules for doing so in a court of law.
For example, if prerequisites are met, medical records and bills may be Introduced into evidence, where they will be considered part of the case and be evaluated by the arbitrator In his ruling on the value of the case, which takes the form of an
Arbitration Award.
While the rules of evidence may be somewhat relaxed when it comes to the introduction of documentary evidence at arbitration, the introduction of oral testimony by the parties, by percipient witnesses, and even by expert witnesses will usually follow the same level of Evidence Code based formality and decorum as that in a court of law. For example, the litigants will be entitled to direct examination and cross examination of witnesses, as well as the use of Demonstrative Evidence.
It should be noted that, from a somewhat philosophical standpoint, the relationship between the insurer and the claimant in an UM claim creates an anomaly In the law. The policyholder, who has been loyally paying their insurance policy premiums on time, and is a member of the insurance company’s “family”, is put in a position where their own insurance company is now their adversary who is making every effort to deprive the claimant of insurance benefits they thought they were getting by buying this type of coverage.
Underinsured motorist (UIM) coverage protects you when the at-fault driver’s insurance coverage is insufficient. An example would be the case where the policyholder has Uninsured Motorist coverage with a policy limit of $100,000, their injuries resulting from the accident have a value of $200,000, and the at-fault driver has a bodily injury liability policy limit of $30,000.
By definition, the at fault driver Is Underinsured. In that case, by operation of California law, Including California Insurance Code Section 11580.2, coupled with the Uninsured/Underinsured Motorist provisions of the policy of insurance, UM coverage converts into UIM coverage. After they collect the $30,000 policy limit from the at fault party, the claimant may present a UIM claim with their own insurer, and the same adversarial relationship (as seen in a pure UM case) is created.
Although the value of the claim is well over the $100,000 UM/UIM policy limit the insurer Is obligated to pay up to the policy limit of $100,000. In that context, the insurer is entitled to an offset for the amount paid by the at fault third party’s insurance company, resulting in the UIM claimant’s insurer’s total obligation In the sum of $70,000. California doesn’t require this type of coverage, but it’s recommended to provide added financial security.
Comprehensive Coverage
Comprehensive insurance covers damages to your vehicle caused by non-collision incidents, such as theft, vandalism, natural disasters, or hitting an animal. This coverage is optional under California law but may be required by lenders or leasing companies if you’re financing or leasing a vehicle. Because this is a “First-Party” claim, your deductible will affect your benefits for this type of claim.
Collision Coverage
Collision coverage pays for damages to your car resulting from a collision, no matter which party is at fault. While this type of coverage has the benefit of not being required to prove fault to your insurance company (because even if the damage was your fault your collision coverage will still provide insurance benefits to you), you will be required to pay your deductible.
By way of example, if your collision coverage carries a $1,000 deductible, and the damage to your car costs $5,000 to repair, your insurance company will pay only $4,000, and you will be required to pay the remaining $1,000 for these repairs. That is in sharp contrast to a liability claim (which you would make against the other driver’s insurance company) for your property damage.
In that scenario, assuming you are able to prove that the other driver was at fault for the collision, and their insurance company has accepted liability, they will pay the full cost of your repairs up to their property damage liability policy limit, with no deduction for a deductible.
Similar to comprehensive coverage, collision coverage isn’t a required insurance in California by law but may be a smart choice if you want protection for your own vehicles (including recreational vehicles) in the event of an accident.
Financial Responsibility and Proof of Insurance
In California, drivers are required to provide proof of insurance when requested by law enforcement officers. This may be in the form of a physical insurance card, digital proof of insurance, or an electronic verification from the insurance company. Failure to show proof of insurance can result in fines, license suspension, and even vehicle impoundment.
Consequences of Not Meeting the Minimum Insurance Requirements
Drivers who don’t meet the minimum auto insurance requirements according to the new law in California may face serious legal consequences. These include:
- Fines
- License suspension
- Financial responsibility after an accident
- Vehicle impoundment
Get Strong Legal Representation from Our California Personal Injury Lawyers
At The Law Offices of Rosenstock and Azran, we bring over 82 years of experience in personal injury law along with proven litigation techniques and client-focused strategies. Our 5-star rated team has a formidable record of multi-million dollar settlements and verdicts, and a 99.99% success rate. As one of California’s oldest personal injury law firms, we have the skills, experience, and resources to fight for the highest possible compensation for you. To schedule your free consultation, call us at (818) 805 0422 or contact us online.