This article explains key California laws related to car insurance, and how those laws work in the context of a car accident insurance claim or injury lawsuit. We’ll take a look at California’s status as a “fault” car insurance state, and the kinds of car insurance coverage required for vehicles under California law. If you’re looking for more general information on the legal rules related to auto accidents in California, you’ll find it in our companion article Car Accident Laws in California. Otherwise, read on for details on auto insurance laws in California.
California is a “Fault” Car Insurance State
California follows a “fault” system when it comes to car insurance and the kinds of remedies available after a car accident. Basically, there are very few restrictions on the options of anyone injured in an accident, when it comes to pursuing an insurance claim or lawsuit against those who are legally at fault. After a car accident in California, if you’ve suffered an injury as a driver, passenger, or pedestrian, you are usually free to take one or more of the following actions in trying to get compensation for your losses (medical bills, lost income, property damage, etc.):
- file a claim under your own insurance policy
- pursue a claim through the at-fault driver’s insurance company, or
- file a personal injury lawsuit against the at-fault driver directly
Note: In a no-fault car insurance state, a driver who has been injured in an accident must turn to his or her own car insurance company for payment of things like medical bills and lost income, regardless of who was at fault for the accident. Remedies against the at-fault driver (or their insurer) are limited, but are possible if certain thresholds are met. California drivers don’t need to worry about these no-fault rules, but if you want to learn more, see No-Fault Car Insurance and State Laws: The Basics.
Minimum Car Insurance Requirements in California
California law requires liability insurance coverage -- at or above certain minimum dollar amounts -- for any motor vehicle in operation in the state. This liability insurance is meant to compensate other drivers or passengers for property damage or personal injuries in case an accident occurs. The minimum amounts of coverage required under California law are:
- $15,000 for injury or death to one person (another driver, passenger, pedestrian, etc.).
- $30,000 for injury or death to more than one person, and
- $5,000 for damage to property.
Remember, this is the minimum amount of liability coverage required under California law. You can (and in some cases probably should) carry more coverage. One justification for carrying more coverage than is required by state law is that if you’re at fault for an accident, your insurance will only cover you up to the maximum of your policy. Once the limits of your policy are exhausted, you’ll be left personally on the hook for the remainder of the damages.
Complying with California’s “Financial Responsibility” Requirement
To meet California's minimum insurance requirements listed above, the overwhelming majority of car owners in California will purchase a car insurance policy that provides liability coverage equal to or exceeding the minimum requirements. But California does allow vehicle owners to choose from a few other methods of complying with the state’s financial responsibility laws. Instead of purchasing a qualifying insurance policy, vehicle owners can:
- make a cash deposit of $35,000 with the California DMV
- get a self-insurance certificate from the California DMV, or
- get a $35,000 surety bond from an issuer that is licensed to do business in California.
Uninsured/Underinsured Coverage Not Required in California
California does not require drivers to carry uninsured motorist insurance or underinsured motorist coverage, but it’s a good idea to learn more about these coverage options and the kinds of protection they provide. Read Uninsured Motorist Coverage: The Basics and Underinsured Motorist Coverage: How It Works to learn more.
Getting More Information
For more information on car insurance in California, straight from the state government, see Insurance Requirements for Vehicle Registration from the California Department of Motor Vehicles.