California Auto Insurance Requirements

California's "financial responsibility" laws for vehicle owners, minimum liability car insurance requirements in California, and more.

By , J.D.

After any kind of traffic accident in California, car insurance is sure to play a pivotal role. Here's what to know right off the bat:

  • California is a "fault" state when it comes to legal responsibility for a vehicle accident—in plain English, that means the driver or other individual who caused the crash is on the financial hook for all resulting injuries and damages.
  • While car insurance is not technically required under California law, vehicle owners are required to show "financial responsibility" in case they cause a car accident, and the overwhelming majority of vehicle owners comply with this rule by purchasing liability car insurance.
  • After a car accident in California, you usually have the option of filing an insurance claim or even a lawsuit against the at-fault driver to get compensation for your injuries, vehicle damage, and other losses. But from a practical standpoint, the amount of compensation you can receive typically tracks with available insurance coverage (the other driver's and your own).

That's a snapshot of the car insurance picture in California. Read on for the details.

California Is a "Fault" Car Insurance/Car Accident State

Like the majority of states, California follows a "fault" system when it comes to car insurance and the kinds of remedies available after a car accident. There are very few restrictions on the options of anyone who suffers losses in an accident—driver, passenger, pedestrian, bicyclist, and so on—when it comes to taking action against those who are legally at fault.

Specifically, in order to get compensation for medical bills, lost income, vehicle damage, "pain and suffering," and other impacts of an accident in California (known collectively as "damages" in the language of the law), you may be able to:

  • file a claim under your own insurance policy
  • pursue a "third party" claim through the insurance company of one or more at-fault drivers, or
  • file a personal injury lawsuit directly against one or more at-fault drivers.

Your best path forward when it comes to recovering for your losses after a car accident typically depends on the (sometimes complex) insurance coverage picture.

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 when it comes to accidents occurring in the state.

"Financial Responsibility" and Car Insurance Requirements In California

California vehicle owners are required to show "financial responsibility" for a potential accident in order to register, drive, or even park a vehicle on the streets or roads in California. There are four ways to comply with the state's financial responsibility laws:

  • buy liability car insurance that meets minimum requirements under the California Insurance Code
  • 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.

If you're interested in learning more about the latter three options, the California DMV offers a bit more guidance:

  • for details on cash deposits and self-insurance, call the DMV's Financial Responsibility Unit at (916) 657-6520.
  • To find a company that's qualified to issue a surety bond, visit the state's Department of Insurance online or call 1-800-927-4357.

Minimum Car Insurance Requirements In California

Most California vehicle owners comply with the state's financial responsibility rules by purchasing liability car insurance coverage. Liability insurance kicks in to compensate other people (drivers, passengers, pedestrians, bicyclists) who suffer losses (injuries, property damage) in a car accident caused by the policyholder. It won't cover the policyholder's own medical bills, vehicle damage, or other losses (you can purchase additional insurance to cover you and your vehicle; details below).

The minimum amounts of liability insurance coverage required under California law are:

  • $15,000 in liability coverage per person whose injury or death results from an accident caused by the policyholder.
  • $30,000 total liability coverage for all injuries or deaths resulting from an accident caused by the policyholder, and
  • $5,000 for vehicle damage and other property loss resulting from an accident caused by the policyholder.

Keep in mind that these are the minimum amounts of liability car insurance coverage required in California. You can (and in some cases probably should) carry more liability coverage. Why? If you're at fault for an accident, once the limits of your liability policy are exhausted, you'll be left personally on the hook for the remainder of the injured parties' losses. That means you could face a personal injury lawsuit filed by anyone else injured in the crash, and with no insurance coverage left to insulate you financially, you might face a hefty court judgment.

You might also consider adding a number of different optional insurance coverages to your policy.

Optional Car Insurance Coverage In California

Simply meeting California's required car insurance minimums won't protect you in every conceivable car accident scenario. First, remember that liability insurance won't cover your own losses (injuries, vehicle damage) resulting from an accident you caused. And if the driver who caused the accident doesn't have insurance, or if their coverage isn't enough to compensate you for your losses, you'll need to find a way to make up the difference. So when you're tailoring your policy, it's always a good idea to consider the optional or "add-on" coverage offered by most car insurance companies. Here's a look at a few of the most common:

  • Collision coverage pays for the repair or replacement of your vehicle after an accident, regardless of who caused the crash (but you'll usually need to pay the deductible).
  • Comprehensive coverage pays for repair or total loss of your vehicle in non-accident scenarios, i.e. theft, fire, or damage from a fallen tree.
  • "Personal injury protection" (PIP) and "medical payments" coverage (or "MedPay") can be used to pay medical bills and certain other out-of-pocket losses after a car accident, for the policyholder, certain family members, and other covered individuals. Keep in mind that, depending on the fine print of your policy, these kinds of coverages may work in conjunction with any health insurance you have when it comes to payment for medical treatment.
  • Filing a claim under your uninsured motorist coverage or underinsured motorist coverage can help pay for your accident-related losses when the driver who caused the accident has no (or insufficient) insurance. We'll dive deeper into UIM in the next section.

Get the details on these options—and figure out which car insurance coverage might be right for you.

If You're Hit by an Uninsured/Underinsured Driver In California

Even though driving without insurance (and without any alternative form of financial responsibility) is against the law in California, a number of vehicle owners still make the choice to go without coverage.

California does not require drivers to carry uninsured motorist insurance or underinsured motorist coverage. Uninsured motorist (UIM) coverage must be offered to customers by insurance companies, but it's "waivable" by the policy purchaser (you're free to decline it, in other words). But especially if you end up getting seriously injured by an at-fault driver who also happens to be uninsured, UIM will likely offer your only path to compensation, not just for medical treatment and lost wages, but also for non-economic impacts like your "pain and suffering" associated with the accident and your injuries. So it's a good idea to learn more about uninsured and underinsured motorist coverage options and the kinds of protection they can provide.

As mentioned above, you can use your own collision coverage (optional in California) to get your car fixed or replaced after a car accident, no matter who caused the crash. So, if you're hit by an uninsured driver, collision coverage will get you compensated for vehicle damage. And under a rule sometimes known as the "California Deductible Waiver," when you're hit by an uninsured driver and make a claim under your own collision coverage, your carrier might not require you to pay the deductible.

Getting Help After a California Car Accident

For more information on car insurance in California, straight from the state government, check out the Insurance Requirements Guide from the California Department of Motor Vehicles.

And if you're facing a challenge trying to sort out the car insurance coverage picture after a California car accident, or you're wondering about your options after a crash with an uninsured driver, you may want to discuss your situation with a lawyer. You can use the chat and contact tools right on this page to connect with a nearby car accident lawyer, and read our guide to hiring and working with a car accident lawyer.

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