Published: April 18, 2022Updated: July 13, 2022

What Is the Minimum Car Insurance Requirement in California?

California drivers only need liability coverage, but are the minimum insurance requirements enough?

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California’s minimum auto insurance coverage is liability insurance coverage, which breaks down into bodily injury coverage and property damage coverage. Both of these coverages apply to other parties’ injuries or property damages in accidents you caused. Your insurance would pay for their injuries and damages, not your injuries or damages.

It’s essential that you drive when you live in California. However, before you drive down the Pacific Coast Highway, make sure that you have the minimum amount of car insurance coverage required for the state. Otherwise, you would face fees and a possible impoundment of your vehicle. Learn about the car insurance laws that dictate the types of coverage you’ll need.

What Is the California Minimum Car Insurance?

Here are the liability limits that are required by law:

  • Bodily injury coverage: $15,000 per person; $30,000 per accident
  • Property damage coverage: $5,0001

How Much Coverage Do You Need?

We recommend obtaining more insurance coverage than the minimum if it’s affordable.

Is Minimum Coverage Enough?

One of the most frequent car insurance questions we get is, “Is the minimum coverage enough?” In California, the answer is no. Liability coverage only applies to the other party’s damages and injuries.

Consequently, you’d be responsible for paying these costs out of pocket for at-fault accidents. Plus, the liability limits are pretty low — at only $50,000 total. If you’ve ever visited a hospital or a car repair shop, you know the costs can easily exceed that amount.

We recommend obtaining $500,000 of both bodily injury and property damage coverage, plus full coverage.

Other Types of Auto Insurance Coverage

Full coverage includes medical payments coverage, collision coverage, and comprehensive coverage. We also recommend uninsured motorist coverage.

  • Medical payments coverage: If you cause an accident, medical payments coverage would pay for your medical bills.
  • Collision coverage: Collision coverage would pay for your damages if you get into an at-fault collision.
  • Comprehensive coverage: Comprehensive coverage would pay for damages caused by events other than collisions, including car theft, vandalism, and any weather-related events like flooding or wildfires. Learn more about the differences between collision and comprehensive coverage.
  • Uninsured motorist coverage: If you get into an accident with someone who lacks insurance, uninsured motorist coverage would cover the costs of your injuries and damages.

DID YOU KNOW?

Despite the legal requirement and low-cost programs, the Insurance Research Council estimates that 17 percent of California drivers do not have insurance — 25 percent more than the national average.2

Proof of Insurance

You’ll need to carry proof of insurance in either paper or electronic form whenever you’re driving.

Companies That Electronically Report to the DMV

In California, all insurance companies are required to electronically report your car insurance to the DMV.

What Happens if You Don’t Have Proof of Insurance?

If you are caught driving without insurance, you could face legal consequences.

  • First offense: $100-$200 fine, penalty assessments, and possible court-ordered vehicle impoundment
  • Second and subsequent offenses within three years of the first offense: $200-$500 fine, penalty assessments, and possible court-ordered vehicle impoundment3

The Cost of Car Insurance in California

Many people wonder why car insurance in California is so expensive, but it’s actually 2 percent cheaper than car insurance in the rest of the U.S. In 2019, the last year the National Association of Insurance Commissioners published data, the average Californian spent $1,051.79 on insurance a year, which breaks down into these coverages:

  • Liability: $627.77
  • Collision: $495.18
  • Comprehensive: $96.53

Compared to the national average of $1,070.47, the cost of car insurance in California is slightly lower.4 However, you could pay anywhere from $390 for minimum coverage all the way up to $7,152 for 16-year-old drivers.

How to Lower the Cost of Car Insurance in California

Here are a few ways to acquire cheap car insurance in California:

  1. Join the California Low Cost Automobile (CLCA) Insurance Program. The CLCA provides affordable insurance for eligible applicants. You must meet these requirements to be eligible:
    • Carry a valid California driver’s license.
    • Own a vehicle that costs a maximum of $25,000.
    • Be at least 16 years old.
    • Hold a good driving record.
    • Meet the income eligibility requirements.
Number of people in household Maximum household income
1 $33,975
2 $45,775
3 $57,575
4 $69,375
5 $81,175
6 $92,975
7 $104,775
8 $116,575
9 $128,375
10 $140,175
11 $151,975
12 $163,775
13 $175,575
14 $187,375
15 $199,175
16 $210,975
17 $222,775
18 $234,575
19 $246,375
20 $258,175

To sign up, you’ll need proof of the following:

  • Valid driver’s license
  • Current vehicle registration
  • Initial deposit
  • One of these documents:
Program Document
CalFresh (food stamps) Electronic Benefit Transfer (EBT) card
California LifeLine Utility company LifeLine verification
CalWorks (welfare) Notification letter
Income level Federal or state income tax returns

W-2 form

1099 form

Payroll stub

Social Security or tax identification number

LIHEAP (low-income home energy assistance) LIHEAP verification
Medi-Cal/Medicaid Medi-Cal card
Social Security or pension Social Security or pension letter
SSI (aged, blind, disabled) SSI verification
EDD (State of California Employment Development Department debit card or benefit) EDD debit card or benefit letter

You can sign up in various ways.

    • Phone: Call 866-602-8861.
    • Local agent: Visit https://www.mylowcostauto.com/find-an-agent, then enter your ZIP code to get connected with a local agent.
    • Online form: Fill out the eligibility form at https://www.mylowcostauto.com/eligibility-questionnaire.5
  1. Utilize discounts. Not everyone is eligible for CLCA, so also ask your insurance agent if you’re eligible for any discounts. You could easily qualify for at least one discount, such as for being a good driver, a good student, or enrolling in automatic payments.
  2. Bundle your policies. If you have multiple insurance types, bundle your policies under one provider to get a multi-policy discount.
  3. Raise your deductible. Increase your deductible to lower your premiums if the new deductible would still be affordable for you.
  4. Lower your limits. Lowering your limits will also lower your premiums, though out-of-pocket expenses may be higher for damages or injuries.
  5. Drop coverages. Finally, you can always drop optional coverages — such as collision coverage for a car that doesn’t run or comprehensive coverage for an older vehicle.

How to Obtain Car Insurance in California

It takes just a few steps to get car insurance:

  1. Choose your coverages.
  2. Acquire quotes from multiple companies.
  3. Talk to an agent and personalize your policy.
  4. Apply.
  5. Pay your premium to begin coverage.

California Driving Laws

Congratulations! You have car insurance. But before you drive, it’s important to brush up on the state’s laws.

New California Residents

  • Deductible waiver: Some California insurance providers, such as CSAA Insurance Exchange and Aspire General Insurance, will waive your collision deductible if you were involved in an accident that an uninsured driver caused.6 Ask your agent for more information on a collision deductible waiver.
  • Registration information: To register a car in California, you need insurance. Otherwise, the DMV will suspend your registration, preventing you from driving or even parking on public roadways until you submit proof. You have to visit a DMV in person if you purchased your vehicle from a dealer. You’ll need to submit these applicable forms to the DMV personnel:
    Form URL
    Application for Title or Registration https://
    www.dmv.ca.gov/
    portal/file/
    application-for-title-
    or-registration-reg-343-pdf/
    Application for Replacement or Transfer of Title (if title has been lost or damaged) https://www.
    dmv.ca.gov/portal/
    file/reg-227-pdf/
    Vehicle Vessel Transfer and Reassignment form Must be obtained in person
    Statement of Facts https://www.dmv.ca.gov/
    portal/file/statement-of-
    facts-reg-256-pdf/
    Vehicle Emission System Statement (SMOG) https://www.dmv.ca.gov/
    portal/file/vehicle-
    emission-system-statement
    -smog-reg-139-pdf/
    Declaration of Gross Vehicle Weight (GVW) or Combined Gross Vehicle Weight (CGW) https://www.dmv
    .ca.gov/portal/file/
    declaration-of-gross-
    vehicle-weight-gvw-combined-
    gross-vehicle-weight-
    cgw-reg-4008-pdf/

    Plan to pay application title transfer fees, use tax, and other fees that vary by vehicle type, purchase price, and county of residence. Calculate your fees on the California DMV website: https://www.dmv.ca.gov/portal/vehicle-registration/registration-fees/.

  • Intent to Suspend Registration letter: Did you forget to renew your registration? If so, you may have received an Intent to Suspend Registration letter in the mail. You can renew your registration online at https://www.dmv.ca.gov/wasapp/cisa/index.html. You’ll need these items:
    • Insurance documents
    • Payment method for $14 reinstatement fee (credit card, debit card, or bank account)
    • License plate number
    • Last five digits of either your vehicle identification number or the personal identification number listed on the letter

TIP

When you pay the reinstatement fee to renew your registration online, avoid additional processing fees by paying directly from a bank account.

Fault State

California has an at-fault insurance system, which means that in an accident, the at-fault party is responsible for the other party’s property damages and bodily injuries. Since California has pure comparative negligence laws, victims can recover money for injuries no matter how negligent they were in the accident.

Self-Insurance

Purchasing a personal car insurance policy is one way to satisfy the state’s financial responsibility laws. Here are two other options:

  1. Deposit $35,000 with the DMV to receive a self-insurance certificate.
  2. Attain a surety bond for $35,000 from a company licensed to conduct business in California.

If you don’t have $35,000 readily available, it’s best to purchase a standard car insurance policy.

Credit Score

If you have poor credit, does that mean higher insurance rates? In California, the answer is no because of Proposition 103, which was passed in 1988. Companies are legally barred from taking credit scores into account when determining car insurance prices, so you won’t be penalized for having bad credit.

Motor Vehicle Theft Rates

California is third in the nation when it comes to rates of motor vehicle theft. In 2019, there were 428 thefts per 100,000 inhabitants — 42 percent higher than the national average of 246.7 In the state’s cities, car theft is even more common.

Worst Cities in California for Car Theft

Bakersfield is not only the worst city in California for car theft, but the worst in the nation, with 905 thefts per 100,000 inhabitants. That’s 75 percent higher than the average U.S. metropolitan statistical area. In general, car theft rates are higher in cities than in suburban or rural areas.

Metropolitan statistical area in California Rate of motor vehicle theft per 100,000 inhabitants in 2020
Bakersfield 905
Yuba City 724
San Francisco – Oakland – Berkeley 655
San Jose – Sunnyvale – Santa Clara 551
Vallejo 529
Riverside – San Bernardino – Ontario 498
Modesto 493
Los Angeles – Long Beach – Anaheim 482
Merced 473
Visalia 446
Fresno 440
Stockton 4398

Recap

California offers a low-cost car insurance alternative for low-income households — a helpful program that most states don’t offer. You can still acquire cheap car insurance, as California’s car insurance rates aren’t particularly high compared to the rest of the country.

Citations

  1. INSURANCE REQUIREMENTS. California Department of Motor Vehicles. (2022).
    https://www.dmv.ca.gov/portal/vehicle-registration/insurance-requirements/

  2. One in Eight Drivers Uninsured. Insurance Research Council. (2021, Mar 22).
    https://www.insurance-research.org/sites/default/files/downloads/UM%20NR%20032221.pdf

  3. Penalties for Driving without Auto Insurance by State. Consumer Federation of America. (2014, Jan).
    https://consumerfed.org/pdfs/140310_penaltiesfordrivingwithoutautoinsurance_cfa.pdf

  4. 2018/2019 Auto Insurance Database Report. National Association of Insurance Commissioners. (2022).
    https://content.naic.org/sites/default/files/publication-aut-pb-auto-insurance-database.pdf

  5. California’s Low Cost Auto Insurance. California Department of Insurance. (2019).
    https://www.mylowcostauto.com/

  6. California Car Insurance: Auto Insurance Coverage in California. GEICO. (2022).
    https://www.geico.com/information/states/ca/

  7. 2019 Crime in the United States. Federal Bureau of Investigation. (2019).
    https://ucr.fbi.gov/crime-in-the-u.s/2019/crime-in-the-u.s.-2019/topic-pages/tables/table-4

  8. NICB ‘Hot Spots’: Auto Thefts Up Significantly Across the Country. National Insurance Crime Bureau. (2021, Aug 31).
    https://www.nicb.org/news/news-releases/nicb-hot-spots-auto-thefts-significantly-across-country