If you want to learn about California auto insurance, we’ve got all the information you’ll need right here. Keep reading for information on required coverage, penalties for driving uninsured, important coverage decisions, available discounts, and more.

Mandatory insurance law

California law requires all drivers to have insurance. You have to show proof of car insurance in the state when you:

  • Are asked for it by police
  • Have an accident
  • Register your car
  • Renew your car registration
  • Get your car inspected

Minimum California coverage requirements

California law has certain standards for car insurance policies. Every policy must include a minimum amount of liability coverage. The following table breaks down the requirements.

Required coverage types Minimum amount of coverage
Bodily injury liability $15,000 for each person’s injuries in an accident
$30,000 total for all injuries in an accident
Property damage liability $5,000 total per accident

Liability coverage

When someone driving your car causes an accident, it pays for victims’ medical and repair bills. However, it only pays up to a certain amount. Minimum policies include $30,000 worth of coverage for medical bills and $5,000 for property damages. If you get the minimum amount of liability insurance, you may see it referred to as 15/30/5 coverage. You can buy more than the minimums to be better protected.

Remember, liability doesn’t cover the driver’s medical bills or car repairs. It only covers those costs for victims after an auto accident.

California’s property damage liability limits are some of the lowest in the U.S. It might be a smart idea to buy higher limits. If you don’t, you may be left paying for other people’s property repairs out of your own pocket.

Electronic proof of insurance

You may have to prove that you’re insured at traffic stops and after an accident. In the Golden State, you can do so with your smartphone or other electronic device. That’s thanks to the electronic proof law, which went into effect in 2013.

For the electronic document to be valid proof of insurance, it should clearly state at least the following:

  • Name of the insurance company
  • Insurance policy number
  • Policy period
  • Name and address of each insured driver
  • Policy limits
  • Make and model of each covered vehicle

Penalties for driving uninsured

Don’t break the law and drive without car insurance in California. It could cost you. You could get stuck having to pay other people’s medical and repair bills if someone crashes your car. You could get your license suspended and your car towed. On top of that, you could have to pay hundreds of dollars in fines and fees.

Number of Offenses Fine Other penalties
1st $100 – $200 + local fines Possible fees for towing/impoundment
2nd & Subsequent $200 – $500 + local fines Possible fees for towing/impoundment

No pay, no play

In the Golden State, uninsured drivers aren’t treated them same as insured drivers. This is because of the “no pay, no play” law in California. The law restricts uninsured drivers’ legal options after an accident.

If you don’t have car insurance and are involved in an accident, you can sue for economic damages only. Those include things like medical and repair bills. You won’t be able to sue for non-economic damages, like pain and suffering.

The law is yet another reason that uninsured drivers should get covered.

Coverage considerations

Optional coverages

In addition to liability coverage, there are optional coverages you can add. They’ll raise the cost of your insurance, but they’ll also provide greater protection. The following are the most widely available coverage add-ons in the state.


It pays for repairing or replacing the insured car if it’s damaged by something other than a collision. Some examples of this type of damage are vandalism, hail damage, and theft. In 2011, 7 out of 10 drivers in California bought comprehensive coverage.


It pays for repairing or replacing the insured vehicle after an accident. In 2011, more than two-thirds of drivers in California bought collision coverage.

Uninsured/underinsured motorists (UM/UIM) bodily injury

It pays your medical bills and the medical bills of your family and passengers after an accident. It does so when the driver who caused the accident either:

  1. Doesn’t have insurance or fled the scene of the accident
  2. Has insurance, but not enough to cover all your medical bills

California auto insurance companies are required to offer this coverage to you. If you don’t want it, you have to reject it in writing.

Uninsured/underinsured motorists (UM/UIM) property damage

It pays for repairing your car after an accident caused by a driver who either:

  1. Doesn’t have insurance or fled the scene of the accident
  2. Has insurance, but not enough to cover all your repair bills

Medical payments

It pays your medical and funeral bills after an accident. It also does so for your family members and passengers. It provides coverage no matter who caused the accident.

Rental reimbursement

It pays for the cost of renting a car after an accident.


It pays for towing and labor due to a mechanical breakdown.

Insuring your car against theft

Comprehensive coverage, which protects against theft, may be more valuable in California than in other parts of the country. That’s because many parts of California have exceptionally high rates of car theft. In fact, 8 of the 10 national “hot spots” for car theft were in California in 2012, according to a report from the National Insurance Crime Bureau.

Here are those 8 California “hot spots” for stolen cars and their rankings in that report:

  • Modesto (No. 1)
  • Fresno (No. 2)
  • Bakersfield (No. 3)
  • Stockton-Lodi (No. 4)
  • San Francisco/Oakland/Hayward (No. 6)
  • San Jose/Sunnyvale/Santa Clara (No. 7)
  • Vallejo/Fairfield (No. 8)
  • Redding (No. 10)

Protection from drivers without insurance

Statewide, about 15% of drivers are uninsured, according to the Insurance Research Council. That’s a little above the nationwide average. If someone crashes into you, you have about a 1-in-7 chance that he or she doesn’t have insurance. That means they won’t be able to pay for your damages from that accident.

If someone who injures you in an accident doesn’t have insurance, you may need to rely on your own policy. But not all people have the coverage they need. The minimum coverage required by the state doesn’t include protection for these situations.

The following optional coverages will pay for medical bills for you, your family, and any passengers if they were injured by an uninsured driver:

  • Uninsured motorist
  • Medical payments

The following optional coverages will pay for repairing your car if it’s damaged by an uninsured driver:

  • Uninsured motorist property damage
  • Collision

If you don’t have any of the coverages listed here, you might not be able to get your medical bills and/or property damages covered.

How claims work in California

California uses a “tort” system for car insurance claims. That means if someone injures you or wrecks your car, their liability insurance pays your medical and repair bills.

But in some cases, the other driver won’t be 100% responsible for the accident. Your actions could have contributed to the accident, and you could be partially responsible. This makes things a little more complicated.

If you’re partially responsible, it changes how much you can get from the other driver’s insurer. California uses “pure comparative fault” to determine payment. That means the amount you get for your bills will be reduced by your percentage of fault.

For example, if you’re 20% responsible for an accident, the other driver’s insurer doesn’t pay 100% of your bills. Instead, it pays only 80%, since you were 20% responsible. So in this example, if you have $10,000 in bills from an accident, the other driver’s insurer has to pay only $8,000.

So what if the other driver’s insurer doesn’t pay your bills? You use your own policy. Medical payments coverage will help pay your medical bills. Collision will help pay your repair bills. But both of those coverages are optional. You’ll be on your own if you didn’t add them to your policy.

California auto insurance rates

Car insurance premiums in the Golden State are cheaper than average. The average cost of a California car insurance policy in 2011 was about 3.6% lower than the national average, according to the National Association of Insurance Commissioners.

High premiums for Los Angeles drivers

California’s auto insurance prices are a smidge below average nationally. However, prices are a lot higher in Los Angeles.

Angelenos can expect to pay much higher premiums than in other parts of the state. In fact, the city had the 10th-highest auto insurance premiums of any city in America, according to a 2012 Runzheimer International study.

Rating factors

Car insurers look at each driver differently. That’s why they charge drivers different prices. In California, the law requires that car insurers use the following three driving-related factors when to determine coverage prices:

  • Driving safety record
  • Annual mileage
  • Years of driving experience

Insurers in the Golden State cannot consider credit history when setting prices for your policy. The Golden State is just 1 of 3 states in the U.S. with such a ban.

California law allows car insurers to look at a number of other factors that play into the price of a policy. They are all optional, so insurance companies could use the rating factors in entirely different ways, if at all. The optional factors are:

Vehicle type Gender
Type of use Marital status
Percent use Policy persistency
Number of vehicles Smoker status
Academic standing Number of policies
Training courses Claims history of surrounding area
Vehicle add-ons Vehicle performance capabilities
Secondary driver characteristics

Available discounts

In the Golden State, drivers have plenty of chances at auto insurance savings. For a full list of discounts offered by car insurers, check out the listing provided by the California Department of Insurance. The listing includes 14 different types of discounts. It shows whether insurers offer those discounts and how big the discounts are. Over 50 insurers are included in the listing.

California auto insurance companies

California Low-Cost Automobile Insurance Program

If you can’t seem to find a policy to fit your budget, you should check out the California Low-Cost Automobile Insurance Program (CLCA).

The CLCA helps low-income drivers get coverage at more affordable prices. Prices are as low as $338 a year.

To get a policy, you must meet certain eligibility requirements. In addition to having a household income below a certain level, you must:

  • Be a good driver
  • Be at least 19 years old
  • Have been continuously licensed for the past three years
  • Own a vehicle worth less than $20,000

The available types of CLCA coverage are liability, uninsured motorist (bodily injury only), and medical payments.

Your rights after an accident

If you’ve been in an accident and want to know about the claims process and your consumer rights, regulators have publications available online that can help you.

Know your rights with “So you’ve had an accident, what’s next?,” a guide that helps you through the steps you should take after an accident.

The Auto Body Repair Consumer Bill of Rights outlines what you are entitled to when fixing your car. A more extensive consumer guide about auto body repairs is also available.

In addition, if you’re unhappy with your auto insurance claim, you can file an official complaint. There’s also a California mediation program for automobile claims. That way, you can find a resolution in disputes with your auto insurer.

Research tools for consumers

If you want to research your insurer’s customer service record, California officials list formal complaint data online. The list shows you how many complaints consumers have about car insurers in the Golden State. So read up before buying to make the best decision.

If you’re buying from a smaller insurance company or agent you’ve never heard of before, you may want to make sure it’s licensed to do business in your state. If you buy a policy from an unlicensed agent or company, your coverage may be worthless. California regulators monitor who is and isn’t licensed in the state, and they provide an online tool that you can use to search for licenses in California.

California Automobile Assigned Risk Plan

The California Automobile Assigned Risk Plan is the insurer of last resort for drivers in the Golden State. If you’ve had a hard time finding a car insurer who will cover you (usually because of marks on your driving record), you can still have this option. The Plan is meant to cover the state’s high-risk drivers.

Driving privileges for undocumented immigrants

In an attempt to get more drivers licensed and insured, California legislators have passed a law to open up a way for undocumented immigrants to get legal driving privileges in the Golden State. Typically, drivers have to have a Social Security Number, but the new law lifts that requirement. Instead, drivers can submit other documents proving that they are California residents.

The kind of documents needed have not been finalized yet. Earlier this year, officials started working with the public in workshops, and are a step closer to a list of documents the Department of Motor Vehicles (DMV) will accept.

The law is expected to go into effect next year. Check out the DMV’s news site to find the latest on the law.

Pricing factors

There are about 19 different factors California insurers can use to price your policy. Only 3 are mandatory: driving safety record, annual mileage, and years of driving experience.