Car insurance in California

What California law requires

California is a financial responsibility state: if you own a vehicle, you have to be able to show you can pay for harm you cause, and you must carry evidence of that coverage in the car at all times. Almost everyone does this by buying an auto liability policy from an insurer licensed in California.

The minimum liability limits are:

These limits took effect January 1, 2025 under SB 1107, replacing the old 15/30/5 figures that had stood for decades. A further step up to 50/100/25 is scheduled for January 1, 2035, so limits you buy today are worth revisiting before then.

Insurance is not the only legal route — the California Department of Insurance (CDI) explains that you can instead make a cash deposit with the DMV or post a surety bond from a licensed insurer, each in an amount fixed by law. In practice these are rare; nearly all Californians simply buy a policy.

Personal injury protection (PIP) is not required here, and no-fault medical benefits are not part of the standard California policy.

If you cannot show proof of insurance when an officer asks, you can be ticketed. If you genuinely have no coverage, CDI warns that your licence may be suspended and your vehicle impounded. Your insurer also reports to the DMV when a policy starts or lapses, so a gap is visible to the state without anyone pulling you over.

Fault, comparative negligence and how claims actually run

California is an at-fault (tort) state. The driver who caused the crash — through their liability insurance — is responsible for the other side's injuries and property damage. There is no no-fault pot of money that pays your own medical bills regardless of blame.

That means after a crash you normally have two routes:

• Claim against the at-fault driver's insurer (a "third-party" claim) for your injuries, vehicle damage, rental costs and other losses.
• Claim on your own policy (a "first-party" claim) using collision, comprehensive, medical payments or uninsured/underinsured motorist cover, and let your insurer chase the other side.

Fault is rarely all-or-nothing. CDI defines comparative negligence as the percentage of fault shared by each driver when both contributed to the collision — so a recovery can be reduced in proportion to your own share of the blame. Adjusters argue about those percentages constantly, which is why evidence matters.

Practical steps that protect a claim:

1. Call law enforcement and get a report number; CDI advises reporting accidents immediately.
2. Photograph vehicle positions, damage, skid marks, signage and road conditions before anything moves.
3. Exchange names, licence numbers, plate numbers, insurer names and policy numbers.
4. Get contact details for independent witnesses — they often decide a disputed fault split.
5. Notify your own insurer promptly, even if you believe the other driver was entirely at fault.
6. Keep every bill, repair estimate and record of missed work.

If damages exceed the at-fault driver's limits, the shortfall is a personal debt of that driver — which is often uncollectable. That is the practical case for carrying your own underinsured motorist cover.

Optional coverage worth having in California

The legal minimum only pays other people. It does nothing for your own car or your own injuries.

Uninsured/underinsured motorist (UM/UIM). Not mandatory in California, but it is included by default — your insurer must put it in the policy unless you waive it in writing. If you have ever signed a stack of paperwork quickly, check your declarations page to see whether you waived it. UM pays when the at-fault driver has no insurance; UIM pays when their limits run out before your losses do. Given how many crashes involve minimum-limits or uninsured drivers, this is usually the first thing to add back.

Collision. Pays to repair or replace your car after a crash, whoever is at fault, less your deductible.

Comprehensive. CDI describes this as cover for damage from causes other than collision — fire, theft, vandalism, windstorm, flood and similar. In wildfire and hail-prone parts of the state that is not a theoretical risk.

Medical payments (MedPay). Because there is no PIP in California, MedPay is the usual way to get your own and your passengers' immediate medical bills paid without waiting for a fault fight to settle.

Rental reimbursement, towing and road service, GAP and extra-equipment cover. CDI lists all of these as optional add-ons. GAP matters if you owe more on a loan than the car's market value, because collision and comprehensive settle on market value, not on your loan balance.

One limits note: raising liability limits above the state minimum is typically the cheapest meaningful upgrade in a policy, and CDI's own guidance is blunt that the more assets you have, the more you stand to lose in a lawsuit beyond your limits.

How California prices cover — and what insurers may not use

California's rating rules come from Proposition 103, and they make this state unusual.

• Credit history may not be used to set auto premiums. Full stop. A thin or damaged credit file does not raise your car insurance price here, unlike in most states.
• The factors that must carry the most weight are your driving record, the miles you drive each year, and years of driving experience. Other factors are permitted but must be weighted below those three.
• Rate changes must be filed with and approved by the Insurance Commissioner before they take effect, so increases arrive slower — and sometimes in bigger steps — than in file-and-use states.
• Qualifying drivers are entitled to a good driver discount, so it is worth asking whether you have been rated as one.

For context on what Californians actually spend: the NAIC average expenditure for liability, collision and comprehensive combined, per insured vehicle, was $1,418 in 2023 ($1,417.94). That is a statewide average across all drivers and vehicles — your own figure depends on your record, mileage, location, vehicle and chosen limits, and no single company's price can be inferred from it.

If cost is the barrier, California runs the Low Cost Automobile Insurance Program (CLCA), created by the Legislature in 1999 under Insurance Code section 11629.7 and administered by the California Automobile Assigned Risk Plan. It provides liability cover at set rates to income-eligible drivers who hold a valid California licence, are at least 16, have a good driving record and own a vehicle under a stated value cap. Details and eligibility are at mylowcostauto.com or 1-866-602-8861.

Drivers who cannot get a policy on the open market because of their record can apply through CAARP, the assigned risk plan.

Rules California drivers trip on

Waiving UM without realising it. The single most common own-goal. UM comes in the box; declining it takes a signature. Many drivers who "don't have UM" simply signed it away years ago.

Treating the minimum as adequate. 30/60/15 is a legal floor, not a damage estimate. Modern vehicle repairs and a single serious injury can clear those limits quickly, and CDI confirms you are personally responsible for everything above your limits.

Assuming the 2025 increase updated your policy automatically. If your policy predates the change, confirm with your insurer or broker that your limits now meet 30/60/15 — and plan for the 2035 step to 50/100/25.

Leaving a gap between policies. Insurers report policy starts and terminations to the DMV. A lapse can trigger registration and licence consequences even if the car sat parked.

Not carrying proof in the vehicle. The law requires evidence of financial responsibility to be in the car at all times, not at home in a drawer.

Confusing agents and brokers. CDI notes that agents are paid by insurers, while brokers usually charge you a broker's fee. Ask about that fee before you sign.

Assuming a policy can be cancelled on a whim. CDI's auto guide states there are only three grounds on which an auto policy can be cancelled or non-renewed once it has been issued. If you receive a cancellation notice, ask the insurer which ground it is relying on — and challenge it if the answer is vague.

Expecting replacement cost on a totalled car. Collision and comprehensive settlements are based on market value, which is why GAP cover exists for financed vehicles.

Buying from an unlicensed seller. You can check any agent, broker or company at insurance.ca.gov/license-status/ or by phoning CDI.

Complaining to the California Department of Insurance

If your insurer delays, underpays, denies a claim unfairly or simply stops answering, CDI is the regulator and it takes consumer complaints directly.

Step 1 — put it to the insurer in writing. Ask for the specific policy language and the factual reason for the decision, and set a date for a reply. Keep copies.

Step 2 — escalate internally. Ask for a supervisor or the company's complaint or appeals unit. Note names, dates and reference numbers.

Step 3 — file with CDI. Use the Request for Assistance route at insurance.ca.gov, or call the consumer hotline on 1-800-927-4357 (800-927-HELP). CDI's own guidance is that if you think you have been treated unfairly, you should call them. Attach the policy declarations page, the claim number, your correspondence, the denial or settlement letter and any estimates or medical bills.

What CDI can and cannot do. It can review the file, contact the insurer for an explanation, enforce the Insurance Code and fair claims settlement regulations, and in many cases get a decision reversed or re-examined. It does not act as your lawyer and does not decide contested questions of liability or injury value — those may end up in court, where you would want your own legal advice.

Before you buy, use CDI too. The department publishes a consumer complaint study that lets you compare insurers' complaint records, and its licence lookup confirms a company or broker is authorised in California. Both are free.

For the Low Cost Auto Insurance Program, the separate helpline is 1-866-602-8861.