What Is the Minimum Car Insurance Requirement in California?

Here are the liability limits that are required by law as of January 1, 2025:

• Bodily injury coverage: $30,000 per person; $60,000 per accident
• Property damage coverage: $15,000¹

You may see these liability limits abbreviated to 30/60/15.

In California, like in many states, minimum coverage is probably not enough. Liability coverage only applies to the other party’s damages and injuries.

Consequently, you’d be responsible for paying for your own injuries and damages out of pocket for at-fault accidents. In most cases, it’s probably worth paying for full coverage, which includes comprehensive and collision coverage and helps cover damages to your own vehicle.

The liability limits in California were quite low before the new bill to increase them was passed — the new limits take effect starting on January 1, 2025. However, they still only leave you with $30,000 in bodily injury liability coverage per person and $15,000 in property damage coverage.

According to data analyzed by the Insurance Information Institute, the average bodily injury claim in 2023 was $26,501, which would leave you a buffer of under $4,000. Also, keep in mind that California has one of the highest costs of living in the country, so claims are likely to be higher than the national average due to the high costs of auto repairs and medical care.

To protect yourself financially, it’s wise to purchase liability limits higher than the state minimum. We recommend limits of 100/300/100, plus full coverage. If you have important assets, like a home, you might even go up to 250/500/250 or purchase an umbrella policy.

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.

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 in California, 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 impoundment

Insurance in California is somewhat less expensive than the U.S. average, in part due to state regulations limiting how much insurance companies can charge. Our market analysis found that the average cost of a full coverage policy is $2,199 annually, about 8 percent lower than the national full coverage average of $2,399. The average cost of minimum coverage in California is $645, about the same as the national average of $635 annually.

In 2022, the last year for which the National Association of Insurance Commissioners published data, the average Californian spent $1,249.83 on insurance a year, which breaks down into these coverages:

• Liability: $613.82
• Collision: $531.71
• Comprehensive: $104.29

Compared to the 2022 national average of $1,258.10, the cost of car insurance in California is very slightly lower.³ However, you could pay much lower or much higher depending on your driving profile.

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.

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

• Valid driver’s license
• Current vehicle registration
• Initial deposit
• One of these documents:

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.⁴

2. 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.
3. Bundle your policies. If you have multiple insurance types, bundle your policies under one provider to get a multi-policy discount.
4. Raise your deductible. Increase your deductible to lower your premiums if the new deductible would still be affordable for you.
5. Lower your limits. Lowering your limits will also lower your premiums, though out-of-pocket expenses may be higher for damages or injuries.
6. 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.

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.

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.⁵ 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.

• 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. You’ll need these items:
  • Insurance documents
  • Payment method for 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

California is fifth in the nation when it comes to rates of motor vehicle theft. In 2023, there were 534 thefts per 100,000 inhabitants — 75 percent higher than the national average of 284.⁶ 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 second worst in the nation, with 1,072 thefts per 100,000 inhabitants in 2022.⁷ That’s 356 percent higher than the average U.S. metropolitan statistical area. San Francisco and Los Angeles have the next-highest rates of car theft. In general, car theft rates are higher in cities than in suburban or rural areas.

California’s minimum liability requirements increase effective January 1, 2025. Even with the new limits, it’s often wise to purchase more coverage to protect your assets in the event of an accident.

If you’re struggling to afford insurance, California offers a low-cost car insurance alternative for low-income households — a helpful program that most states don’t offer. Even if you don’t qualify for this program you can still find cheap car insurance, as California’s car insurance rates are relatively moderate compared to the rest of the country.