What Is the Minimum Car Insurance Requirement in California?

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

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

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.

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

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.

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.⁵

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.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

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.

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.