To drive a vehicle on public roads in California, you must comply with the state’s financial responsibility laws, which mainly involve having specific minimum levels of car insurance coverage. According to the California Department of Motor Vehicles (DMV), all drivers must always carry proof of this insurance in their vehicle. This proof must be available for inspection in the following situations: when law enforcement asks, during vehicle registration renewal, or after a traffic accident.
Acceptable forms of financial responsibility as recognized by the state are:
- A motor vehicle liability insurance policy that meets or exceeds the state’s minimum insurance coverage requirements.
- A cash deposit of $75,000 with the DMV.
- A surety bond of $75,000 issued by a company licensed to do business in California.
- A DMV-issued certificate of self-insurance is usually for individuals or entities with multiple vehicles or fleets.
Also, California law prohibits the factors that insurance companies can use to calculate car insurance premiums. Specifically, they can’t use a driver’s credit score and gender when determining auto insurance rates, which is more fair.
This law protects all road users and emphasizes the importance of carrying and presenting valid insurance documents as part of being a responsible vehicle owner.
California Minimum Auto Insurance Requirements
To comply with California’s financial responsibility laws, you must have a minimum amount of auto liability insurance to cover damages or injuries you cause to others in the event of a car accident. This includes other drivers, passengers, or pedestrians who get hurt in a crash for which you or someone on your policy is responsible.
As of January 1, 2025, California requires the following minimum liability limits for all auto insurance policies:
- Bodily Injury Liability Coverage:
- $30,000 bodily injury liability per person
- $60,000 bodily injury liability per accident for two or more people
- Property Damage Liability Coverage:
- $15,000 property damage per accident
These are higher than the old 15/30/5 limits. While these minimums are required, they may not be enough to protect you in the event of a serious accident. Once these limits are reached, you could be personally responsible for the rest. So many drivers choose to carry higher limits to protect their personal assets.
California law also requires insurance companies to offer bodily injury coverage to uninsured/underinsured motorists (UM/UIM), which covers your medical expenses if an uninsured or underinsured driver hits you. The offered limits are:
- Uninsured/Underinsured Motorist Bodily Injury:
- $30,000 per person
- $60,000 per accident
UM/UIM coverage is optional and can be declined in writing. Still, it’s good to have it, especially in accidents with underinsured or uninsured drivers.
Ultimately, while the state sets these minimums, raising them can provide more financial protection for you and your family.
Is California a No-fault state?
No, California is not a no-fault state. It’s an at-fault or tort-based state. Under this system, the driver deemed to have caused the accident is also responsible for paying others for their injuries or property damage.
This liability includes medical bills, vehicle repair costs, and other losses to the other party and its passengers. It is usually covered by the at-fault driver’s auto liability insurance.
California doesn’t impose many restrictions on the rights of people injured in car accidents to get compensation. Injured parties can file a claim directly with the at-fault driver’s insurance company, file a claim through their own insurance company (who may then seek reimbursement), or file a personal injury lawsuit to get damages.
This fault-based system means accountability is tied to the party who caused the accident, so there’s more legal recourse for injured drivers and passengers.
Additional Car Insurance Coverages for More Protection
While California law requires minimum liability insurance to cover damages and injuries you cause to others, it doesn’t cover your own vehicle or medical expenses if you’re in an accident. To get complete financial protection, called “full coverage,” drivers are encouraged or, in some cases, required to add more coverage to their policy.
Most lenders will require you to carry comprehensive and collision coverage if you’re leasing or financing your vehicle. These coverages are also a good idea if you can’t afford to pay for major repairs or replace your vehicle if you’re in an accident.
Some additional auto insurance coverages to consider are listed below.
- Comprehensive Coverage: Covers non-collision related damage, like theft, vandalism, natural disasters, fire or falling objects.
- Collision Coverage: Pays to repair or replace your vehicle if it’s damaged in an accident, regardless of who’s at fault.
- Uninsured/Underinsured Motorist Coverage: Protects you if you’re hit by a driver with no insurance or not enough to pay for your damages.
- Medical Payments Coverage (MedPay): Pays for medical and funeral expenses for you and your passengers, regardless of who’s at fault in the accident.
- Personal Injury Protection (PIP): Provides broader financial support after a crash by covering medical expenses, lost wages, and related costs for you and your passengers, regardless of who caused the accident.
Adding these coverages can protect your health, finances, and vehicle investment from a wider range of risks beyond California’s minimum car insurance requirements.
Penalties for Driving Without Insurance in California
In California, you are required to have and carry proof of financial responsibility, which is usually liability insurance. This insurance coverage must meet minimum limits of $15,000 for property damage, $30,000 bodily injury liability for one person, and $60,000 per accident. You can also satisfy California’s financial responsibility requirement through state approved methods, such as a cash deposit with the state treasurer.
When stopped for a traffic violation, you must show your driver’s license, vehicle registration, and proof of insurance. Not having auto insurance coverage or forgetting to carry it can have big legal and financial consequences.
Fines for driving without insurance in California are listed below.
- First Offense: $100 to $200 plus penalty assessment fees, which double or triple the fine so that the total amount can be much higher.
- Second Offense: $200 to $500 plus assessment fees, totaling $520 to $1,300.
The California DMV can suspend your vehicle’s registration. This makes driving or even parking the car on the road illegal until you provide proof of insurance. They can also suspend your driver’s license in some cases.
While these penalties are big, they are nothing compared to the financial risk you take if you get into a car accident and are uninsured. Without insurance, you could be personally liable for thousands or even hundreds of thousands of dollars in damages. Having car insurance is not only the law but a financial safety net.
SR-22 Insurance for High-Risk Drivers in California
High-risk drivers in California need to have SR-22 insurance. An SR-22 is not a policy itself but a Certificate of Financial Responsibility filed by the insurance company with the DMV. This certificate proves they have at least the state minimum liability coverage.
An SR-22 is usually required for people who have been convicted of a DUI, have multiple serious traffic violations or accidents, or have had multiple license suspensions. Uninsured motorists found at fault in a car accident may also need to get an SR-22 before they can drive again.
You must have continuous coverage with an SR-22 requirement. If your SR-22 lapses, your insurance company must notify the DMV, and your driver’s license will be suspended until coverage is reinstated.
Why it’s essential to follow California Auto Insurance Laws
Auto insurance is not only the law in California, it’s a way to protect yourself, your passengers and your financial well-being. With the new minimum liability limits in effect, make sure your current California auto insurance policy is up to date and compliant.
Take a few minutes today to review your current auto insurance policy. Our insurance agents can help you verify that your coverage meets or exceeds the minimum requirements. It’s also a chance to add comprehensive and collision coverage covering non-collision incidents and damage to your vehicle—regardless of fault.
If you’re worried about rates going up, now may be the time to shop around for cheaper coverage. Compare quotes from top insurers and find a policy that’s legal and financially secure at a lower rate. Being proactive about your insurance will give you peace of mind on the road and avoid penalties or financial risk if you get into an accident.
Frequently Asked Questions
Is liability insurance required for every driver in California?
Yes. California Vehicle Code §16020 requires all drivers to carry proof of financial responsibility, usually by having liability insurance that meets the state’s minimum auto insurance coverage levels. Driving without liability insurance can result in fines, impoundment, or license suspension.
Can I show proof of insurance on my phone during a traffic stop?
Yes. California law allows drivers to use electronic forms of insurance proof, such as digital insurance cards or DMV Wallet records, which law enforcement must accept as valid during a traffic stop.
Are uninsured and underinsured motorist coverages required in California?
No, uninsured motorist coverage is not required in California; however, insurers must offer it, and drivers who decline it must do so in writing. While not required, many drivers opt in for extra protection against accidents with uninsured or underinsured motorists.
What is the California Low Cost Auto Insurance Program (CLCA)?
The CLCA is a state program that provides low cost liability auto insurance to income qualified drivers with good driving records who meet specific income and vehicle value requirements. This program aims to increase insurance access and reduce the number of uninsured drivers.
Can my registration be suspended for letting my policy lapse?
Yes. If your policy lapses and the California DMV is notified of the cancellation without proof of a new policy within 45 days, your registration will be suspended. Driving with suspended registration can result in big fines and penalties.
How often do insurers report my policy status to the DMV?
Insurers in California report any changes, including new policies, cancellations, or reinstatements, to the DMV daily. This daily reporting allows the DMV to monitor drivers' compliance with mandatory insurance laws almost in real time.
