Understanding Auto Insurance Requirements in California

In order to register and drive a car in the state of California, you are required to have valid Proof of Financial Responsibility (Liability Insurance) to cover your personal liability for any accident you cause. Obviously, as an aspect of this requirement, California requires a minimum amount of such insurance.


Furthermore, there are different minimum requirements for each of the categories of general liability insurance. But, while California requires drivers to carry a minimum amount of liability insurance, it does not require drivers to carry uninsured/underinsured coverage or any other type of coverage.

Minimum Car Insurance Requirements in California


The minimum requirements for each category of liability insurance are commonly set forth as a set of three numbers. In California, these numbers are 15/30/5. These are expressed in thousands of dollars. So, this requirement is actually 15,000/30,000/5,000 dollars.


The first number represents the minimum amount of required general liability insurance to pay for liability for injuries to any one person in a single accident (the per-person limit). The second number represents the minimum amount of required general liability insurance to pay for injuries to all persons (combined) injured in a single accident (the per-accident limit). The third number represents the minimum amount of required liability insurance to pay for property damage caused to another by the fault of the insured.


To explain, suppose that you are driving down the street one day and while playing with your radio, you negligently run a stop sign and hit a very expensive car which is being driven by a man and in which woman is a passenger. The man is injured and his injury claim is worth $10,000. The woman is also injured and her injury claim is worth $20,000. The Repairs to the man’s car cost $8,000. How much will your Insurance pay to the man and woman, respectively?


Your insurance will pay the man $10,000 for his injuries and $5,000 for the damage to his car and will pay the woman $15,000. That means that the man gets shorted $3,000 for the damage to his car and the woman gets shorted $5,000 for her injury claim. Here is why:


Your insurance pays a maximum of $15,000 per person up to a maximum of $30,000 per accident for personal injury claims and $5,000 maximum for property damage. Thus, the most that any single person can get from your insurance for bodily injury is $15,000 and the most that everyone in the car combined (the man and woman, in this case) can get for bodily injuries is a total of $30,000. The most available for property damage is $5,000.


It doesn’t matter that the woman’s claim is worth more than the $15,000 maximum, the most she will get is the $15,000 per person maximum. Also, the man cannot get more than the maximum $5,000 coverage for the property damage, even though the claim is for $8,000. Similarly, if there had been five people in the car, the most any single one of them could get is $15,000 and the most that all of them combined could get is $30,000.


So, if each of the five of them have $10,000 claims, none of them will likely get the full amount of their claim because—even though none of their individual claims exceed the single person maximum of $15,000—their combined damages of $50,000 exceeds the $30,000 maximum per accident, so they will have to decide how to divide the $30,000 maximum among them.


Since there isn’t enough coverage to pay all of the claims, the injured parties will have to either make a claim for their underinsured motorist coverage (if they have it) or sue the tortfeasor (you) and hope that you have enough money or assets to pay the additional damages.

What are The Consequences of driving without Auto insurance?

If you are found to be driving without having auto insurance, you may:


  • Be fined
  • Have your vehicle impounded
  • Have your license suspended


Furthermore, you may be held personally liable for any damages you cause if you are involved in an auto accident.

Are There Alternative Ways to Satisfy California’s Minimum Liability Insurance Requirements?


There are 4 ways a California resident can comply with the state’s minimum liability insurance requirement, which are as follows:


  • By purchasing motor vehicle liability insurance policy with the minimum amount of coverage
  • By depositing of $35,000 in cash with the California Department of Motor Vehicles (DMV).
  • By qualifying for and receiving DMV-issued self-insurance certificate.
  • By posting a Surety bond for $35,000 from a company licensed to do business in California.


If you still can’t afford liability insurance, but have a good driving record, you may qualify for the California Low Cost Automobile Insurance Program. This is a low-cost insurance program administered by the state and designed to provide good drivers, who meet certain income level requirements, with the auto insurance needed to drive legally in California.


For more info on California’s auto insurance requirements, contact an experienced California auto accident attorney.

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