California Auto Insurance Laws

The laws of California require all motorists to be financially responsible for at least $35,000 worth of damages while operating a vehicle. The state allows residents to prove financial responsibility either with an insurance policy, a cash deposit of $35,000 or a surety bond for $35,000.
Minimum Levels of Protection
The State Legislature has set the following minimums for California auto insurance policies:
- $15,000 for bodily injury liability per person
- $30,000 for bodily injury liability per accident
- $5,000 property damage liability per accident
Determining Damages Based on Fault
The state's courts operate under a pure comparative negligence system. This means that a plaintiff involved in an accident can only collect damages in proportion to the defendant's level of responsibility.
So if Driver A is 80 percent at fault for an accident and Driver B is 20 percent at fault, Driver A can only collect 20 percent of his or her total damages, while Driver B can collect 80 percent of his or hers.
Online Coverage Verification
Rating Factors in California
CA auto insurers can price policies only according to the following variables:
Three Mandatory Factors: | |
Driving safety record | |
Annual mileage | |
Years of driving experience | |
Optional Factors: | |
Vehicle type | Driver's gender |
Type of use | Marital status |
Percent use | Policy persistency |
No. of vehicles | Smoker status |
Academic standing | No. of policies |
Training courses | Claims history of surrounding area |
Vehicle add-ons | |
Vehicle performance capabilities | Secondary driver characteristics |
Source: California Code of Regulations
Since 2006, insurers in the state have been required to submit proof of insurance online to the DMV for all cars registered in the state.
When a Californian goes to renew registration, the DMV will check through the database to see if a policy is in place for that particular vehicle. The DMV also is notified when a policy is canceled. If the department is notified of a cancellation and there is not a replacement policy submitted within 45 days, registration may be suspended.
Insurers must report policy information within 30 days of a car's initial registration.
Penalties for Driving Uninsured
- For a first conviction: a fine of between $100 and $200, plus penalty assessments.
- For subsequent convictions: a fine of between $200 and $500, plus penalty assessments
If it turns out that a car involved in an accident was uninsured at the time of the crash, the DMV may suspend the driver's license for a year. The driver must show proof of coverage in order to get driving privileges reinstated. Motorists in this situation can pay a $250 fee and apply for a restricted license.