California Auto Insurance Laws

California with a blue background
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
These liability minimums are relatively low when compared with other states. Forty-two states and D.C. have bodily injury liability minimums that are higher than California's, and 47 have property damage liability minimums that are higher.

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 typeDriver's gender
Type of useMarital status
Percent usePolicy persistency
No. of vehiclesSmoker status
Academic standingNo. of policies
Training coursesClaims history of surrounding area
Vehicle add-ons
Vehicle performance capabilitiesSecondary 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
The courts in the state also may impound a motor vehicle if it is found to be uninsured. The vehicle owner must pay all towing and storage fees and provide proof of financial responsibility in order to get it back.

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.