California car insurance laws

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Car insurance is legally required in California. Every driver must carry a minimum amount of insurance in order to meet the state’s requirements. Before you purchase auto insurance in the Golden State, it is important to know the California car insurance laws.

California’s car insurance laws are similar to many other states. Driving without the minimum amount of coverage can result in fines, license suspension and other serious consequences. Keep reading to learn more about car insurance laws in California.

Car insurance laws in California

California car insurance laws are very straightforward. Drivers must carry a certain amount of financial responsibility of their choosing, and they must keep proof of insurance in their vehicle. When requested by a police officer, drivers are legally required to show proof of insurance. Here is the full list of car insurance laws in California:

  • Drivers must carry financial responsibility for every vehicle they own. Acceptable forms of financial responsibility include car insurance, a cash deposit of $35,000 with the DMV, a DMV-issued self-insurance certificate or a $35,000 surety bond from a company licensed to do business in California.
  • Drivers must carry proof of insurance in their vehicle at all times.
  • Drivers must show proof of insurance when requested by law enforcement, after an accident and when renewing the car’s registration at the DMV.
  • Insurance companies in California are legally required to report private passenger car insurance information to the DMV.

Liability insurance in California

Most California drivers purchase a car insurance policy to fulfill their financial responsibility requirement. Per state law, all drivers must carry a minimum amount of liability insurance to protect themselves and other drivers on the road.

The minimum liability limits in California are 15/30/5. That means drivers must have $15,000 in bodily injury liability coverage per person, $30,000 in bodily injury liability coverage per accident and $5,000 in property damage liability coverage per accident. Uninsured and underinsured motorist coverages must be offered but can be declined.

However, most insurance companies recommend that drivers purchase more coverage than what is legally required. There is no guarantee that California’s minimum liability requirements will be enough to cover the full cost of an at-fault car accident.

For example, if a driver got into an accident that resulted in $50,000 in passenger injuries, the minimum bodily injury liability coverage would not cover the full cost. If the driver only had $30,000 in bodily injury liability coverage per accident, they would be responsible for paying the remaining $20,000 out-of-pocket.

Is California a no fault state?

No, California is not considered a no-fault state. In no-fault states, a driver’s insurance company covers the cost of their medical expenses and lost wages after an accident, regardless of who caused the crash. In a fault state like California, the at-fault driver’s insurance company is responsible for compensating the other driver for their medical costs.

Penalties for driving without insurance in California

California law states that drivers who do not carry the minimum amount of liability insurance are subject to penalties. Here are some of the punishments that Californians can face for driving without insurance or financial responsibility in the state:

  • If you are found to be driving without proof of insurance, you will receive a ticket, pay a fine and appear in court.
  • If you are found to be driving without liability insurance, your license may be suspended and your vehicle could be impounded.
  • If the DMV does not receive proof of insurance for your newly registered vehicle, the registration is automatically suspended.

Additional auto insurance coverage options in California

In addition to liability insurance, California drivers can choose to purchase other coverages for more protection. Buying more coverage raises the premium, but it reduces the need to pay out-of-pocket in certain situations. Here are the additional auto insurance coverage options available in California:

  • Collision insurance: Collision insurance pays to repair vehicle damage after an accident. It also covers exterior damage caused by hitting stationary objects. On average, collision coverage costs around $363 per year.
  • Comprehensive insurance: Comprehensive insurance pays for vehicle damage caused by anything other than a collision. Examples include falling objects, fire, flood and animal damage. The average comprehensive insurance policy costs about $160 per year.
  • Uninsured/underinsured motorist insurance: Uninsured/underinsured motorist coverage pays for medical bills and lost wages following an accident caused by a driver who does not have insurance or enough insurance to cover the losses.
  • Gap insurance: Drivers who have a lease or loan should consider purchasing gap insurance. After an accident, it covers the difference between the car’s depreciated value and the remaining loan balance on the vehicle.
  • Roadside assistance: Roadside assistance covers basic vehicle repairs, towing, extrication, refueling and battery services if the car breaks down.

Frequently asked questions

What is the best car insurance company in California?

There are dozens of car insurance companies in California. Based on customer reviews, coverage options, discounts and pricing, we determined that the best car insurance companies in California are Geico, Progressive, State Farm and Wawanesa.

What is the cheapest car insurance company in California?

Most drivers look for affordable rates when shopping for car insurance. Every driver pays a slightly different price, but some providers offer cheaper rates than others. California drivers who are looking for the cheapest car insurance should start by looking at Geico, Capital and Wawanesa.

How much does car insurance cost in California?

In California, the average driver pays around $733 per year for minimum coverage car insurance and $2,065 for full coverage. By comparison, the national average rate is $1,674 per year for full coverage. However, car insurance premiums are personalized. Insurance companies look at different factors to calculate a driver’s premium, including their age, vehicle type and claims history. In California, your ZIP code, gender and credit score cannot be used to determine your car insurance rates.

How can I lower the cost of my car insurance?

California drivers have several options for lowering their car insurance premium. Most car insurance companies offer discounts for being claims-free, taking a defensive driving course, paying the annual premium in full, bundling policies and insuring multiple vehicles. Raising your deductible and driving less frequently can also result in a lower premium.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth has two years of experience writing for insurance domains such as, The Simple Dollar, and NextAdvisor, among others. In addition to auto insurance, Elizabeth regularly writes about home insurance, renters insurance and life insurance. She also covers industry trends and general insurance education.