Master California Car Insurance Laws and Minimum Requirements

California Law Requires Some Form of Minimum Insurance

Car insurance policies in California are a mixture of both optional and required insurance coverage. As a resident of Sacramento, CA requires you to acquire an insurance policy that meets or exceeds the California minimum coverage requirements. The following are forms of acceptable insurance:

  • Motor vehicle liability insurance policy
  • Cash deposit of $35,000 with DMV
  • DMV-issued self-insurance certificate
  • Surety bond for $35,000 from a company licensed to do business in California Source URL

California State Law Minimum Policy Requirements

All drivers in California are legally required to carry car insurance. You must also have a valid California driver’s license, own a vehicle valued at no more than $25,000, and be at least 16 years old. Source URL

According to the California Department of Insurance, California’s minimum requirement for insurance is liability car insurance. It’s the cheapest coverage in the United States, which ought to make buying the state minimum coverage a lot more affordable. However, this kind of coverage may not be enough to pay for new or costly automobiles. Source URL

Minimum liability insurance is required by law in California. This type of insurance covers the costs of injuries and damage that you might cause in an accident. However, it is possible for all parties to an accident to have some share of fault. A driver’s compensation may be reduced by the percent of the accident for which they have been deemed at-fault. Source URL

This type of coverage pays for bodily injuries and property damage you cause in an at-fault accident. Liability will also pay for the injured party’s lost wages or pain and suffering. Source URL

Coverage TypeMinimum Amount Required
Bodily injury liability coverage (BIL)$15,000 per person / $30,000 per accident
Property damage liability coverage (PDL)$5,000
Uninsured motorist bodily injury coverage (UMBI)$15,000 per person / $30,000 per accident
Uninsured motorist property damage coverage (UMPD)$3,500
Collision CoverageNot required
Comprehensive CoverageNot required
Medical Payments CoverageNot required
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Rental Car Insurance Laws

Most states require that rental car companies include the minimum coverage required by law. California is a key exception, however, as the state allows companies to rent out cars without providing any insurance. Source URL

What is the California Car Liability Assistance Program?

The California Low-cost Auto Insurance (CLCA) program was first introduced in 1999. This program helps low-income families who have a good driving record to get liability insurance protection in California. The insurance coverage limits for this program are lower than the state’s minimum insurance coverage. Source URL

Rules of California’s Low Cost Auto Insurance Program

With CLCA car insurance, you get the minimum amount of car insurance required in California. The state requires you to have a certain minimum amount of car insurance to legally drive on public roads. With CLCA car insurance, you meet these minimum car insurance requirements.

The basic California low-cost auto insurance policy has the following coverage limits:

  • $10,000 for bodily injury or death per person
  • $20,000 for total bodily injury or death when multiple people are hurt in an accident
  • $3,000 for property damage liability Source URL

Requirements to Qualify for California’s Low-Cost Automobile Insurance

The California Department of Insurance’s Low Cost Automobile Insurance Program is run by the California Assigned Risk Plan. Source URL

Policies are issued by California licensed insurance companies. California’s Low Cost Automobile Insurance policies satisfy the state’s liability insurance requirement.

You may qualify for California’s Low Cost Automobile Insurance Program if you:

  • Have a valid California driver’s license.
  • Own a vehicle that is valued at $25,000 or less.
  • Meet income eligibility requirements.
  • Are at least 16 years of age. Source URL

Legal Documents as Proof of Low Income for CLCA Insurance

The California Family Benefits Association (CFA) recommends that poor and moderate-income people pay no more than 2% of their income for car insurance. Source URL

Acceptable documents for proving low-income status include (provide one):

  • CalFresh (food stamps) electronic benefit transfer (EBT) card
  • CalWorks (welfare) notification letter
  • LIHEAP (low-income home energy assistance) documentation
  • Medi-Cal/Medicaid card
  • State of California Employment Development Department (EDD) debit card or benefit letters
  • SSI (aged, blind, or disabled) documentation
  • Social Security or pension letter
  • Income level documentation (like federal or state income tax returns, a W-2 form, a 1099 form, or a payroll stub)

You must only provide one of the above documents to qualify for CLCA car insurance. Source URL

California Laws for New Drivers

In California, new drivers are required to carry the same minimum auto insurance as any other driver. That means at least $15,000 per person and $30,000 for incidents involving bodily injury and property damage. Source URL

Law Prohibiting Credit Score Consideration

Interestingly, California is one of three states that has outlawed car insurance companies from using customer credit scores to determine the price of premiums. Some factors that will still affect the auto insurance quotes in California include:

  • Personal information like your age, gender, and marital status
  • Year, make, and model of your vehicle
  • Vehicle mileage
  • Your driving history
  • Your exact location and where you park your car Source URL

California Insurance Law Makes Everyone At-Fault

If you’re in an accident, you’re at fault. California is an at-fault state. If you get into an accident without insurance, you could end up going bankrupt paying for your own and the other driver’s long-term expenses. Source URL

If you get into an accident while driving without insurance in California, you will be cited and all the penalties will apply, no matter who is at fault. Source URL

Different types and amounts of coverage will work better for some vehicles than others. A newer, more expensive car will need extra, optional coverages like comprehensive and collision. Source URL

Most car insurance policies in California require that everyone is financially responsible for any injuries and damage they cause in an accident, but many also offer drivers other coverage options. Source URL

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