California has higher-than-average car insurance rates, which is surprising because it also has relatively low insurance requirements. The state minimum required levels of car insurance in California are lower than most other states and don’t offer much financial protection, especially if you are in a serious accident.
Whether you’re a California driver buying car insurance for the first time or you’re checking to make sure you have enough car insurance, here’s what you need to know about auto insurance laws and requirements in the Golden State.
Minimum auto insurance requirements in California
California has very low auto insurance requirements, which means California drivers who only get the minimum amount of coverage required by law probably don’t have enough coverage to be protected in an accident.
Here’s how much car insurance is legally required in California:
Bodily injury liability coverage per person: $15,000
Bodily injury liability coverage per accident: $30,000
Property damage liability coverage: $5,000
Liability insurance requirements in California
Liability coverage is the portion of your car insurance policy that pays for damage you cause to other drivers in an at-fault accident.
It includes bodily injury liability coverage, which covers the other driver’s injuries in an at-fault accident, and property damage liability coverage, which covers damage you cause to someone else’s car (or other property).
Drivers in California are required to have a minimum of $15,000 per person and $30,000 per accident in bodily injury liability insurance and $5,000 in property damage liability coverage, which is often written out as 15/30/5. [1]
→ Learn more about liability car insurance
Alternative types of financial responsibility in California
Drivers in California can choose to skip the state minimum insurance requirements if they use an approved “alternate type of financial responsibility,” which just means another way a proving you can pay for damage you cause in a car accident:
Cash deposit: Drivers can choose to make a cash deposit of $35,000 in a savings account and put the account information on file with the DMV. If you decide to do this, the state will monitor the account and draw directly from it if you are at fault in a car accident. If you let the balance of the account fall under $35,000 you will be in violation of the law, just like if you let your auto insurance lapse.
Certificate of self-insurance from the DMV: People who have more than 25 vehicles registered in their name are allowed to get a certificate of self-insurance that states they can cover medical bills, repair costs, property damage, and bodily injury liability costs. If you want to pursue self-insurance you will need to provide proof to the state that you can afford to pay those financial costs in the event of an at-fault accident.
Surety bond: You can purchase a $35,000 surety bond that guarantees you'll cover both bodily injury and property damage expenses in the event you're at fault in a car accident. If you can’t pay those costs, the surety company will pay them for you and seek repayment later. The California Department of Insurance has a list of licensed surety companies that offer surety bonds for drivers who prefer this type of coverage to traditional liability insurance.
These alternate types of financial responsibility could be a good idea for people who own a lot of property that needs to be insured, like a fleet of cars, or for people who have a significant amount of money and can always afford to pay for damages out-of-pocket.
But most people don’t have $35,000 or more to set aside in case of an accident, so the vast majority of drivers in California are better off purchasing traditional car insurance than trying to self-insure.
Proof of insurance requirements in California
Drivers are required to have proof of insurance for any vehicle that is operated or parked on California roads — so basically if you live in California and you have a car, you need to be able to show proof of auto insurance.
Proof of insurance is typically just a document showing that you have an active auto insurance policy (and that your coverage amounts meet the state requirements). California drivers are expected to provide proof of insurance when asked by a police officer, if they are in a collision, and when registering their vehicle.
Some states require drivers to carry hard copies of their proof of insurance, but drivers in California are also allowed to show proof of insurance electronically through their insurance company’s smartphone app.
→ Learn more about showing proof of insurance
Penalties for driving without car insurance in California
Driving without insurance is against the law in California, yet 16.6% of drivers in the state were uninsured in 2019. [2] If you're caught driving without insurance, you can expect the following penalties:
First offense: $100-$200 fine
Second offense: $200-$500 fine
Other penalties: You may have your license and registration suspended and/or be required to file an SR-22 certificate with the state.
An SR-22 is a form you are required to file with the state to prove you have a minimum amount of car insurance before they will reinstate your driver’s license. This is typically only necessary for people who have committed a serious offense, like a DUI or driving without insurance.
Does your credit score affect your car insurance in California?
No, insurance companies in California are not allowed to use your credit score to determine your car insurance rates. While this is good news for drivers with lower credit scores, drivers with excellent credit may sometimes pay more for insurance than they would if credit scores were used to help set insurance rates.
→ Learn more about credit scores and car insurance
Does your gender affect your car insurance in California?
Nope! In fact, California is one of several states, including Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania, that have made it illegal for insurance companies to use gender to determine insurance rates.
→ Learn more about how gender affects car insurance rates
Are the state requirements enough car insurance in California?
Not really. California minimum car insurance requirements are very low, which means drivers who only get the state-required levels of liability insurance don’t have enough coverage for a serious accident.
A driver who is at fault in an accident will be held legally responsible for any damage caused by the accident, which means they will be expected to pay any costs beyond the limits of their liability coverage. Not having enough liability coverage can leave you responsible for paying tens or even hundreds of thousands of dollars out-of-pocket.
Say you make a left turn without looking and accidentally cause a crash that totals someone else’s Range Rover. You easily could be on the hook for $90,000 or more, and if you only have up to $5,000 in property damage liability coverage, you’ll have to pay the rest yourself.
Drivers should always get as much car insurance as they can afford. We recommend liability insurance levels of 100/300/100, which means up to $100,000 per person and up to $300,000 per accident in bodily injury liability coverage and up to $100,000 in property damage liability coverage.
→ Learn more about what’s recommended for car insurance coverage
Does California have a grace period for car insurance?
California allows a new car insurance grace period of 30 days, which is how long you have after purchasing a vehicle to buy insurance for that car and provide proof of active insurance coverage to the California DMV. If you already have an auto insurance policy in place, you have up to 45 days to either add your car to that policy or cancel it and get a new policy for your car.
This grace period is only for vehicle registration purposes. If you are driving the car you need to have an insurance policy in place to avoid getting a ticket if you are pulled over or paying out-of-pocket for damage in an at-fault accident.
California's low income auto insurance program
California’s Low Cost Auto Insurance program (CLCA) is designed to provide affordable insurance to low-income residents of the state.
Instead of meeting California’s minimum insurance requirement of 15/30/5 in liability insurance, the CLCA offers coverage of 10/20/3 in liability coverage. To qualify for the program, a driver must meet the following criteria:
Have a valid California driver’s license
Meet financial guidelines
Own a car worth less than $25,000
Have a clean driving record
Be of legal driving age
The CLCA insurance program allows drivers to legally have liability coverage at lower levels than the state’s minimum requirements to make car insurance more affordable, with rates between $244 - $966 per year. But, while drivers who get covered through this program can legally drive with those coverage amounts, it’s not enough to cover the costs in a serious accident.
Frequently asked questions
Why is insurance so expensive in California?
There are many reasons car insurance is so expensive in California. California has several cities with very dense populations, which increases the chance of being in an accident. California also has wildfires and earthquakes that contribute to more claims being filed under comprehensive coverage.
Do you have to have car insurance in the state of California?
Yes, California law requires drivers to have a minimum of 15/30/5 in liability coverage, which stands for $15,000 bodily injury liability per person, $30,000 bodily injury liability per accident, and $5,000 in property damage liability insurance.
How do I know if I need an SR-22 in California?
An SR-22, also known as a California Insurance Proof Certificate, is a form your insurer files with the DMV. An SR-22 is typically required for drivers with a suspended license or restrictions on their license due to a severe violation; drivers who are required to have an SR-22 will receive notice from the court or the state.
Is California a no-fault state?
No, California is an at-fault state. At-fault states hold the driver who is responsible for an accident financially responsible for the damage caused, which means drivers in at-fault states need to have both bodily injury and property damage liability insurance.
