Car Insurance in California

In 2023, the average annual cost of car insurance in California is $2,100-$2,400 per year for full coverage and $700-$1,000 for liability-only.

The California auto insurance market has a wide variety of coverage options from hundreds of insurers. Discuss your choices of coverage with a licensed California insurance agent who can help you pick the best company to fit your specific car insurance needs.

Here are the most common auto insurance companies offering coverage in California:

Auto insurance in California is a contract between a vehicle owner and an insurance company for protection against financial losses resulting from accidents, theft, and other covered damages. To stay covered, a vehicle owner must regularly pay premiums to their insurer for their car insurance policy. The California Department of Insurance regulates auto insurers and the rates they offer to you in the quote.

Why Do We Need Auto Insurance in California?

We need California car insurance to protect us from injuries and damages we may cause to ourselves and to other people or their properties while driving. Some coverages protect us from other drivers, while other coverages protect others from our actions or inactions.

California auto insurance safeguards the car owner from financial losses caused by injuries and damages sustained in a covered accident or other covered perils. Data from the California Highway Patrol showed that in 2019, there were a total of 187,211 car crashes that caused injuries to 269,031 persons, and led to 3,373 deaths. These figures show that there is a fatal auto crash every 3 minutes in California and a traffic-related death every 150 minutes.

As an at-fault state, California car insurance law requires all vehicles driving on California roads to have the minimum auto liability coverage:

• $15,000 for injury/death of one person
• $30,000 for injury/death of more than one person
• $5,000 for damages to properties

If you drive a commercial vehicle, your minimum liability insurance starts from $750,000. There were a total of 693 light-truck accident deaths in California in 2020. Between 2013 and 2015, California ranked the second highest for large truck and bus fatalities in the United State with a yearly average of 311 fatal crashes (behind Texas with an average of 572 over the same period). The table below shows the range of commercial vehicle injuries and fatalities in California between 2015 and 2018.

Commercial vehicle injuries and fatalities in California between 2015 and 2019

The state-mandated minimum California car insurance may not offer adequate protection if the cost of treatments and repairs due to a covered accident exceeds the coverage limit. It is advisable to get higher coverage for maximum protection. The California Department of Motor Vehicles (DMV) requires all car owners to show evidence that they are financially capable of paying for injuries and damages they cause to other people and their properties. You must show that you can pay for injuries and damages you cause to other people and their properties:

• When renewing your vehicle license
• If requested by a law enforcement officer
• When your vehicle is involved in a collision

There are several ways you can show financial responsibility in California. These include having:

• An auto liability insurance policy
• A California Department of Motor Vehicle (DMV) issued insurance certificate
• A cash deposit of $35,000 with the DMV
• A surety bond of $35,000 from a California-licensed business

The DMV may require additional proof of financial responsibility that may include some of the following:

• An identification document from your insurance company
• A California Proof of Insurance Certificate (SR 22) form
• A DMV authorization letter (for cash depositors or self-insureds)
• A Notification of Alternative Forms of Financial Responsibility (REG 5085) form (from car owners registering commercial vehicles for the first time)
• A statement of form (REG 256) to show that a vehicle is registered with the Public Utility Commission or the DMV.

In addition to liability coverage, you can add other coverage plans for maximum protection. For instance, collision, comprehensive, and uninsured/underinsured motorist insurance will protect you against financial losses from personal injuries and pay for damages to the insured car. To get additional information on car insurance requirements in California, visit the Department of Motor Vehicles’ car insurance online service advisor portal.

Before getting car insurance, contact a California-licensed car insurance agent for advice on what coverage options will meet your coverage needs. An agent can also help you come up with the best auto insurance quote in California based on your insurance needs.

NOTE: Read about Motorcycle insurance in California.

How Does Auto Insurance Work in California?

In order to get a car insurance in California - you can:

• Contact a knowledgeable California car insurance agent with access to multiple insurers. The agent analyzes your needs, provides you with multiple competing quotes, and helps you compare car insurance quotes.
• Alternatively, you can look for quotes through online links, personal referrals, and other means.

Once you obtain California car insurance coverage, you must pay premiums regularly in order to maintain the coverage. An insurance premium is an amount you pay to get a car insurance policy. Although most auto insurance carriers in California may prefer bi-annual or annual premium payments, some may allow monthly payments. The amount of financial protection you get depends on your coverage limit. If you file a claim for a covered event, your insurance company will provide coverage after you have paid the deductible for the filed claim. A car insurance deductible is an out-of-pocket payment a policyholder must make as their contribution for covered claims. Before paying for an accident claim, the insurance company will engage the services of an adjuster to verify its authenticity and determine the payout amount based on the contract. The adjuster may request the following information:

• Contact information of the other driver or witnesses to the accident
• Description of the other vehicles involved in the accident (including license plate numbers)
• Photos of the damages resulting from the accident
• Details of injuries

For additional information, contact a California-licensed auto insurance agent to ask questions on how auto insurance works and to get car insurance quotes that may fit your budget.

Can You Get Car Insurance in California Without a License?

Yes, you can get car insurance in California without a license. There may be situations where you need to get car insurance without having to drive. For example, if:

• You have a chauffeur and do not drive
• You are an underage driver
• You have a disability that limits your ability to drive
• You are under a judgment order
• Your license is suspended.

However, getting California car insurance without a valid driver’s license may be difficult and comes with a higher premium because insurance companies consider driving experience a factor in selling coverage to individuals. A suspended license may signal bad driving behavior that might lead to accidents. An auto insurance company in California may sell car insurance to individuals by bypassing some requirements for consideration. For instance, insurers may sell auto insurance to persons without driver’s licenses by listing them as excluded drivers or by listing another individual as the primary driver in the contract.

How Does Car Insurance Work if I am Not at Fault in California?

No-fault insurance pays for certain injuries and damages in an accident regardless of who was at fault for the accident. However, in California, you are responsible for medical treatments and repairs if you hit other people or damage their properties. California financial responsibility law requires all drivers to have proof that they can pay for the bills that come with the injuries and damages they cause to others in an accident. Typically, the at-fault driver’s insurer is liable to pay for treatment of injuries and costs of repairs to properties damaged in the accident. In an accident involving multiple cars, the County or City Police Department will investigate to determine who caused the accident. While waiting for a police report, your auto insurance policy will take care of your medical payments and damages to your vehicle. If the police report shows the other driver is at fault, you (or your insurer) will file a claim against such driver’s insurance carrier for reimbursement.

California car insurance laws mandate car insurance companies to offer non-mandatory uninsured/underinsured (UM/UIM) coverage in addition to the standard auto insurance coverage. In 2019, a total of 1,034 pedestrians were killed in auto accidents in California (a 3.7% rise from the 2018 figure of 997). Also, over a quarter of California drivers do not have insurance, and on average, one of every two car accidents on California roads involves an uninsured driver. Uninsured/underinsured motorist coverage pays for the cost of injuries and damages the insured sustains in an accident involving a driver without (or with insufficient) coverage. In the event of an accident caused by an uninsured/underinsured at-fault driver, UM/UIM will pay for medical treatment and property damage to the insured’s car.

Car Accident Without Insurance - Not At Fault

California is an at-fault state, and drivers are responsible for financial losses that result from the injuries and damages they cause. If you are driving without auto insurance and get involved in an accident that another driver causes, you will not be responsible for the injuries and damages to other people and their properties. However, the court may require you to show an SR-22 certificate as proof of financial responsibility for injuries and damages you may cause in the future. There may be penalties if you do not show proof of insurance, including:

• A fine of $100 to $200 for a first offense, and the court may impound your vehicle
• A fine of $200 to $500 for a second offense, the court may also impound your vehicle

In addition to a fine and impoundment cost, you may also have to pay state fees and a penalty assessment fine. If law enforcement arrests you for driving without car insurance, you may need to contact a California-licensed attorney to represent you in court.

California Auto Insurance Market

With a population of 39.54 million and an estimated 31 million private and commercial vehicles registered in California in 2022, the state has the largest auto insurance market in the world, with a value of around $123 billion. There are over 1,400 insurance companies offering auto insurance in California, including major national players like Farmers, State Farm, USAA, and Allstate insurance. Car insurance accounted for over $37 billion of $96.3 billion worth of P&C direct premiums written in California in 2021. This figure comprises an estimated $31.7 billion and $6 billion for private passenger and commercial auto insurance coverage, respectively. Meanwhile, around 5 million vehicles in the state are either uninsured or underinsured.

Data from the California Office of Traffic Safety showed 3,606 auto crash fatalities in the state in 2019 (a decrease of 5.1% from 2018 figures). Also, 73,280 out of 180,939 vehicles stolen in California in 2020 were auto vehicles. These stats show the need for auto insurance in the state.

Before you buy auto insurance in California, speak with a California-licensed car insurance agent who can help you to come up with a car insurance quote with coverage that will meet your needs.

How Much is Car Insurance in California?

California auto insurance companies and the ones licensed to operate in the state, base the amount they charge as a premium on the insurance company’s rates, which are approved by the California Department of Insurance. Under Section 12959 of the California Insurance Code, the California insurance commissioner must publish and distribute a comparison of insurance rates report. California car insurance cost varies across the state and depends on the factors insurers consider most important in determining the amount policyholders pay for coverage. While taking the state government's proposed rate as a guide, insurance companies in California also consider other important factors in determining the premium for car insurance. These factors include:

• The type and model of the car - The model and type of car you drive may determine how much you pay for coverage because the cost of damage repairs varies for car types and models. Luxury cars cost more to insure because the parts are costly, and you will likely make a high claim if they are damaged or stolen. In addition, newer car models tend to have larger engines and travel faster, thereby increasing the possibility of an accident. The table below illustrates how premiums vary with car types and models.

The annual average cost of car insurance in California based on vehicle types

• Your Age - The driver’s age is a major factor in determining how much car insurance will cost in California. Teen drivers generally pay higher premiums for coverage as outlined in the table below. The reason for the varying rates is that insurance companies consider them more daring, which means they may take higher risks that may lead to accidents. The premium for car insurance in California decreases with an increase in the age of the car owner but begins to increase again from age 65.

  Average annual car insurance premium in California based on age

• Your driving record - In California, your driving history plays a role in determining the amount you pay for your car insurance policy. Individuals with poor driving records pay higher premiums than those without accidents and moving violations for similar auto insurance coverage. The table below shows how an increase in driving tickets, driving under the influence (DUI) convictions, and at-fault accidents increase the amount you pay for auto insurance.

Average annual car insurance premium in California based on driving records

Your driving history may also qualify you for good driver car insurance discounts. You may get between 10% and 30% auto insurance discounts if your driving record is accident-free or if you have no driving violations within a set period. Large insurance companies like State Farm, Allstate, and Nationwide offer good driver discounts from 5% upward to drivers who complete state-certified defensive driving courses.

• Location - Where you live within the state can affect how much you pay for your car insurance. For instance, individuals living in densely populated areas like urban centers pay higher premiums for auto coverage than rural dwellers. This may be due to urban areas' higher risk of accidents and car theft. In a city like Los Angeles, car owners pay higher premiums for coverage as shown in the table due to the higher probability of policyholders filing claims.

  Average annual car insurance premium in California based on location

• The Insurance Company - The cost of car insurance may vary based on the insurance company. California car insurance companies and the ones licensed to operate in the state may choose different criteria for determining premiums, which may cause a difference in rates. It is advisable to get multiple quotes tailored to your auto insurance needs through the help of your California-licensed insurance agent, who can assist you with comparing car insurance quotes and rates.

Average annual car insurance premium of some insurers in California

Californians pay an average of $2,200 yearly for comprehensive car insurance coverage. The amount you pay as a premium may differ from those of others based on some of the determining factors listed above. Insurance companies may offer car insurance discounts if you install safety features that will reduce your risk. For instance, installing an anti-lock brakes system (ABS), electronic stability control (ESC), airbag, seat belts, daytime running lights, and anti-theft system on your car may afford you an auto insurance discount. Likewise, if you bundle your homeowners insurance policy with your auto insurance policy or have multiple cars insured by your insurance company, you may be eligible for a multi policy car insurance discount. You could save money by bundling auto insurance with other policies from the same insurer.

• Coverage type - The cost of your California car insurance is influenced by the type of coverage you buy. Full coverage car insurance costs more than the state-required California car insurance minimum third-party coverage. Your insurance cost also increases with add-ons.
• Mileage - In California, how often you drive your vehicle and for what distance may affect the cost of your car insurance. The more time you spend on the road, the higher the possibility of an accident. Having low mileage may qualify you for a car insurance discount. If you do not drive regularly, you can reduce your premium by signing up for usage-based insurance (if your insurer offers it). Usage-based insurance will base your premium on your driving skills and on how often you drive your car. You will get a cheaper premium if you drive your car less frequently. For instance, Nationwide offers an instant 10% discount to individuals who sign-up for their usage-based program. Your auto insurance premium may increase with mileage, as shown in the table below.

Typical annual increase in California car insurance cost based on mileage

• Deductibles - The amount you choose as your car insurance deductible affects how much you pay for your auto insurance. If you choose a low deductible for coverage, you will pay a higher premium than someone who chooses a higher deductible for similar coverage with the same insurer. However, choosing a high deductible for low car insurance rates means you will have to share a major part of the risk with your insurer.

Residents who can not afford the high premium of car insurance may qualify to get car insurance through the California low income car insurance program, which offers basic liability coverage to California residents who . It is advisable to consult with a California-licensed P&C insurance agent before purchasing car insurance. A state-licensed independent car insurance agent will help you get multiple quotes of cheap car insurance in California, from which you can choose the best car insurance to meet your needs.

Who Has The Cheapest Car Insurance in California?

In 2023, these insurance companies tend to offer the cheapest auto insurance in California:

How Much is Car Insurance in California Per Month?

Car insurance costs in California may depend on factors like your age, driving history, location, car type, and insurer. On average, Californians pay about $2,100 annually or $180 monthly for full car insurance coverage. This amount is higher than the national annual average of $1,800. The amount you pay monthly or yearly for coverage in California depends on the type of coverage you have, as outlined in the table below.

Average estimated monthly California car insurance rates

Before you buy car insurance in California, discuss your needs with a state-licensed auto insurance agent who can help you compare car insurance quotes from different competing insurers. This may afford you access to the cheapest car insurance in California and enable you to choose the insurance quote with the most suitable policy. Always compare at least 2-3 quotes before making the choice.

Why Did My Car Insurance Go Up in California?

In addition to the common factors that California auto insurance companies consider for premiums, your car insurance cost can rise for several reasons. The reason may be:

• Inflation - Data from the U.S. Bureau of Labor and Statistics showed that the Consumer Price Index (CPI) rose by 9.1% between June 2021 and June 2022. This means that consumer spending on goods and services increased by 9.1% over the stated period and led to competition for available goods and services. For instance, the prices of gasoline, new cars, used cars, and gasoline rose by 49.6, 11.8, and 37.3 percent, respectively, between December 2020 and December 2021. In 2022, CPI in the Los Angeles area increased by an additional 7.8 percent, compared with 2021. An increase in consumer spending affects the amount individuals pay for car insurance.

• Speeding Tickets and Driving Under the Influence (DUI) - Speed violations and DUI convictions indicate that you are more likely to be involved in an accident. California is an at-fault state and you pay the medical bills for injuries and the cost of repairs for damages caused to other people’s properties in an accident. The cost of your California car insurance will increase if you cause an accident that your insurance company must pay for.

  According to the Department of Motor Vehicles, DUI arrests and convictions have been on the decline. In ten years between 2008 and 2018, the DUI arrest rate has gone down from 906 to 470 per 100,000 licensed drivers.

• Frequent auto insurance claims - Your premium may go up based on how often you file claims. Most auto insurance carriers in California will increase your insurance premium by up to 20% or more when you file a claim, although this also depends on who caused the accident.

• Adding a new car to your policy - If you add a new car to your car insurance plan, the rate may go up because of the additional risk. New cars are more likely to be stolen than used ones. Adding a new car to your existing policy is cheaper than having multiple separate car insurance policies for all your cars, because, with a multi car policy, you will be eligible for a multi policy discount on your premium.

• Adding more drivers - Adding more people as drivers on your car insurance policy will lead to an increase in its cost. For instance, adding teenagers and family members with poor driving skills to your existing policy can raise the cost of the policy.

• Lapse in coverage - A default in your California car insurance premium payment may affect the amount you pay for coverage. If you want to reinstate your policy after a lapse in coverage, you may have to pay a higher price.

• Change in location - If you moved out of California, you need to get new car insurance in your new state. However, if your new residence is within the state of California, your premium may go up based on the premium rates in that location.

• Reducing your deductible - The amount your pay as deductible may lower or increase the amount you pay as a premium for your California car insurance because it shows the amount of responsibility you are willing to bear. For a low deductible coverage, you will pay a high premium and vice versa.

At What Age Does Car Insurance Go Down in California?

In general, car insurance costs decrease with an increase in the policyholder's age, barring other factors that may influence the premium. However, there is a significant drop in price from age 25.

What Types of Auto Insurance are in California?

There are two categories of auto insurance in California: Private Auto and Commercial Auto Insurance.

Private auto insurance protects you from financial losses associated with the car that you use for private and non-commercial purposes. It combines third-party liability insurance with own-damage insurance for protection against damages to the insured vehicle. However, it excludes coverage for the driver and passengers, unless such coverage is added to or is part of the plan. You can purchase non-owner private auto insurance for protection even if you do not have a car. In California, private auto insurance provides:

• Protection against third-party liabilities
• Protection for the policyholder in an accident
• Coverage against damages to the insured vehicle.

Commercial auto insurance protects California vehicles that are used for business purposes. It protects the business owner against injuries and damages that may result from accidents involving the insured vehicle. With commercial auto insurance, you pay more for coverage because of the increase in car usage, which exposes it to a higher risk of accidents. In California, commercial auto insurance protects those listed as drivers in the policy document and business employees. Business owners in California can also bundle non owners car insurance with commercial auto insurance for protection against financial losses from accidents involving employees who use personal or non-company cars to run errands for the business.

Auto insurance in California can be grouped based on the coverage types into:

PROPERTY DAMAGE (PD)

Property damage is a part of auto liability insurance that pays for damages in the event of accidents. If you are responsible for an accident that damages other people’s properties, PD will pay for the cost of repairs or replacements up to the limit of your coverage. In California, you must have a minimum of $5,000 PD coverage to drive on public roads.

What Does Property Damage Liability Auto Insurance Cover in California?

Property damage liability insurance covers expenses that result from third-party property damages in an at-fault accident. These include:

1. Repairs or replacement of other people’s cars
2. Repairs and replacement of damaged properties
3. Legal costs and fines resulting from lawsuits
4. Loss of income as a result of damages to properties that are means of earning a living
5. Other expenses that are a direct result of an accident

The California auto insurance market has several types of PD liability coverage offering different levels of protection to car owners as outlined below.

• Collision coverage - This coverage protects your car against damages due to collisions with other vehicles or objects. It is an optional insurance policy that repairs or replaces your car in the event of an accident. However, your lien holder may require you to add collision coverage to a comprehensive insurance policy if you lease or finance your vehicle. The amount you pay as a premium depends on the size of the deductible you choose, and the coverage limit extends up to the actual cash value (ACV) of the car. In the event of an accident, collision coverage will pay for repairs or replacement of the insured vehicle only. If you cause an accident in California and do not have collision coverage, your license may be suspended.

• Uninsured motorist/Underinsured Motorist (UI/UIM) coverage - This type of California car insurance combines underinsured and uninsured motorist coverages. UI coverage pays for repairs, or replacement of your car if an uninsured driver hits you. In California, you must have auto insurance or proof that you can pay for damages you cause to other people’s properties while driving. If you are involved in a car accident that is not your fault, the law requires the person responsible to pay for the resulting bills. There are several reasons you need uninsured motorist coverage in California. For example, in situations where:

  • The at-fault driver does not have insurance to pay for damages
  • The accident involves a hit-and-run driver
  • The at-fault driver is excluded from the car’s auto insurance

  If the guilty party does not have auto insurance, UI coverage will pay for the damages up to the limit of your insurance. If the damages exceed your coverage limit, you will have to pay out-of-pocket for the balance. The limit of coverage you may get for uninsured motorist coverage in California is $3,500. However, you may choose to increase this amount within two years of the incidence. Underinsured coverage pays you to repair or replace your car if you are involved in a no-fault accident and the driver responsible does not have sufficient insurance to cover the damages. Although it is not mandatory to have UI/UIM, California law requires insurance companies to offer them to individuals seeking insurance.

• Guaranteed Asset Protection (GAP) - This is optional coverage for individuals who owe money on loans or leases for a new car. If you lease a car and during an accident, it is totaled, and its actual cash value (ACV) is less than your outstanding balance on the lease, your GAP insurance will pay the remaining amount you owe on the lease. The example below illustrates how GAP works:

Your GAP insurance will pay the remaining $1,500 to offset the loan. You need GAP insurance because the value of your vehicle depreciates once you drive it out of the showroom, and your comprehensive, liability, or collision coverage may not offer enough coverage in this situation. In addition, it offers protection against car theft because if your car is stolen, the insurer will still pay just the ACV (regardless of the debt) - unless you have the Car Replacement Feature. In 2021, 194,876 vehicles were stolen in California.

• Comprehensive (also known as other than) coverage - Offers protection against the cost of damages that does not result from collision accidents. Comprehensive coverage covers losses from vandalism, theft, fire, riots, natural disasters, and even damages from animals. It is optional coverage, although it may be required if you lease a car or take out a loan to buy a car. Comprehensive coverage does not give you the option of selecting a coverage limit; the most it will pay is the equivalent of the vehicle’s actual cash value (ACV). Also, you have to pay a deductible for repairs.

• Liability coverage - California car insurance laws require all drivers to have liability coverage. In California, all private vehicles must have minimum property damage liability coverage of $5,000 to pay for damages if the policyholder is responsible for an accident. Your liability coverage will pay for damages that result from accidents you cause. However, it is advisable to get higher than minimum coverage because if the damages exceed $5,000, you will have to pay the difference out-of-pocket. Before you buy liability coverage in California, contact a state-licensed P&C insurance agent for information and advice on what amount of coverage will meet your coverage needs.

• Non owner car insurance coverage (or non-owned auto coverage) - Non owners car insurance is a non-deductible liability-only coverage for people that do not own cars but need protection when driving borrowed or rented vehicles. It is also useful if you do not own a car but need to show proof of insurance (such as an SR-22 certificate). The non-owner policy is inexpensive secondary coverage that kicks in after the car owner’s auto insurance reaches its coverage limit. For instance, if you borrow or rent a car to run an errand and get involved in an accident, the owner’s car insurance will pay for the damages you caused. However, you will be covered by your non-owner coverage if the owner's policy cannot cover all the damages. Most California auto insurance companies do not sell non-owner coverage to vehicles registered or contracted in business because of their high-risk exposure due to frequent usage.

• Parked car coverage (storage coverage) - This protects a car you are not driving for an extended period from damages. Parked car coverage covers theft or damage by:

  • Bad weather
  • An act of vandalism
  • Hail or lightning
  • Earthquake damage
  • Animal-inflicted damages
  • Act of vandalism

  Typically, you do not need collision or liability coverage for an unused car, and for damages to your vehicle while it is parked. Hence, you may have to pay out-of-pocket for repairs if you do not have parked car coverage. Parked car coverage in California is inexpensive and can reduce your car insurance cost by as much as 80%. If you have parked car coverage, you may decide to suspend your auto insurance if your vehicle is in storage and will not be used for a long time. However, if your car is registered in California, you need to have the state’s minimum auto insurance to park it on a public road. Also, parked car insurance will not protect you from hit-and-run accidents if your car is parked temporarily out of storage.

• New car replacement coverage (car replacement assistant CRA) - This is an add-on coverage where the insurer pays for your totaled vehicle more than its actual insured value.

  • Without CRA, if you total your car, you get the depreciated Actual Cash Value (ACV) of the vehicle minus the deductible.

    Example: ACV of the vehicle at the moment of total loss = $20,000. Deductible = $250. The total amount of funds available to the insured to satisfy the loan pay-off and to get into a new vehicle is $19,750

  • With CRA, if you total your car, you will get the ACV plus 10% to 20% more of the ACV amount, minus the deductible.

    Example: The same vehicle with the additional 20% CRA coverage provides the insured with the additional $4,000 to help with paying off the possible loan and providing a downpayment on a new car - which typically removes the need to get GAP coverage.

    $20,000 + ($20,000 x 20%), minus the $250 deductible = $23,750. .

Contact a licensed car insurance agent to get cheap quotes for car insurance in California that will offer you adequate property damage protection.

BODILY INJURY (BI)

Bodily injury is a part of California car insurance minimum liability coverage that protects at-fault drivers from injuries they cause to other drivers, passengers, and pedestrians. As a driver in California, you must have a minimum bodily injury liability coverage of $15,000 for injury or wrongful death of one person and $30,000 for injury or wrongful death of all persons involved in an accident (also known as 15/30 insurance). It is important to note that bodily injury liability coverage does not pay the medical bills of the at-fault driver.

What Does Bodily Injury Liability Cover in California?

California bodily injury liability car insurance:

• Covers medical bills, including medication and the cost of doctor’s visits, physiotherapy, ambulance service, and other health treatment-related costs of third-party accident victims
• Covers long-term medical expenses and also compensation in the event of permanent injuries to other people
• Covers lost wages due to injuries if sustained injuries by third-parties lead to their inability to work
• Pays for reduced earning potential if the accident victim can no longer earn as much as before the accident. It will also pay the bills in situations where victims lose their jobs due to the accident and need to train in a new job field
• compensate for emotional distress that results from the accident
• Takes care of the legal bills that may result from a lawsuit against the at-fault driver

In California, there are several types of auto coverage options that you can choose for protection against bodily injuries. These include:

• Auto liability coverage for protection against third-party injuries and property damages. California drivers must pay for treatment of injuries and repairs of damages they cause while driving within the state. Car insurance laws in California require every driver to have a state minimum liability coverage of:

  • $15,000 for bodily injury per individual in an accident
  • $30,000 for bodily injury for all individuals in an accident
  • $5,000 for property damage per accident

  Failure to have the minimum liability coverage may lead to fines, license suspension, or revocation by the California Department of Motor Vehicles. You also may have your car impounded by law enforcement in an at-fault accident if you cannot show evidence of financial responsibility. In addition, you will have to pay for injuries and damages out of your pocket while facing lawsuits for injuries and damages.

• Medical Payment coverage (MedPay) to pay for the medical bills or funeral expenses (in the event of death) of the driver and their passengers in an accident. It is optional first-party coverage that will protect you and your family members against injuries sustained in an accident, regardless of who caused it. Medical payment coverage pays the medical bills for injuries sustained in an accident. MedPay is not compulsory in California, but insurance companies recommend it because of its advantages, including:

  • Payment for medical bills that are not covered by your health insurance (including copays and deductible)
  • Payment for treatments even if the accident did not occur in California
  • Coverage for out-of-pocket expenses such as ambulance services, dental and prosthetic procedures for accident victims, and paying funeral expenses for the dead in an accident
  • Low yearly premiums
  • No deductibles or copayments
  • No restriction on your choice of a healthcare provider
  • Coverage for you and your immediate family regardless of where you got injured (whether you are driving or onboard a public transportation)

  Although it is not an alternative to standard health insurance, MedPay can provide coverage within the limits of $1,000 to $100,000.

• Uninsured/Underinsured Motorist coverage (UM/UIM) to pay for treatment if you are injured in an accident caused by a driver that does not have auto coverage. UM is an optional coverage you buy for protection of up to the limit of the bodily injury coverage for an individual in your auto insurance ($15,000). Data from the Insurance Research Council shows that in 2019 16.6% of the drivers using public roads in California did not have car insurance. In 2022 numbers, this meant that over 5 million vehicles in California could be uninsured or severely underinsured.

  UI/UIM also protects you against injuries that result from a no-fault accident caused by a driver without liability coverage. Auto insurance carriers in California usually bundle underinsured coverage with uninsured motorist coverage to pay for:

  • Medical treatments for you and your passengers in the event of an accident
  • Property damages resulting from an accident
  • Pains and suffering you may suffer due to an accident
  • Loss of earnings if you are unable to return to work due to an accident.

  Uninsured/Underinsured Motorist coverage will protect you if you are injured by a hit-and-run driver. Hit-and-run drivers do not usually stick around to give details of their liability coverage). In California, if your underinsured coverage is triggered, you must collect the at-fault driver’s insurance policy limit and send proof of the incident to the insurer. Your coverage does not kick in until the at-fault driver’s coverage policy limit is exhausted while paying for your treatment, as outlined in California Insurance Code §11580.2.

  It is important to keep in mind the rules that trigger your underinsured coverage in California. To learn more about how your UIM coverage will protect you, contact a California-licensed P&C insurance agent.

LIABILITY

Liability car insurance (also known as Minimum California Car Insurance) is a type of insurance that protects the policyholder from the financial consequences of bodily injuries and third-party property damages in an at-fault accident. It is mandated by the California car insurance law. You can not drive a car on public roads without auto liability insurance. Before your car is registered in California, you must show proof of financial responsibility that you can pay for the liabilities from at-fault accidents. In addition, you should have the California minimum car insurance liability coverage. The state coverage limits for auto insurance vary for private and commercial vehicles.

In California, vehicle owners must have the following minimum liability car insurance:

Private California Vehicles

• Bodily Injury

$15,000 bodily injury coverage per individual in an accident

$30,000 bodily injury coverage per individual or more in an accident

• Property Damages

$5,000 property damages coverage per accident

Commercial California Vehicles

The minimum liability coverage for commercial vehicles in California ranges from $750,000 to $5,000,000, depending on the number of passengers the vehicle is designed to accommodate. For instance, a 1 - 7 passengers seater will need liability coverage of $750,000 while 8 - 15 passengers seater needs $1,500,000 coverage. Vehicles that can convey 16 or more passengers must have $5,000,000 liability coverage.

In an auto accident, the incurred liabilities may exceed the state-recommended limit. Hence, it is advisable to buy coverage that is above the required limit to avoid having to make up the balance out-of-pocket.

Before you buy auto liability insurance, speak with a California-licensed auto insurance agent to help you compare car insurance quotes from different insurers. A knowledgeable licensed insurance agent will help you to get a car insurance estimate with the right amount of coverage that will meet your needs.

ADDITIONAL CAR INSURANCE COVERAGES

For more comprehensive protection, you may want to combine other coverage plans with your state-mandated minimum California car insurance policy. You can add the following coverage to your California car insurance.

• Car towing and labor coverage. This pays for towing and labor charges if your vehicle is immobile and needs to be moved to a new location. It will save you the worries of how to meet these expenses because some of these charges may be unexpected. Your car insurance may cover some of these charges, depending on your policy type. For instance, comprehensive auto coverage will cover towing charges if a falling object hits your car, but the coverage may not apply if your car breaks down on the highway. In addition, a comprehensive plan may not cover labor charges, hence the need for car towing and labor coverage.

  Without the car towing and labor coverage, towing in California costs $50 - $240 (depending on the distance)

• RideShare coverage. This protects you and your car if you are a driver for car-sharing and/or delivery services like Uber, Lyft, Instacart, and DoorDash. You can bundle rideshare coverage with your private auto insurance. A carsharing company’s policy may cover you if you cause an accident while on a ride. However, such coverage may be limited because they only protect you when you are online (when the rideshare App is on) and have received a transit request to pick up a passenger. Generally, your private auto insurance does not cover business use. RideShare coverage fills the gap left by your car insurance while using your vehicle to convey passengers. It offers protection beyond what is provided by the car-sharing company’s auto insurance policy while in transit to pick up or convey a passenger. This policy provides:

  • Comprehensive and collision coverage for repairs and replacement of the car if damaged or totaled due to an accident
  • Uninsured/underinsured motorist coverage to pay for treatment and property damages if hit by an uninsured or underinsured driver
  • Liability coverage for at-fault accidents
  • Additional coverage including car rental reimbursement and roadside assistance

  If you are among the over 1.3 million Californians who use their own private car to earn money, RideShare insurance may be a good addition to your California car insurance for extra protection. It typically costs between $113 and $205 a month.

• Rental reimbursement coverage. This covers the cost of car renting while your car is under repairs for damages from accidents or perils that your primary car insurance covers. Rental reimbursement pays for car renting up to a dollar limit or rental car’s class (Economy, Standard, Van, Truck, Full Size, etc.) in incidents where your car is damaged and requires repairs or while it is being evaluated for a total loss. It may also cover the cost of renting cars if your vehicle is stolen or vandalized. If you live in an area where public transportation is sparse, rental reimbursement coverage may be a valuable and affordable addition to your car insurance.

  You can add rental reimbursement coverage to your California car insurance only if you already have comprehensive, and collision coverage.

  The average cost of a rental car in California ranges between $30 and $120, based on the class.

• Mechanical Breakdown Insurance (MBI). This pays for unexpected breakdowns that are not due to accidents. MBI minimizes out-of-pocket expenses by paying for repairs not covered by your primary California auto insurance. Coverage typically costs between $100 and $200 per year, depending on your vehicle’s age, annual mileage, and contract length. Mechanical breakdown insurance is usually limited to vehicles under seven years old and vehicles whose mileage does not exceed 100,000 miles. You will be required to pay a deductible for every claim you file.

• Accident Forgiveness Coverage. If offered by your auto insurer, accident forgiveness coverage guarantees that the cost of your California car insurance will not go up, even if you file a claim for an event where you were at fault. Typically, you must be accident-free for several years, in order to qualify for the accident forgiveness feature. If you file a claim and the accident forgiveness feature was used to keep your premium unchanged, the accident-free period timer gets reset.

• Roadside Assistance Coverage. This pays for emergency expenses to get your broken-down vehicle moving again. It could save money by paying for:

  • Towing your car to a garage
  • Labor charges if you need to change your tires
  • Battery repair, replacement, and jump-start
  • Resolving locked out of the car issues
  • Changing flat tires
  • Fuel delivery

  In some policies roadside assistance coverage is included in the Towing & Labor coverage. The typical cost of California Roadside Assistance, Towing, and Labor coverage add-on is $1-$5 per month.

What is the Difference Between Private and Commercial Car Insurance in California?

Private and commercial car insurance in California offers similar coverage. However, there are differences. These differences are due to the factors below.

Speak with a California-licensed car insurance agent for guidance in getting the right protection with adequate coverage for you or your business.

Does Auto Insurance Cover the Driver or the Vehicle?

California auto insurance covers both the driver and the vehicle. Typically, auto insurance follows the car. However, most accidents occur as a result of the driver’s error. If an insured vehicle is involved in an at-fault accident, the car’s liability coverage will pay for the injuries and damages the driver may cause. For instance, if you rent or borrow a car, you are covered by the auto policy on the vehicle. However, if the costs exceed the car’s insurance coverage, your insurance becomes the secondary policy and pays the remainder. Else, you may have to pay out-of-pocket. In addition, the car’s policy also covers family members and friends listed as drivers in the policy contract. For personal injury protection and vehicle repairs in the event of an accident, you can get personalized service by bundling liability coverage with comprehensive and collision coverage for extra protection.

It is a good idea to review your various coverage options before lending your car to friends and family members to have an idea of what your auto claim includes in the event of an accident. Also, individuals who borrow cars frequently can purchase temporary car insurance in California to cover injuries and damages they may cause while driving.

How Does Car Insurance Work When You Get Into an Accident in California?

California is an at-fault state, which means you are liable for the injuries and damages that result from an accident you caused. If you are involved in a car accident, your California car insurance coverage will kick in to cover the cost of injuries and damages you caused. Contact your insurance company immediately, provide detailed information about the accident and file a claim. Your auto insurance company will authenticate the claim by sending a licensed California auto insurance adjuster to assess the damage and the guilty party. If a claim is found to be covered under your policy, the adjuster authorizes the payment for repairs and possibly for replacement of the vehicle, if it is deemed a total loss.

If you are not responsible for the accident, you need to contact your insurance company and provide the necessary information about the accident. In addition, you need to keep a record of vital information that includes:

• Time of the accident
• Date of the accident
• Car type and model
• Vehicle’s registration
• Name of the at-fault driver
• Name of the at-fault driver’s insurance company

You may also need to get the names of witnesses to the accident and the law enforcement officer writing the police report. In an accident involving an uninsured or a hit-and-run driver, your uninsured/underinsured motorist coverage will protect you.

How Much Auto Insurance Coverage Do I Need in California?

The amount of car insurance coverage you need should be sufficient to protect you from financial losses in the event of covered perils. To determine the size of auto insurance coverage that will be adequate, you need to consider several factors. These include:

• The state's minimum coverage

  Car insurance laws in California require all drivers to have 15/30/5 liability coverage on their vehicles to cover injuries and damage in an accident. This means that your minimum California car insurance liability coverage must be:

  • $15,000 bodily injury coverage per individual in an accident
  • $30,000 bodily injury coverage per accident
  • $5,000 property damage coverage per accident

  For commercial vehicles owners in California, the minimum liability insurance coverage differs from those of privately owned vehicles, and ranges from $750,000 to $5,000,000 as outlined in the table below:

• The coverage type you need

  In addition to liability coverage, you may need to add comprehensive, uninsured/underinsured motorist, and collision insurance if you need personal injury protection and repairs to your vehicle in the event of an accident. Also, you may need extra coverage to pay for services like towing or renting a car when your vehicle is unavailable.

• Financial commitments

  If you have a loan or lease repayment on your car, your lender may require you to buy full coverage insurance to protect their asset since the vehicle is not technically yours. If you owe more on the car loan than the car is worth - you will also need GAP coverage.

• Value of the car

  The amount of California car insurance you need also depends on how much the insured car is worth. High-end luxury cars cost more to insure because of the cost of parts and the high risk of insuring them. Expensive cars are more likely to be stolen than less expensive cars.

Note that for adequate protection against liabilities from car accidents while driving, you may need coverage that exceeds California minimum car insurance coverage. Contact a California-licensed auto insurance agent to assess your auto insurance needs. Based on those needs they will recommend the right amount of coverage at the best price available near you.

Does California Car Insurance Cover:

Does Car Insurance Cover Rental Cars in California?

Yes, your California car insurance covers rental cars if you carry collision or comprehensive insurance. Your auto policy will cover the rented vehicle if you or any person listed as a driver is driving it.

However, there are some exclusions to using your California auto insurance for rental coverage:

1. It only applies to private passenger vehicles. The coverage does not apply to commercially registered vehicles
2. Coverage is limited to individuals listed as drivers in the auto insurance contract document
3. It does not cover rentals that exceed 30 consecutive days

Rental car coverage may come with some out-of-pocket payments. You may have to pay a deductible if the car is stolen or damaged in an accident. In addition, the rental agency may demand compensation for loss of earnings (which is not covered by most insurance companies) if you are involved in a collision that leads to the vehicle needing repairs and being out of service. To avoid out-of-pocket payments, you may have to purchase insurance from the rental agency. This type of insurance is called “walk away coverage” because you do not have to pay a deductible in the event of an accident or if the car is stolen.

Can I Use My Insurance When Renting a Car?

Most California car insurance policies cover car rental, so you may not need to buy additional coverage from the rental agency. Insurance provided by rental agencies offers similar coverage to what is covered by your primary auto insurance. If you have full coverage (collision and comprehensive insurance), and a collision occurs while driving a rented vehicle, your car insurance will protect you up to the limit of your coverage. However, if you purchase a “walk away coverage” from the rental agency, you are not liable to pay a deductible in the event of an accident.

Note that your coverage only applies to private vehicles that are not used for business purposes. Check for exclusions in your California car insurance contract before rejecting insurance from a rental agency.

Does Car Insurance Cover Repairs?

Your California car insurance will pay for repairs if you (or anyone listed as a driver in your policy) damage other people’s properties while driving your insured vehicle. However, it will not pay for repairs on your car unless you have collision and comprehensive coverage (full coverage), which will pay for damages due to natural disasters and collision accidents. Your car insurance excludes payment for engine repairs or electrical issues unless you have mechanical breakdown insurance (MBI).

Does Car Insurance Cover Windshield Replacement in California?

Yes, California car insurance will repair or replace your car’s damaged windscreen. If someone damages your windshield, their liability coverage will cover the cost. Your auto insurance will also pay for windscreen repairs if you have collision coverage, comprehensive coverage, glass coverage, or non-owner coverage. However, in some cases, it is better to pay for the repair out-of-pocket if the deductible is higher than the cost of the repair. Also, not making frequent claims may prevent a rise in your car insurance premium.

Does Car Insurance Cover Engine Failure in CA?

This may depend on the nature of the engine failure. Typically, your auto insurance in California will not cover mechanical failure. The reason for this is that vehicle insurance covers unexpected costs like those from accidents and other unforeseen events. A mechanical failure is an expected event due to wear and tear and is not covered by your auto insurance. However, if you have comprehensive, collision, or non-owner insurance, and the cause of the failure is among the covered perils, your insurance will pay for repairs.

Does Insurance Cover Stolen Car?

This depends on the type of California auto insurance you have. If you have comprehensive coverage, the insurance company will cover the cost up to the actual cash value (ACV) minus the deductible you have to pay. However, if you only have the required minimum liability coverage, it will not cover your stolen car.

Does Car Insurance Cover Theft of Personal Items?

No, your California car insurance will not pay for stolen personal items. For the protection of your personal items, you may need to bundle auto and home insurance. You can bundle auto insurance with homeowners insurance or renters insurance. Bundling your California auto insurance with other policies will qualify you for auto insurance discounts and reduce your average annual premium.

Does Car Insurance Cover Water Damage?

Yes, car insurance in California covers water damage if you have comprehensive coverage. Comprehensive coverage will protect your vehicles from water damage due to rain, floods, or storms. It will pay for a replacement if water damage totals your car.

Will Insurance Cover You If You Don’t Wear a Seatbelt?

If you are not wearing a seatbelt and you sustain injuries in an accident, it may affect your claim. California auto insurance companies may deny your claim, and if the auto claim is honored, you may get a limited payment. Also, not wearing a seatbelt in an accident may lead to an increase in your premium. Your seatbelt is a safety feature that protects you from injuries and lessens the cost of your coverage, it also could save lives in the event of an accident.