Vehicle Insurance Laws in California

Are you moving to California, or visiting from out of state? Familiarizing yourself with California’s vehicle insurance laws and regulations is essential!

We’ll dive into the basics here.

What Are California’s Minimum Car Insurance Coverage Requirements?

All vehicles in California — whether parked or on the road — are required to have “financial responsibility.” Financial responsibility typically takes the form of a traditional car insurance policy, but drivers have some other options, too. More about those later.

Drivers opting for traditional car insurance coverage in California need to have, at a minimum:

  • Bodily injury liability coverage of at least $15,000 for one person and $30,000 for more than one person. This covers the costs of medical care and lost wages.
  • Property damage liability coverage of at least $5,000.

Drivers are required to show that they have met these requirements when they register a vehicle with the California Department of Motor Vehicles (DMV).

Car insurance coverage plans represent the most common way to meet this financial responsibility requirement. However, Californians do have other options.

You can make a cash deposit of $35,000 with the California DMV in lieu of car insurance. Remember, however, that this money will be used to cover damage and injury if you are involved in an accident in which you were at fault. Following this procedure, you will need to replenish the deposit.

A DMV-issued self-insurance certificate is also an acceptable substitute for a car insurance policy. This option may be worth considering for wealthy individuals or business owners with a large fleet of vehicles.

Finally, a surety bond from a company licensed to operate in California can also be used as proof of financial responsibility instead of traditional car insurance.

Drivers with questions about these alternative options can contact the California DMV to explore their options.

Are You Subject to California Vehicle Insurance Laws if You Are Visiting From Out of State?

Drivers visiting California are subject to the state’s vehicle insurance laws, as they apply to all vehicles operated on California roads or parked on public property.

It is always a good idea to check how the coverage requirements in a state you visit differ from those in your own state. Even if your state requires the same types of coverage, the amounts you are required to cover may differ.

Having said that, California’s vehicle insurance laws impose very similar minimum coverage requirements as other states. Many states have additional requirements, but it is unlikely that your state requires less coverage than California.

When Do You Have to Show Proof of Auto Insurance?

You are required to show proof of insurance:

  • If a law enforcement officer requests it.
  • When you renew your vehicle registration.
  • In the event that your vehicle is involved in a traffic collision (even if you were not at fault).

This is not just true in California but in other states, too. Make sure you have proof of insurance with you at all times!

What Else Do You Need to Know About California Vehicle Insurance Regulations?

Drivers should know that California’s minimum vehicle insurance (or financial responsibility) requirements are primarily in place to protect other drivers, pedestrians, and the property of others. Meeting the minimum requirements does not mean you have good coverage.

Most drivers will additionally want to carry uninsured and underinsured motorist coverage, medical payments coverage, personal injury liability coverage, and physical damage coverage (for your own vehicle). Some people benefit from roadside coverage, comprehensive coverage (to cover theft, vandalism, and acts of nature), and glass coverage.

If you want to cancel your car insurance in California, it is important to notify the California DMV. Get an Affidavit of Non-Use if you are planning to park your vehicle in your garage and not drive it, and only cancel your insurance coverage once you have done this. Canceling your insurance prematurely can result in your vehicle registration being suspended.

Finally, California residents who are in financial trouble and cannot afford to meet the minimum car insurance requirements in the state may be able to join the California Low Cost Automobile Insurance program. This program allows low-income Californians to access insurance at extremely low rates.