Car Insurance in California

State minimum coverage requirements

Under California Insurance Code Section 11580.1b, all California drivers must maintain the following minimum coverage:

• $30,000 bodily injury per person
• $60,000 bodily injury per accident
• $15,000 property damage per accident

California increased its minimum liability limits effective January 1, 2025, under AB 1107, replacing the previous 15/30/5 minimums that had not been updated since 1967. The law also schedules a further increase in 2035. Driving without insurance in California can result in fines starting at $100 for a first offense and climbing to $200 to $500 for subsequent violations, plus penalty assessments that can significantly increase the base fine. Your vehicle may be impounded, and your registration can be suspended. Proof of insurance must be carried in your vehicle at all times and presented to law enforcement upon request.

Is California a no-fault state?

No. California is an at-fault state.

The driver who caused an accident is responsible for the resulting damages, and injured parties file claims against the at-fault driver's liability coverage rather than their own policy. California applies a pure comparative negligence rule, which differs from the modified fault rules used in states like Texas. Under pure comparative negligence, you can recover compensation even if you were 99 percent at fault in an accident, but your recovery is reduced proportionally by your percentage of fault. If you were 40 percent responsible for an accident that caused you $100,000 in damages, you could still recover $60,000 from the other party's insurer. This rule also has practical implications for at-fault drivers. If another driver sues you after an accident in which you were partially at fault, your insurer may still have to pay a portion of the judgment. Adequate liability limits are important because partial fault does not eliminate your financial exposure, it only reduces the other party's recovery proportionally.

What the state minimum covers and does not cover

California's 30/60/15 liability minimum covers only injuries and property damage you cause to other people. It does not cover:

• Damage to your own vehicle from a collision
• Your own medical expenses after an accident
• Losses caused by an uninsured or underinsured driver
• Theft, weather events, or vandalism to your vehicle

The Good Driver Discount

Under Proposition 103, California insurers are required to offer a minimum 20 percent discount to drivers who qualify as a good driver. To qualify, you must have held a California license for at least three years and have no more than one point on your driving record during that period. A single minor moving violation typically adds one point, while a DUI conviction or an at-fault accident causing injury or death can add two points. The good driver discount is not a promotional offer that carriers can choose to withhold. It is mandated by state law and must be applied automatically if you qualify. Because the discount is tied to your record rather than your loyalty to a particular carrier, switching insurers does not affect your eligibility. If you believe you qualify and your current insurer has not applied the discount, you have the right to request it and to receive a written explanation if it is denied.

Uninsured motorist coverage in California

California insurers must offer uninsured motorist coverage, and drivers may reject it in writing. Given California's at-fault system and the volume of drivers on state roads, carrying UM coverage is a practical choice for most policyholders. If an uninsured driver causes an accident that injures you or damages your vehicle, your UM bodily injury coverage pays your medical expenses and lost wages up to your policy limits, and your UM property damage coverage pays for repairs or replacement of your vehicle. California also allows stacking of uninsured motorist coverage across multiple vehicles on the same policy, which increases the total pool of coverage available in a serious accident. Because California's roads are heavily traveled and the consequences of being hit by an uninsured driver can be financially devastating, rejecting UM coverage should be a deliberate decision rather than a default.

Credit scores cannot be used in California

California is one of a small number of states that prohibits insurers from using credit-based insurance scores when pricing auto policies. Under California Insurance Code Section 1861.02, insurers must base rates on three primary factors: your driving record, the number of years you have been licensed, and your annual mileage driven. Secondary factors such as vehicle type and garaging location may also be considered, but your credit history is explicitly excluded from the calculation. This prohibition has a meaningful effect on rate equity. Drivers in California who have poor credit due to medical debt, job loss, or other circumstances unrelated to their driving behavior are not penalized on their auto insurance. If you have moved to California from a state where credit was used to price your policy, your rate may differ from what you paid previously even if your driving record is the same, simply because that one pricing factor is no longer in play.

Recommended coverage levels

Given California's high cost of living, medical expenses, and vehicle repair costs, most advisors recommend carrying at least 100/300/100 liability. The state minimum property damage limit of $15,000 is particularly low relative to the cost of newer vehicles in California, where a single accident involving a newer SUV or truck can easily result in repair costs that exceed the minimum. If your vehicle is financed or leased, your lender will require collision and comprehensive coverage in addition to liability, and they may specify a maximum allowable deductible. For vehicles you own outright, compare the current market value of your car against the annual cost of collision and comprehensive coverage. Adding gap coverage is worth considering if you recently purchased a new vehicle, as it pays the difference between what you owe on the loan and what the car is actually worth if it is totaled before the loan is paid down.

How insurers determine your rate in California

Because California prohibits credit-based pricing, insurers rely heavily on your driving record, years of licensed experience, and annual mileage when calculating your premium. A clean driving record is the single most effective way to keep your California auto insurance costs low. At-fault accidents and moving violations typically affect your rate for three years. Your zip code is a significant factor as well: urban areas such as Los Angeles and San Francisco have higher accident rates, medical costs, and vehicle theft rates than less dense parts of the state. The vehicle you drive affects the cost of collision and comprehensive coverage based on repair cost, parts availability, and theft frequency. Because California law restricts which factors insurers can use, the price difference between the best and worst available quote for the same driver is often smaller than in states with more pricing flexibility, but comparison shopping still regularly produces meaningful savings.

California Low Cost Auto Insurance Program

California operates the California Low Cost Auto Insurance Program, known as CLCA, for income-eligible drivers who have difficulty affording standard market coverage. The program provides liability coverage that meets the state minimum at a subsidized premium, typically well under $300 per year. To qualify, you must meet income guidelines based on household size and federal poverty level, have a clean driving record for the past three years, own a vehicle valued at $25,000 or less, and hold a valid California driver license. The program is available in all California counties and is administered through the California Department of Insurance. If you are unsure whether you qualify, the Department of Insurance website has an eligibility screening tool that can confirm your status before you apply.