California Car Insurance Requirements
California has a lot going for it. Of course we have great weather. We have access to beaches, mountains, and deserts. We have big cities, quiet suburbs, and remote rural communities. We also have traffic. One of the things the state is best known for is our “car culture” – we own 1.25 vehicles per person, and the average Californian drives about 1.5 times as many miles as the average American annually. Considering the importance of driving in our state, it’s no surprise that California car insurance rates are among the highest in the country.
California Car Insurance Requirements
While our department of insurance has the largest budget of any state’s insurance department, California auto insurance regulations are not significantly more stringent than those of other states. As a driver here, you’ll be required to carry liability insurance that meets the following minimums:
- $15,000 bodily injury per person, up to $30,000 per accident
- $5,000 property damage per accident
There is of course additional optional coverage available. While our car insurance requirements do not mandate that you have it, uninsured/underinsured motorist coverage must be offered, and you’ll have to waive it in writing if you decide you don’t want it. Considering that it accounts for almost 15% of California vehicle insurance claims, this coverage is certainly recommended.
If you own your car outright, you can decide whether to carry comprehensive and collision coverage or not. If you’re financing or leasing your car, though, you’ll be required to have this car insurance, in California or any other state. Banks and leasing companies want to ensure that the vehicle will still be paid for in the event that it’s totaled in an accident.
Alternatives to the Rules
Most states require some type of car insurance; California is no different, but as with many states we have another option. Instead of auto insurance, California residents can show financial responsibility in one of a few ways:
- $35,000 cash deposit – Instead of car insurance, California allows drivers to hold at least $35,000 in a savings account to cover expenses related to an accident. You will need to complete an application process, and if accepted you will be required to maintain that $35,000 balance at all times.
- DMV issued Certificate of Self-Insurance – This option is available to those who own a fleet of at least 25 vehicles. You’ll need to demonstrate that you are able to pay judgements of at least the minimum liability requirements.
- $35,000 Surety Bond – Instead of commercial car insurance, California businesses can have a $35,000 surety bond issued by a California licensed surety company.
Special Circumstances
It’s never legal to drive without proof of financial responsibility in California. In fact, there are circumstances where you could need more than just the standard proof of auto insurance. CA drivers who are deemed “at risk” due to certain violations may be required to file an SR-22. Common reasons for this requirement include DUI convictions or license suspension for driving without car insurance. CA motorists will generally need to maintain an SR-22 on file with the DMV for three years following a license suspension.
As a California resident, it’s probably difficult to imagine being without a vehicle. As a state that depends so much on cars, insurance is essential to all of us. Even those rare Californian’s who don’t drive rely on others to have the proper insurance in place, since even a pedestrian can be injured in a car accident. Knowing what’s required and making sure you have it is a duty of every California driver.
Now that you know the basics of California car insurance requirements, request a free car insurance quote from Cost-U-Less and find out how much you can save on your insurance. Cost-U-Less compares rates from dozens of top-rated insurance companies to help you find the lowest California car insurance rates and the best coverage. Request a California auto insurance quote online or over the phone at 800-538-3213.
