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California Car Insurance: Required Coverage


Car insurance is complicated, but having the right insurance is vital. Too many people will accept what their insurance salesman tells them without looking into the facts. Others will purchase only the mandatory required car insurance limits without understanding what that could mean for the future.

The truth is that the average American is involved in a car accident once every ten years. Sure, some of these accidents are fender-benders, but others are serious accidents involving large medical bills. The lowest insurance limits will cover a fender-bender; they will not cover a long hospital stay.

In the next few blog posts, we hope to shed some light on the importance of car insurance. Today, we will discuss what car insurance is required under California car insurance law (California Insurance Code section 11580 1b).

All vehicles in California must have insurance, even if they are just parked on California roadways. This includes:

  • $15,000/$30,000 in bodily injury liability: This insurance covers you if you have injured someone else in a car accident (up to $15,000) or multiple people (up to $30,000). Note: Serious injuries will run much higher than the liability limits. Most insurance companies will recommend $100,000/$300,000.
  • $5,000 in property damage liability: This insurance pays for damage you cause to someone else’s property. Most insurance companies will recommend at least $100,000 of property damage liability coverage.

Failure to carry insurance is against the law and your license may be suspended if you do not submit insurance information within one month (30 days) of initial registration.

It is understandable to be frustrated at the cost of insurance, but do not let that frustration cause you to ignore insurance requirements altogether. The state has insurance requirements to protect the public, not insurance companies. Even if you are the best driver on the road, someone else’s poor driving could lead to a serious accident.

That is why it is important to think twice before purchasing the minimum amount of car insurance. Paying enough today could prevent you from losing hundreds of thousands of dollars in a future California car accident.

Source: California Department of Motor Vehicles, “Insurance Requirements for Vehicle Registration,” 2012