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, which was significantly updated in 2025 under Senate Bill 1107.
Current California Car Insurance Requirements (2025)
All vehicles in California must have insurance, even if they are just parked on California roadways. As of January 1, 2025, this includes:
- $30,000/$60,000 in bodily injury liability: This insurance covers you if you have injured someone else in a car accident (up to $30,000 per person) or multiple people (up to $60,000 total per accident). Note: Serious injuries will run much higher than these liability limits. Most insurance companies will recommend $100,000/$300,000 or higher.
- $15,000 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.
Important Changes in 2025
California's minimum insurance requirements doubled in 2025 thanks to Senate Bill 1107, also known as the Protect California Drivers Act. The previous minimums of $15,000/$30,000/$5,000 were increased to $30,000/$60,000/$15,000 to better reflect current medical costs and vehicle values.
These new limits will remain in effect until 2035, when they are scheduled to increase again to $50,000/$100,000/$25,000.
Consequences of Not Having Insurance
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.
Why You Should Consider More Than Minimum Coverage
That is why it is important to think twice before purchasing only the minimum amount of car insurance. While the 2025 increases provide better protection than before, serious accidents can still result in costs that far exceed these limits. Paying for adequate coverage today could prevent you from losing hundreds of thousands of dollars in a future California car accident.
Remember: the increased minimums mean higher premiums for many drivers, but they also provide significantly better protection in the event of an accident. Consider this an investment in your financial security.
Source: California Department of Insurance, "New Year Means New Changes for Insurance," 2025; Senate Bill 1107 (Protect California Drivers Act); California Department of Motor Vehicles, “Insurance Requirements for Vehicle Registration,” 2025