California Car Insurance Guide
Whether you’re fighting through traffic on the 405 or taking a scenic cruise along the Pacific Coast Highway, living in California can lead to a lot of time spent behind the wheel. This means that in the nation’s most populated state, it’s important to have quality auto insurance coverage. But how much insurance do you really need? What coverages are required? How much can you expect to spend? We’ll answer all of these questions (and more) below, so sit back, relax, and get ready to purchase a policy with our guide to car insurance in the Golden State.
Personal Auto Insurance
You might think you’re a safe driver and that you can avoid an accident, but with other cars and unseen hazards present on every highway and neighborhood street, an accident can happen to anyone at any time. When car crashes do happen, a personal auto insurance policy provides a financial safety net. Your policy is an agreement between you and your insurance company. You make a payment (or payments) referred to as a premium, and the insurance company you choose agrees to reimburse you for financial losses as agreed upon in your policy. Even small accidents can be quite expensive, so a personal auto policy is a great way to protect yourself and others.
In California, a driver’s policy must meet the minimum liability insurance requirements.
Driving Laws in California
Even if you just took a Driver’s Education course a few years ago, did you know that some of the material you learned might already be outdated? How is that possible? Because laws are repealed, added, or changed on a regular basis. Before you go on any big trip, or just to be informed, check the latest state and local laws from time to time to make sure you’re not inadvertently breaking any rules of the road.
For example, Assembly Bill No. 47 was approved by the Governor in October of 2019, allowing distracted driving violations stemming from electronic devices to count as a point against a driver’s record starting in 2021. If you haven’t checked for updates, you might have missed it!
We don’t want you to end up with any unnecessary points or having to pay any fines or fees, so make sure to run a quick search on new laws on a regular basis.
Minimum Auto Insurance Requirements in California
Like most other states, California requires drivers to have a minimum amount of liability coverage in force, according to the California Department of Insurance:
- $15,000 bodily injury liability coverage (one person)
- $30,000 bodily injury liability coverage (more than one person)
- $5,000 property damage liability coverage
What exactly is liability coverage?
Liability coverage (also called liability only or minimum coverage) protects you financially when you cause an accident. It is generally comprised of bodily injury liability coverage and property damage liability coverage. Bodily injury liability coverage pays for another person’s medical expenses (and possibly your legal expenses) resulting from an accident you cause. Property damage liability coverage usually pays for damages to another person’s car resulting from an accident you caused, but it can also pay to replace a mailbox, fence, storefront, or more.
Are comprehensive coverage and collision coverage not necessary?
Comprehensive coverage and collision coverage are not legally required in California, but if you took out a loan to pay for your vehicle, your lender may require you to purchase these additional coverage options. If you’re in a covered auto accident, collision coverage can come in handy. This type of coverage pays to repair or replace your car after an accident, no matter who is at fault. For example, if you hit a light post while backing up, collision coverage would come to your rescue. Comprehensive coverage is sometimes called “other than collision coverage,” and it provides protection if something other than an accident happens, like if your vehicle is stolen or strikes an animal on a scenic country road.
Penalties for Driving Without Insurance in California
What happens if you’re caught driving without insurance in California? Well, nothing good! According the California Department of Insurance, you will be ticketed if you cannot produce proof of insurance when you’re asked. If you don’t have at least the minimum amount of insurance in force, you can face serious consequences, like the suspension of your license and seeing your vehicle impounded. If you think you can get around the rules, think again! Your insurance company keeps the Department of Motor Vehicles informed on whether you’ve bought coverage or let it lapse. So before you drive without insurance, consider the consequences.
Penalties for Driving Without a Valid License in California
How much trouble can you get in if you’re caught driving without a valid license in California? Well, it depends. Let’s take a look at a few different scenarios.
What if I forgot my wallet, and my license is just at home?
You should always make sure you have your license before you start your car, but we all forget things from time to time. If you have a valid license and merely left it at home, there appears to be some grace, according to Section 12951 of the California Vehicle Code, which refers to a person having their license in their immediate possession at all times when driving a motor vehicle on a highway:
“Any charge under this subdivision shall be dismissed when the person charged produces in court a driver’s license duly issued to that person and valid at the time of his or her arrest, except that upon a third or subsequent charge the court in its discretion may dismiss the charge. When a temporary, interim, or duplicate driver’s license is produced in court, the charge shall not be dismissed unless the court has been furnished proof by the Department of Motor Vehicles that the temporary, interim, or duplicate license was issued prior to the arrest, that the driving privilege and license had not been suspended or revoked, and that the person was eligible for the temporary, interim, or duplicate license.”
So if you forgot your license at home, don’t panic just yet.
What if my license was suspended or revoked?
If your license was suspended or revoked, you can face serious consequences if you’re caught operating a motor vehicle. Chapter 4 of the California Vehicle Code addresses such offenses. You can scroll through for specific circumstances, but driving while your license is suspended or revoked can lead to jail time and serious fines!
Commercial Auto Insurance in California
Do you own a business where you and/or your employees operate motor vehicles for work? If so, you might need to invest in commercial auto insurance. This type of coverage can safeguard your business, big or small, in the event of an accident. A little money now could save you a lot in the long run, and, perhaps, be the difference in your business remaining open or not. According to the California Department of Insurance, commercial policies can be full of complex, specialty coverages, so call an agent to make sure you’re getting the right coverage for your specific needs.
Motorcycle Insurance in California
Wondering what the requirements are for motorcycle insurance in California? Well, they look a lot like they do for other vehicles.
- $15,000 bodily injury liability coverage (one person)
- $30,000 bodily injury liability coverage (more than one person)
- $5,000 property damage liability coverage
Individuals can choose to reject guest passenger liability and uninsured motorist coverage, but those forms of coverage can provide valuable protection for yourself and any passengers on your motorcycle.
Car Insurance Terms to Know
The world of auto insurance is full of confusing terms, and we don’t want that to stop you from getting great coverage. From actual cash value to towing and labor coverage, check out our glossary of key car insurance terms to know. We’re confident it will give you a better understanding of insurance and empower you to choose the right coverage.
SR-22 Insurance in California
What exactly is SR-22 Insurance? Well, to start, it’s not actually a type of insurance coverage. An SR-22 is a certification an insurance company files with necessary state departments to prove you have at least the minimum auto insurance requirements in force. Drivers who are trying to get their suspended license reinstated or those who are forced to comply with a state order are required to keep one on file as proof that they’re maintaining minimum insurance coverage. Here are some reasons you might need an SR-22 filed on your behalf:
- You were convicted on a DUI/DWI charge
- You’ve let your insurance coverage lapse previously
- You’ve committed serious moving violations while driving
High-Risk Auto Insurance
After a certain number of traffic violations, a DUI conviction, or a history of poor credit, some insurance companies will consider a driver “high risk.” These companies may not cover high-risk drivers, or they may make these individuals pay a much higher premium. However, some companies, like Direct Auto, offer non-standard or high-risk auto insurance and work hard to keep the cost down.
So don’t be discouraged if your driving record isn’t perfect. You can still find affordable coverage by shopping around, and by driving safely now, you’ll possibly have more options and maybe save more money in the future.
Uninsured Motorist Coverage in California
Here’s a possible scenario to consider: You’re driving through an intersection when a car runs a stop sign and smashes into the side of your vehicle. You get out to exchange information, and the other driver tells you that they do not have an insurance policy.
It might not seem like a common occurrence, but according to a 2019 study, approximately 16.6% of California drivers are uninsured. With so many drivers uninsured, counting on others to follow the law can be a costly game. Rather than risking it, you might want to add uninsured/underinsured motorist coverage to your policy. This type of coverage will protect you financially if you’re involved in an accident caused by an uninsured driver or if the driver flees the scene.
Insurance companies are required to offer you uninsured motorist coverage in California. If you decide not to purchase uninsured motorist coverage, you’ll be asked to sign a form saying you turned down the offer.
How Are Car Insurance Rates Determined?
If you’ve ever wondered how car insurance rates are calculated, you’re not alone. They’re actually the result of a number of factors, including:
- Your credit history
- The types of coverage and amounts of coverage you choose
- Your driving record
- What type of vehicle you drive
- Where you live and drive