California Auto Insurance Requirements
California Vehicle Code Section 16020 requires all drivers to maintain financial responsibility (insurance) at all times. The minimum liability limits are:
$15,000
Bodily injury liability per person injured in an accident you cause.
$30,000
Total bodily injury liability per accident when multiple people are injured.
$5,000
Property damage liability per accident for damage you cause to another's property.
SR-22
Required for certain violations. A certificate of financial responsibility filed with the DMV.
Types of Auto Coverage Explained
Beyond the state minimums, there are several coverage types you should understand when shopping for a policy:
| Coverage | What It Covers | Required? |
|---|---|---|
| Liability (BI/PD) | Injuries and property damage you cause to others | Yes |
| Collision | Damage to your car from a crash, regardless of fault | No |
| Comprehensive | Theft, vandalism, fire, weather, animals | No |
| Uninsured Motorist | Protects you if hit by uninsured driver | Offered — can waive |
| Medical Payments | Medical expenses for you and passengers | No |
| Towing & Labor | Roadside assistance and towing costs | No |
| Rental Reimbursement | Rental car while your car is in the shop | No |
Factors That Affect Your Premium
Insurance companies use many factors to calculate your rate. Understanding these can help you shop smarter:
Driving Record
Accidents, tickets, and DUIs significantly raise your premium. A clean record earns the best rates.
Vehicle Type
The make, model, age, and safety ratings of your car affect collision and comprehensive premiums.
Location
Urban areas like Los Angeles typically have higher rates due to traffic density and theft rates.
Annual Mileage
The more you drive, the higher the risk. Low-mileage discounts are available from many carriers.
Credit Score
In California, insurers cannot use credit scores to set auto insurance rates (unique to CA).
Coverage Levels
Higher limits and lower deductibles increase your premium, but provide stronger financial protection.