California Car Insurance Regulations & Required Coverage

California car insurance regulations require drivers to maintain minimum liability limits of 15/30/5. California auto insurance laws operate under a tort system which mandates that the state is required to name a person at-fault for causing a car accident. The person at-fault, along with their insurance company, is then financially responsible for all damages resulting from the accident. Learn more below.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Nov 10, 2020

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Car insurance is mandatory in California with minimum liability limits of 15/30/5. It is important to maintain the right insurance coverage to protect yourself in the event of an accident. The state follows a tort system but it is still recommended to maintain additional coverage to ensure you are fully covered at all times.

California’s tort system mandates that the state is required to name a person at fault for causing a car accident. The person named at fault along with their insurance company are then financially responsible for all damages resulting from the accident.

Required Coverage

All personal vehicles in California require the following liability coverage requirements:

  • Bodily Injury
  • Property Damage
Minimum California Car Insurance Requirements
Bodily Injury Liability $15,000 / $30,000 Limit
Property Damage Liability $5,000 Limit
Required limits for California Automobile Assigned Risk Plan $10,000 / $20,000 / $3,000

The California Automobile Assigned Risk (CAARP) plan was created to help individuals unable to receive insurance coverage through the normal channels obtain coverage. The CAARP does this by
matching these people with an insurance company that is able to provide insurance coverage for their vehicle.

Recommended Coverage Options

Additional insurance coverage can include:

  • Uninsured / Underinsured Motorist Coverage
  • Comprehensive and Collision Coverage

Uninsured / underinsured coverage covers the costs of damages to you, your passengers or your vehicle in the event that the person found to be responsible is not insured or does not have enough coverage to pay for the resulting damages. This coverage also will pay for damages caused by a hit and run driver.

Collision and comprehensive coverage help fill other gaps in insurance coverage. Collision will help pay for repairs and damages to your car when it is involved in any type of accident.
Comprehensive coverage pays for damages or costs resulting from events other than a collision or accident such as having your car stolen, being damaged by fire or other types of incidents. Cars are stolen every day in California. Some of the most stolen vehicles in California are more likely to benefit from comprehensive coverage but it is still recommended to add this coverage to your policy.

Proof of Insurance and Financial Responsibility

Establishing proof of insurance and financial responsibility

  • Get a standard liability car insurance policy
  • Get a DMV issued self-insurance certificate
  • Make a cash deposit of $35,000 with the California DMV
  • Post a surety bond for $35,000 from a company licensed to do business in California.

Required Documentation

In California, when you purchase a car insurance policy, your insurance agency will automatically notify the DMV electronically. In some cases, you may be required to take additional steps.

Additional documentation showing proof of insurance and financial responsibility can include:

  • A document or ID card from your insurance company
  • If you are self insured or made a cash deposit, an authorization letter from the DMV
  • A California Proof of Insurance Certificate (SR-22)
  • Documents showing that the vehicle is publicly owned or leased (as defined in Government Code 811.2)
  • Form REG-5085 showing that the vehicle is being registered for the first time and is covered by a commercial policy
  • Statement of Facts (REG-256). This provides proof that there is evidence on file with the DMV or Public Utilities Commission pursuant to California Vehicle Code 34630.

You must maintain proof of insurance and financial responsibility and present it:

  • When requested by law enforcement.
  • When renewing vehicle registration.
  • When the vehicle is involved in a traffic collision.

Failure to Maintain Financial Responsibility Penalties

  • Vehicle Registration Suspension (CVC 4000.38) when
    • You cancel a policy and do not obtain a replacement within 45 days
    • You do not submit insurance information to the DMV within 30 days of initial registration or ownership
    • You provide false evidence of insurance to obtain registration
  • Traffic Ticket
    • Not providing proof of insurance to law enforcement can result in a ticket of $1,000 or more
  • Impounded Vehicle
  • Financial Liability in an Accident
    • If you are contribute to or cause a car accident without maintaining insurance or financial responsibility, you may be held personally liable for damages resulting from the accident

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