California Raises Minimum Insurance Requirements

California is a fault-based car accident state with a pure comparative negligence system.

Under this insurance law, an injury victim may recover compensation for common car accident damages like property damage to a vehicle, medical expenses, lost wages, and pain and suffering by filing a claim against the at-fault driver’s auto liability insurance.

In a pure comparative negligence system, even if a driver contributes to the cause of an accident they may recover compensation minus their percentage of fault.

California requires all drivers to carry at least the minimum requirements for car insurance to protect them from direct liability in an accident, but as of January 1, 2025, this minimum requirement has changed.

It’s important to understand the increased requirements for auto liability insurance in California.

What are the New Requirements for Auto Insurance In California?

California used to follow a “15/30/5” rule for auto insurance liability coverage.

Liability insurance provides coverage for injury victims if the policyholder causes an accident.

The previous requirement covered up to $15,000 per person for injuries, up to $30,000 in injury coverage per accident, and up to $5,000 for property damage coverage.

With today’s high cost of medical care, the previous minimum requirement wasn’t always sufficient, leaving many car accident victims needing legal assistance to recover full compensation for their injuries.

As of January 1, 2025, California Senate Bill 1107 (known as the Protect California Drivers Act) increases the minimum requirement for liability coverage to the following:

• $30,000 per person for injury coverage
• $60,000 in injury coverage per accident
• $15,000 in property damage coverage per accident

This new 30/60/15 rule provides substantially more coverage for car accident victims in California compared to the previous minimum requirement.

Although it’s only now being implemented, the law was passed in 2022 after over 56 years of unchanged coverage requirements led to an inadequate amount of compensation available to car accident victims in California.

With the increased costs of auto repairs and medical expenses, the previous minimum requirement was not enough to cover most claims, leaving car accident victims vulnerable to financial hardship after a serious accident.

How Does This Change Impact California Drivers?

For many drivers, the increase in minimum coverage requirements means a rise in insurance premiums.

While this may seem like an added financial burden, the higher coverage limits provide greater financial protection in the event of an accident.

Drivers who previously carried only the state minimum insurance were at risk of being personally liable for damages exceeding their coverage limits, but the new law helps reduce this risk.

Insurance industry experts estimate that the average cost of a California auto insurance policy will rise by approximately 10-15% due to the increased coverage limits.

However, the actual impact on individual policyholders will depend on factors such as their driving history, age, and location.

How Do California’s Insurance Requirements Compare to Other States?

California’s new 30/60/15 minimum liability coverage brings it more in line with other states that have updated their insurance laws in recent years. For example:

• Texas requires minimum liability coverage of 30/60/25—providing more for property damage.
• Florida, a no-fault state, requires 10/20/10, significantly lower than California.
• New York mandates 25/50/10, slightly below California’s new requirements.

Compared to these states, California’s updated law offers stronger financial protection for accident victims but still falls short of the even higher minimums seen in states like Alaska and Maine, which require 50/100/25.

Do I Have to Add to My California Auto Insurance Coverage?

California drivers do not have to rush to their insurance provider or go online to increase their coverage to meet the new requirement. Instead, when their existing policies renew, their coverage will automatically update to the new minimum requirement.

California’s insurance providers have long recommended that policyholders purchase more than the minimum required insurance due to the threat of personal liability for an accident victim’s damages due to the out-of-date standards for auto insurance in California.

Drivers who carried only the minimum coverage before the increase can expect a slight increase in their insurance rates due to the additional requirement; however, many drivers with additional insurance already in place will not experience a rate increase.

The cost to individual drivers varies depending on their age, driving record, and accident history.

What Happens If You Drive Without the New Minimum Insurance?

Failing to carry at least the new minimum insurance requirements could result in significant penalties, including fines, license suspension, and potential vehicle impoundment.

California law already imposes penalties for uninsured drivers, and with the updated requirements, enforcement efforts may increase.

Additionally, drivers caught without adequate insurance coverage may face challenges in securing affordable policies in the future, as insurers often charge higher premiums to previously uninsured motorists.

Final Thoughts

The increase in California’s minimum insurance requirements is a necessary step in ensuring that accident victims receive adequate compensation for their losses.

While this change may lead to higher premiums, the long-term financial protection it offers outweighs the short-term costs.

Drivers should take this opportunity to review their insurance policies and consider whether additional coverage, such as uninsured/underinsured motorist coverage, could further protect them from unexpected financial burdens in an accident.