California's minimum liability car insurance requirement is very low in comparison to most states. Drivers must carry at least $15,000 worth of bodily injury liability coverage for anyone they injure, up to $30,000 per accident, and at least $5,000 to cover property damage.
A minor accident could easily exceed these limits, leaving you responsible for any damages not covered by insurance. Consider adding more once you buy a house, start a family, or have savings to protect.
California's Low Cost Auto Insurance program: If you are low income, you may be eligible for the CLCA program, which permits lower liability limits of:
- Bodily injury liability - $10,000 person / $20,000 per accident
- Property damage liability - $3,000 per accident
The low-cost program (rates top out at about $350 a year and are often cheaper) is available to drivers with good records, 19 or older, licensed for three years and for vehicles worth $20,000 or less.
Leaving town? If you have a car that you aren’t going to have on the road, place it under Planned Non-Operation (PNO) status and you can legally drop insurance coverage to save money. PNO status allows your registration to be canceled and insurance to be taken off the vehicle until you are ready to once again drive it.
Your credit is not an issue: California law says it’s unacceptable for your credit score to be a rating factor used by personal auto insurance providers. It also requires that California car insurance carriers calculate rates based on miles driven and driving records before considering your geographic location.
What is a good driver?: Insurance law defines for California car insurance companies who should be given a good driver discount. A person qualifies if he or she:
- Has been licensed for at least three consecutive years
- Has no more than one point on his or her driving record
Drivers that meet these conditions must receive rates at least 20 percent lower than what a non-good driver's rates would be at the same insurance company.
Alternatives to insurance: There are alternative ways to meet California’s financial responsibility law. Instead of obtaining a California car insurance policy you can provide proof of:
- A cash deposit of $35,000 with the Department of Motor Vehicles;
- A certificate of self-insurance issued by the DMV to owners of fleets of more than 25 vehicles; or
- A surety bond of $35,000 obtained from an insurance company licensed to do business in California.