If you’re going to drive in California, your vehicle must have insurance. Additionally, insurance companies are required by law to report private-use vehicle insurance information to the California Department of Motor Vehicles. Here’s a quick rundown of everything you need to know about vehicle insurance in California. As always, check the California DMV page for full requirements and regulations.
Minimum Insurance Requirements
California requires the following minimum amount for liability insurance you must have:
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Low Cost Insurance
If you cannot afford insurance, you could be eligible for the California Low Cost Automobile Insurance Program. This gives income-eligible drivers a way to get insurance at an affordable price.
Insurance Discounts in California
California is very kind to those it considers “good drivers.” Those who meet certain criteria for good driving can receive at least a 20 percent discount on their auto insurance premium. In order to qualify, you have been licensed to drive for the past 3 years, and in those past 3 years have not:
- Had more than 1 point on your driving record due to a violation(s)
- Taken traffic school because of a traffic violation more than once
- Been the at-fault driver in an accident that resulted in injury or death
Also note that according to Prop 103, enacted in 1987, it is illegal for insurance companies in California to use your credit history as a factor in determining the cost of your premium. However, there are other factors that will affect your premium, which include:
- Make/model of your car
- Driving record
The California Automobile Assigned Risk Plan
If you cannot find an insurance company due to a poor driving record, you can apply for insurance through the California Automobile Assigned Risk Plan (CAARP). All California insurance companies must accept a certain amount of CAARP applicants according to their share of the market. Once you have maintained a clean driving record for three consecutive years, you will be eligible to purchase car insurance outside of the CAARP.
Finding car insurance in California
When looking for car insurance in California, it’s important to consider the type of driver you are, and what discounts and bundles you could qualify for. Doing the research and legwork into the various options can end up saving you a big chunk on your insurance bill.
According to this 2018 NerdWallet study, here are the best car insurance options for the following types of drivers:
Good drivers (no at-fault accidents, DUIs or moving violations):
- Esurance (cheapest)
Young drivers (drivers in their early 20s):
- Geico (cheapest)
Drivers with one at-fault crash:
- Esurance (cheapest)
Retired (drivers in their mid-to-late 60s):
- 21st Century (cheapest)
Low-mileage drivers (drivers who travel less than 5,000 miles or less per year):
Drivers with a military connection: