Understanding California Car Insurance Requirements

by: Thomas Ajava

Car insurance is something you must have in California if you want to drive. It is the law. That being said, what exactly are the insurance requirements you have to meet? In this article, we discuss that very thing.

California is a cause state when it comes to car insurance issues. Simply put, this means that a party in an accident must be assigned the responsibility for the accident. The cause can be partitioned, but that is less common. Regardless, the party that is assigned responsibility for causing the accident is on the hook for the cost of repairs and so is their insurance company.

If you are going to drive in California, you need to have insurance to cover any damage you are found to have caused. There are two sets of insurance coverage you must have under the law of the state. The first is bodily injury liability insurance. The second is property damage liability coverage. Let's take a closer look.

Bodily Injury Insurance

Under California law, you must maintain $15,000/$30,000 coverage for bodily injury. As the name suggests, this insurance covers any liability assigned to you for bodily injury to another person. If you drive through a stop sign, hit another car and the other driver is hospitalized, your bodily injury policy will cover their bills. The insurance will cover up to $15,000 of the bills for each event, but no more than $30,000 a year regardless of the total number of accidents you cause.

Property Damage Liability

Under California law, you must maintain $5,000 in property damage liability. This insurance is used to repair any damage you cause to another vehicle. This is not a very high number, so you might want to select a bigger figure to cover you in case you run into a car worth more than $5,000.

At this point, you might be wondering how you buy all this insurance? Most of us just buy one policy and don't really know how it works. Don't worry too much. Under California Law, the insurance companies must bundle these together and sell them as one policy. Put another way, you have this coverage even if you don't know it!

The traffic in California is absolutely insane in many areas. Accidents are common. Make sure you are in compliance with California law so you don't run into problems with the authorities.