California’s minimum auto liability insurance requirements increased starting Jan. 1, 2025. Here’s what you need to know about the changes and what they mean for you.

Senate Bill 1107: Raising Auto Liability Limits in California

Auto liability limits in California increased due to Senate Bill 1107, which requires all drivers registering their cars in California to comply with the state’s new auto liability limits. The new mandatory minimums are: 

  • $30,000 for injury or death to one person per accident
  • $60,000 for injuries or death to all drivers and passengers involved in a single crash
  • $15,000 for property damage

Liability insurance only covers injuries and property damage you cause in a crash. It does not cover your injuries or damaged property, though other types of optional coverage can help with these costs.

Why Did California Change Its Auto Insurance Coverage Requirements?

California legislators raised the minimum liability requirements for auto insurance to address the rising costs of car accident claims and better protect accident victims. Lawmakers say that medical expenses, vehicle repair costs, and other claim-related expenses have significantly increased over the years, making the previous insurance limits outdated. The old minimums often left injured parties with insufficient compensation for their losses, forcing them to cover expenses out of pocket.

Lawmakers also noted that inflation reduced the value of the old limits, further exacerbating financial shortfalls for injured people. The new insurance requirements aim to ensure drivers have adequate protection and reduce the financial strain on individuals affected by car accidents.

How Will Increased Insurance Minimums Affect California Drivers?

The precise effects of the new minimum insurance requirements remain to be seen, but some outcomes seem likely. The most noticeable change for many drivers will be higher premiums as insurance companies adjust their rates to reflect the additional coverage requirements. While these premium hikes might raise costs for drivers, the change also provides greater financial protection in the event of a car crash. Hopefully, the increased coverage amounts balance out the premium increases.

The most encouraging news is that injured drivers and passengers can now pursue additional compensation for their medical bills, property damage, and other losses after a collision. Compensation in a car accident lawsuit cannot exceed the policyholder’s limits. Since the requirements are higher, the potential to recover more money increases.

Impact on Uninsured and Underinsured Motorist Coverage

In California, an insurance policy’s uninsured motorist bodily injury coverage (UM) is the same as its liability bodily injury coverage, so drivers will also see an increase in UM limits. UM/UIM insurance covers the policyholder when the at-fault driver is uninsured or lacks sufficient insurance.

The upside of these changes is that the increase in auto liability insurance provides additional protection for motorists if a severe collision occurs. Since 17 percent of California drivers lack insurance, this increase could be a safety net for accident victims, allowing them reimbursement for serious auto accident injuries through their own coverage.

Note: Uninsured or underinsured motorist coverage (UM/UIM) is not mandatory in California and must be rejected in writing. Though it is optional insurance, the car accident lawyers at Demas Law Group strongly recommend purchasing UM/UIM to protect yourself if the worst happens.

What Drivers Need To Do To Stay Compliant

You don’t have to do anything if your auto insurance policy already meets the new minimum requirements. Just bring proof of your insurance coverage when you renew your vehicle registration, as you need documentation that your policy meets the new rules to register your car.

If your existing auto insurance policy didn’t meet the new liability coverage limits, its limits will be adjusted at the time of renewal, on or after Jan. 1.  Check with your car insurance agent to ensure your policy complies with the new law. You don’t want to face legal problems if you’re in a crash and the authorities believe you caused it.

Penalties for Non-Compliance

California law requires drivers to present proof that their liability insurance meets state requirements when registering or renewing their car. Therefore, drivers without sufficient liability insurance will have their registrations denied, meaning they can’t legally drive their vehicles.

Drivers without adequate auto insurance could also face additional penalties if the police catch them. State law says the fine for driving without sufficient liability insurance is at least $100 for a first offense. However, the state can also impose additional assessments that may significantly increase the overall financial penalty. The fines for driving without sufficient liability insurance increase considerably for repeat offenses, and the court could order the impoundment of your vehicle.

Can Other Types of Auto Insurance Coverage Help If I Get Hurt in a Crash?

Add-ons to your auto insurance policy can make a massive difference if you get hurt in a crash. Additional coverage includes:

  • Medical payments coverage (MedPay) – Optional coverage that pays for your medical expenses from a collision regardless of who caused the crash
  • Collision insurance – For damage caused by physical contact to your car by another vehicle or road hazard, regardless of fault

California doesn’t require you to have MedPay or collision coverage, but they’re worthwhile add-ons to your policy if you can afford them.

Contact Our Sacramento Auto Accident Lawyers Today

While the increase in California’s auto insurance liability minimums should help crash victims, there’s no guarantee the other driver’s insurance company will honor your claim if you suffer injuries in an accident. The best way to protect your rights is by contacting a trusted personal injury law firm for advice.   

Demas Law Group is an established Sacramento firm with over 25 years of experience successfully representing injured Californians in a broad range of motor vehicle accident claims. To learn your legal rights after a crash, contact us for a free consultation with a car accident attorney in Sacramento.