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California Auto Insurance Laws and Regulations

2 minute read

Auto insurance is the only insurance required by law in the United States. However, each state sets its own rules for minimum coverage and penalties for coverage lapses.

California uses what is popularly known as the “15/30/5 rule” for minimum auto insurance coverage. These numbers mean that at all times you must carry $15,000 of coverage for bodily injury/death for an individual, $30,000 for the injury/death of more than one person, and $5,000 coverage for property damage. In addition to minimum coverage, California also has several auto insurance regulations that you must adhere to.

For example, your vehicle must always carry proof of minimum coverage. If you are pulled over on the road and cannot produce documentation that your vehicle is insured by at least the minimum coverage as outlined by the state of California, a number of penalties may ensue, including a $500 fine, court expenses, and vehicle impounding.

Of course, there are certain periods where you will be unable to produce proof of coverage and there are grace periods to allow for this. When you first register your vehicle with the state of California, you are granted 30 days before you need to provide the state with your insurance information. If you cancel or change your current insurance policy, you are granted 45 days before you need to obtain and submit information for replacement insurance. If you pass these deadlines without obtaining auto insurance, your vehicle registration may be revoked and you may incur additional fines. It’s also important to note that insurance companies are required by the California Vehicle Financial Responsibility Law to report auto insurance coverage lapses to the state – so California always knows which drivers are going without insurance.

If you are getting ready to purchase new auto insurance or switch providers, this information is important to remember.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.