California’s Auto Insurance Basic Requirements

Before you head out to shop and save on California auto insurance coverage, you should be aware of the fact that this is a regulated industry by the state.  This measure of regulation is not only designed to provide a level of consumer protection when you are looking to find cheap rates, but it keeps the insurance companies on their toes. 

Insurance in the State of California is generally considered rather high.  The cost to maintain your coverage often prevents low income earners in the state to drop their policies. This is particularly true in Southern California where the rates steadily rise to adjust ti inflationary costs and the economics of the insurance business.  However, even though you will find the highest rates here, California’s auto insurance coverage falls within three separate levels of driver protection, each with differing costs.

Below, take a look at the states current prices for the minimum levels of freeway protection.  They are as follows:

$5000 for property liability for each car accident
$15,000 bodily liability injury per person
$30,000 bodily injury liability for each accident

As one can clearly see, each level of costs associated with liability coverage is designed to essentially protect in case of injury to others in the event of an auto accident. If you are found at fault in a freeway accident, the minimum amounts listed are what insurance carriers in the State of California will pay irrespective of how many passengers where in the car at the time of the accident.  This is important to know because if person’s injuries are greater than the level of the minimum policy coverage, the injured person will have the pay any remaining medical costs associated with treatment and recovery.

Minimum Property Damage Liability Coverage

This type of coverage essentially takes care of the repair costs of damages caused by your car when you are found as the cause of an accident. The coverage is exactly what it implies – damages to physical property only. This could include damage to someone’s house or exterior property, lighting fixtures, mail boxes, others cars and anything that is considered a physical object where your auto was involved. If someone files a California auto insurance claim for damaged property against you, and the cost for repairs is greater than the minimal coverage, you will have to pay the difference out of your pocket or risk being sued.

This is one of the biggest reasons to have more than the basic coverage permitted by the state when possible. If your policy covers the basic protections required by California state law, ask your insurance carrier to give you an insurance quote for the next level of protection. It is always better to pay a little higher premium and have affordable protection than it is to find yourself in a jam because your policy does not cover the full costs of property damage.

One strategy that may work for you is to see if you can adjust your deductible rates.  This way, you won’t have to pay higher premiums for auto insurance.  As a general rule, the higher the policy deductible, the lower the premium meaning you can save more money on the cost of your policy, but will have to pay more should you have an accident.