How Does Auto Insurance Work In California?

Liability insurance is mandatory in California. The minimums are 15/30/5 (some of the lowest in the country), which means $15,000 per injured passenger, but not more than $30,000 for all injured people, and $5,000 for property damage. Higher coverage is strongly encouraged, as the $5,000 is outrageously low if you cause a serious accident, and $30,000 for medical expenses isn’t far either.

California takes driving without insurance seriously. If you get pulled over and are unable to produce some proof of insurance, you are subject to a hefty fine and may also have your car impounded and your license suspended. Consequences are even harsher if you cause an accident – you might even end up in jail if this isn’t your first offense.

The average price for liability insurance in California for 2011 was, according to the National Association of Insurance Commissioners (NAIC), of $1,216, which is quite low if we are to consider that California is one of the richest states in the US.