How Does California Car Insurance Work?

Car Insurance Lawyer In Los Angeles / “How Does California Car Insurance Work?” / Auto Insurance Law Blog

Call a lawyer todayTo legally drive on the road in California, having car insurance is a must, but many often confuse themselves with so many different insurances available that they don’t even know which one to get.

And what are some of the requirements of getting car insurance? If you get into a car crash, whose insurer is responsible to pay compensation?

Quick Attorney Reference:

Here at Ehline Law, our attorneys have put together relevant information regarding car insurance to help you get rid of your confusion. For further information, contact us and get in touch with our attorneys.

California Is a Fault State

Unlike many other states, where both party’s auto insurance companies compensate for the loss, California is a different story, as it is a fault state.

A fault state is where the at-fault driver and his or her insurance company are liable for any damages to the other driver.

What If You’re Partially at Fault?

This is where things get a bit interesting. Although California is a fault state, it is also a comparative negligence state, which means that one can partially recover damages even while being at fault partially. The law dictates that the percentage of negligence or fault determines the compensation.

An insurance company will fight for its policyholder and will seek the lowest percentage of fault but still have to pay out according to the percentage of fault.

Minimum Liability Coverage from Auto Insurance Companies in California

You need to carry liability insurance in California to drive a vehicle and that is about it. You also need to meet the minimum policy requirements for different types of accidents.

According to California law, the minimum California car insurance policy requirements are as follows:

  • Property damage – $5,000
  • Injury or death (1 person) – $15,000
  • Injury or death (more than 1 person) – $30,000

The insurer is responsible for covering the lost wages, medical bills, and costs of repair for vehicles when a car accident occurs. This is the type of car insurance coverage you will find with many insurance companies in the state.

There are auto insurance companies that offer greater auto liability insurance than the $5,000, $15,000, and $30,000, minimum insurance policy requirements. However, liability insurance coverage can push premiums up, the higher the coverage, the more you must pay to the insurance company.

Other Types of Liability Insurance Coverages

There are different types of auto insurance coverages. A typical liability insurance coverage will cover you and your vehicle.

However, there are insurance policies where you can cover the driver, the passenger, and even the vehicle in the case of an auto accident.

Individuals can opt for comprehensive insurance for property damage or get uninsured motorist coverage for any injuries.

My Auto Insurance Company Coverage?

There is general confusion on what auto insurance covers. Since California is a fault state, the responsible party and their insurance coverage must give liability coverage to the innocent party in the form of compensations.

after a car accident, auto insurance will typically cover medical bills, property damage, or any other innocent party losses including car passengers. Responsible parties for the accident don’t receive any auto insurance company compensation.

Consequences of Driving Without Insurance


Since it is illegal to drive motor vehicles in California without insurance, depending on the situation the consequences may be severe.

An individual can not register their vehicle at the California DMV without auto insurance. Without holding the right insurance, the California DMV has the right to cancel your vehicle registration, which in most cases, happens.

If you’re caught driving without insurance in California, then you run the risk of losing your vehicle. Authorities will immediately impound your vehicle and also strip you of your license. Such incidents do affect one’s record and can also push premiums up if you’re not careful.

How Can I Protect Myself from Accidents?


If you don’t have any health insurance, it is best to get either of the two:

  • Med Pay
  • Underinsured motorist coverage

Med Pay Coverage

You can add Med Pay coverage to your auto insurance policy to further protect yourself in the case of car accidents. Med Pay coverage is a great insurance plan that pays drivers and the passenger’s medical bills or funeral costs regardless of who was at fault.

If you have Med Pay coverage, you can claim for damages in the following situations:

  • You are a pedestrian and get hit by a vehicle
  • If you’re a passenger in someone else’s vehicle and get injured
  • If you’re riding public transportation and get injured

You can easily get Med Pay coverages from $1,000 to $25,000 but large insurance companies offer even larger coverages for this type of plan.

The best thing about Med Pay plans is that many treatments that are not available in health insurance are available to the policyholders of Med Pay plans.

Uninsured Motorist Coverage

This type of insurance policy covers damages to you and the passenger during a car accident due to another party’s negligence and is the type of insurance you want if you’re ever in an accident with an at-fault party that has a very low policy limit.

Usually, auto insurers incorporate this type of coverage in their insurance plans, however, make sure to ask before getting an insurance plan. If you don’t want this type of coverage, you can easily opt-out of it by signing a waiver which states that you had a choice to get uninsured motorist coverage but you chose not to get it.

Contact a Lawyer If You’ve Had an Accident

There are different laws and rules applicable during a car accident and it can get hectic trying to understand different situations.

For detailed information on car accident rules in California or if you’re looking to get compensation for your loss, contact us at (213) 596-9642.

Our expert attorneys will help you make a claim and protect your rights while getting you the compensation that you truly deserve.

Ehline Law Firm - Personal Injury Attorneys, APLC
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Michael P. Ehline Esq,

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Los Angeles, CA 90071
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