California Car Insurance

Learn the basics about California's car insurance requirements.

There’s no denying it—California was made for hitting the open road. The state’s highways are nothing shy of iconic, with roads that follow the spectacular coastline, the gorgeous High Sierra, or a small town’s charming main drag. 

Of course, the Golden State is a land of laws that are there for good reasons, and buying car insurance in California is essential for protecting your vehicle—and yourself—in case of any trouble on the road. As you shop for auto insurance, take into consideration California’s insurance laws, minimum coverage requirements, and average rates, and be sure to compare quotes before choosing an insurance provider.

What are California auto insurance laws?

Driving without auto insurance isn’t just risky, it’s illegal. You need proof of liability insurance to even register your car, and you must carry proof of insurance coverage with you at all times when driving. If you can’t prove that you have auto liability insurance, you may be subject to fines, a suspended driver’s license, and/or an impounded car.

And if you cause an accident while driving without coverage, the other driver can sue you for damages. If that happens, you could end up paying hundreds of dollars or, if someone is severely hurt, upwards of $100,000* yourself.

What are California's minimum car insurance requirements?

In California, drivers must carry the following minimum auto insurance coverage:

  • Bodily injury liability coverage at $15,000 per person and $30,000 per accident.
  • Property damage liability coverage worth $5,000, in case you hit someone else’s car or property. 

If you’re pulled over, you’re expected to show proof of auto insurance. If you don’t have it with you, you’ll get a ticket. It’s also important to know that your insurance company is required by law to notify the California DMV when you buy auto coverage, as well as if you stop paying your monthly premium.

These are just the minimum requirements in California, but you can always choose to add to your coverage.

For example, California drivers aren’t required to have medical payments coverage (MedPay). But if someone hits your vehicle and splits from the scene, and you don’t have this type of coverage, you may get stuck paying for any medical bills out of your own pocket. 

What are the average rates for car insurance in California?

Auto insurance rates vary based on several factors, like whether you live in a metropolitan area, the type of vehicle you drive, the policy you choose, and your driving record. On average, car insurance in California costs around $148 per month or about $1,780 per year. But your auto insurance quote will be tailored to you. 

Is there a new car insurance grace period in California?

That depends. If you’re buying a new car (high five!), contact your insurance company to ask about its grace period. 

If you already own a vehicle and are buying another car, your insurer likely offers up to a 30-day grace period—but don’t depend on it. (Call your agent to make sure.) If so, your new car will be graced with the same coverage as your most recently insured car on your current policy. Once you’ve added your new wheels to your account, you'll be responsible for paying any difference in your premium. 

If you’re financing the car, keep in mind that your lender may require you to have coverage before you drive it off the lot. Your lender may also require that you carry more coverage than the state minimum. 

What is the California deductible waiver?

The California collision deductible waiver (CDW) is coverage that can waive your collision deductible if you are hit by an uninsured driver. If you’re a driver in California and already carry collision insurance, then you may be eligible for this waiver. So if you get into an accident caused by an uninsured driver, your insurance company will pay your deductible.

Do you know about California’s distracted driving law, or that it can affect your insurance?

You know that distracted driving is dangerous driving, but did you know that if you’re caught violating California’s hands-free driving law twice within a 36-month period, points will be added to your driving record? California passed the AB-47 bill, which took effect July 1, 2021, as another deterrent to talking or texting while driving (unless you’re using a hands-free device). And beyond getting a pricey ticket for violating this law, points on your driving record means insurance costs go up, too.

California driving statistics

Probably no other state is more associated with car culture than California. Decades ago, with the rise of Hollywood and the population boom, city planners—especially in Southern California—designed cities with cars in mind. Soon shopping malls and drive-in restaurants began popping up. 

Californians still love their cars, and they have 170,000 interstate miles—along the sparkling coast, through redwood forests, and into wine country—to roam. But there can be bumps along the way. 

According to SmartAsset’s annual driving study, California ranked fifth for the worst drivers in the country in 2020. California ranks high in both DUI arrests (no. 12 in the nation) and uninsured drivers (no. 11). California drivers were also 1.7 times more likely to Google “speeding ticket” or “traffic ticket” than “gasoline.”

AAA Car Insurance discounts for California residents

In addition to the AAA discounts available to all drivers, California residents can save with these Auto Insurance discounts: 

  • Up to 12.7% discount when bundled with homeowners insurance.
  • Up to 7.5% discount when bundled with renter/condo insurance.
  • 20% discount for new drivers.
  • 20% discount for good drivers.
  • 5% discount for mature drivers.

How to find an agent who knows California auto insurance

Chat with a California insurance agent to learn how you can maximize your savings on auto insurance. And remember, speak to your agent any time you have a change in your life. Whether you move or get a new car, your agent is happy to crunch the numbers and save you money. Find AAA in California.

*Figure based on an average.

Insurance premium does not include the price of Membership. Insurance products in California offered through AAA Northern California Insurance Agency, License #0175868, in Nevada by AAA Nevada, in Utah by AAA Utah, in Arizona through AAA Arizona, Inc., License #8301727, Montana through AAA Montana, Inc., License #9756, and in Wyoming through AAA Mountain West Inc., License No. 172603. The provider of AAA Auto and Home Insurance is CSAA Insurance Group, a AAA Insurer. All policies are subject to policy terms, underwriting guidelines and applicable laws. Multipolicy and other discounts vary based upon eligibility. Discounts not cumulative; certain restrictions apply.