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Changes to California auto insurance laws have given accident victims different options for handling property damage claims. As of 2020, you have the legal right to choose a cash payment instead of getting your vehicle repaired.
Californians also have access to the expanded and updated low-cost insurance program (CAARP). It is important to understand your legal rights after sustaining property damage in an auto accident. It is also important to understand what your financial responsibilities are and what to do if you are hit by an uninsured driver.
2020 Changes Allow Drivers To Choose Cash Payments Instead Of Vehicle Repairs
In the past, some auto insurance companies required accident victims to get their vehicles repaired, rather than simply collecting the money.
Assembly Bill 1538, which became effective on January 1, 2020, prohibits any insurance company from withholding property damage payments if the victim chooses not to have his or her vehicle repaired. Victims still have the right to have their vehicles repaired at the service facility of their choice.
Changes To The California Automobile Assigned Risk Plan (CAARP)
Another important change to the auto insurance law concerns the California Automobile Assigned Risk Plan (CAARP). This is a low-cost auto insurance program that was set to expire on January 1, 2020. Senate Bill 570 extended the program until January 1, 2025. It also removes an existing prohibition on obtaining auto insurance policies for other household vehicles other than the low-cost policy. Other obsolete and prohibited terms (such as using gender as a basis for auto insurance rates) are also removed.
California Law Required Proof Of Financial Responsibility
Like other states, California law requires each and every driver to carry proof of financial responsibility. While the majority of these drivers meet this requirement by paying for auto insurance, this is not the only way to meet the financial responsibility requirement. The California DMV reports that you can also:
- Make a cash deposit of $35,000 with the DMV.
- Acquire a self-insurance certificate (these are issued by the DMV).
- Get a surety bond for $35,000 from a company licensed to do business in California.
If you do choose to purchase auto insurance, it must meet the state minimum coverage requirements. As of 2025, these are currently $30,000 for an injury or death, $60,000 for injury or death to more than one person, and $15,000 in property damage coverage.
What To Do If You Are Hit By An Uninsured Or Underinsured Driver
If you are hit by a person who carries no auto insurance or minimum coverage limits that are not sufficient to pay for your injuries, there are several potential avenues you may be able to explore:
Uninsured And Underinsured Motorist Coverage
Many California drivers choose to add uninsured motorist (UM) and underinsured motorist (UIM) coverage to their own insurance policy. This is an optional coverage that is not required by state law. It can, however, protect you in the event you are struck by someone who has no coverage (or not enough coverage to pay for all your losses).
State law requires liability coverage. This is coverage that applies when you are at fault for causing damage and injuries. UM and UIM claims are based on someone else being at fault for causing the accident. Because of this, your insurance premiums should not increase based on filing a UM or UIM claim. Speak with an insurance agent if you have questions about your premiums.
Third-Party Liability
In some scenarios, another driver is not necessarily at fault for causing an auto accident. If, for example, the vehicleโs brakes failed, liability could fall on the auto manufacturer that installed the defective brake system. Meanwhile, a construction company might be liable for the accident after negligently leaving tools or materials on the road. If a third party is liable, the other driverโs insurance coverage wonโt matter. The party at fault may be legally responsible for compensating you for your injuries or losses, depending on the specific facts of your case. It can be difficult to know who is legally responsible for causing an auto accident. As such, you may wish to seek guidance from a car accident attorney.
Health Insurance
Some auto accident victims may forget about their own health insurance coverage. Your health insurance carrier has an obligation to pay for your medical bills. If medical bills are later found to be the fault of a negligent driver, your health insurance company might have the right to be reimbursed from a settlement you acquire from the other driverโs insurance company. This is known as subrogation. However, the health insurance company still has to cover your bills when they are incurred.
Medicare and Medi-Cal also have the right to be reimbursed for medical bills they cover that were caused by a negligent driver. As you can imagine, these government agencies can be diligent about finding situations in which they might be entitled to any amount of reimbursement. Be sure to let your auto accident attorney know if you are enrolled in any Medicare or Medicaid program.
The state and the federal government have subrogation rights that are protected by law, and these issues must be resolved before you agree to settle your auto accident claim.
Schedule A Free Case Evaluation With A California Auto Accident Lawyer
You donโt have to look far to find car accident lawyers who are ready to review your case. You can consult experienced personal injury lawyers in California right here at Arash Law. We represent clients in San Francisco, Riverside, San Jose, San Diego, Sacramento, Sherman Oaks, and across California.
Furthermore, we can help you identify and pursue other potential sources of compensation as we work to advocate for your legal rights after a car accident caused property damage or personal injury. Call (888) 488-1391 or contact us online to schedule your complimentary initial consultation with a California attorney with experience handling auto accident cases for victims.
