California’s 2020 Car Insurance Laws and How They Affect You

Changes to California auto insurance law have given accident victims more options for compensation. 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 being involved 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 vehicle 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 extends 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 most 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
  • Obtain a self-insurance certificate (these are issued by the DMV)
  • Obtain 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. These are currently $15,000 per person and $30,000 per accident, as well as $5000 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, do not get discouraged. You still have options for obtaining compensation: 

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

Another driver is not always at fault for causing an auto accident. If, for example, the vehicle’s brakes failed, liability could fall on the auto manufacturer that installed the defective brake system. Or a construction company might be liable for the accident after negligently leaving tools or materials in the roadway. If a third party is liable, the other driver’s insurance coverage won’t matter. The party at fault has the legal obligation to compensate you for your injuries or losses. It can be difficult to know who is legally responsible for causing an auto accident. This is why it is so important to get legal advice from a professional attorney. 

Health Insurance 

Some auto accident victims 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 receive from the other driver’s insurance company. This is known as subrogation. But 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 from medical bills they cover that were caused by a negligent driver. As you can imagine, these government agencies are especially diligent about finding situations in which they might be entitled to any amount of reimbursement. Be sure to let your auto accident attorney know as soon as possible 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. 


Call Us Today to Schedule a Free Case Evaluation with a California Auto Accident Lawyer

You don’t have to look far to find the right car accident attorney for you. The best personal injury lawyers in California are right here at Arash Law. Our pedestrian accident attorneys have over twenty years of experience. We have collected over 200 million dollars for clients in San Francisco, Riverside, San Jose, San Diego, Sacramento, Sherman Oaks and throughout California.

We can help you access all sources of compensation from all potential defendants so that your legal rights are protected. Call (888) 488-1391or contact us online to schedule your free consultation with an experienced California lawyer for auto accident victims. 

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DISCLAIMER: Information provided on this blog is not formal legal advice. It is generic legal information. Under no circumstances should the information on this page be relied upon when deciding the proper course of a legal action. Always obtain a free and confidential case evaluation from a reputable attorney near you if you think you might have a personal injury lawsuit.

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