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For more than 50 years, California has had some of the lowest minimum auto insurance requirements in the country. While the old minimum coverage limits helped keep insurance costs low, they often left drivers and accident victims without adequate financial protection. Over the past few decades, skyrocketing repair bills and medical expenses have far outpaced these outdated limits, leaving individuals to cover the difference out of pocket.
On January 1, 2025, California’s minimum liability insurance requirements officially increased, providing better financial safeguards for everyone on the road.
- For Policyholders — You may see changes in your coverage and possibly your premiums as your insurance updates to meet the new limits. While you may pay a bit more, you’ll have better protection against the high costs of accidents.
- For Accident Victims — If you’re injured or your property is damaged, the increased limits mean that there’s a greater chance your expenses will be fully covered, reducing the risk of being left with out-of-pocket costs.
To help you easily understand the changes, here’s a comparison of the old and new minimum liability limits:
| Coverage Type | Old Minimum | New Minimum As of January 1, 2025 |
|---|---|---|
| Bodily Injury/Death (per person) | $15,000 | $30,000 |
| Bodily Injury/Death (per accident) | $30,000 | $60,000 |
| Property Damage (per accident) | $5,000 | $15,000 |
The new limits of 30/60/15 have been established to accommodate the current costs of living and the expenses related to vehicle repairs. This update acknowledges that prices have increased, and the new limits aim to help individuals and families keep up with these higher costs. It’s a necessary adjustment to ensure that people have adequate coverage as expenses rise.
New And Increased Auto Insurance Policy Limits
When it comes to auto insurance, every driver knows there’s a minimum amount of coverage required by law. This minimum coverage ensures that there’s more financial protection for the people involved. However, for decades, California’s minimum auto insurance limits were among the lowest in the nation, a fact that left many drivers dangerously underinsured.
That’s all changing in 2025. Under the new law, Senate Bill 1107, also known as the “Protect California Drivers Act,” signed by Governor Gavin Newsom on September 28, 2022, California is making substantial changes to its minimum auto insurance requirements. This update reflects the rising costs of healthcare, vehicle repairs, and inflation.
While the new limits won’t eliminate the risk of being underinsured, they do provide better safeguards against the steep costs of traffic accidents.
What Does The New 30/60/15 Coverage Mean?
What exactly do the new 30/60/15 limits mean for you? Starting January 1, 2025, California’s new 30/60/15 liability coverage limits mean:
- $30,000 — The highest amount your insurance will pay for bodily injury or death to one person in an accident.
- $60,000 — The maximum your insurance will cover for bodily injury or death to all people injured in one accident.
- $15,000 — The maximum amount your insurance will pay for property damage caused by the accident.
California’s old minimum insurance limits were $15,000 for one person’s injuries, $30,000 for multiple people, and $5,000 for property damage. These amounts often weren’t enough to cover damages in an accident.
Say you’re in a motor vehicle accident, and the total cost is $50,000. Under the old limits, the at-fault driver’s insurance would only cover $30,000, leaving $20,000 unpaid. As the accident victim, you’d be left trying to recover those costs. With the new limits, the at-fault driver’s insurance would likely cover the whole amount, easing your financial burden.
These updated limits will remain in effect for the next 10 years. Additional increases are already set to take effect in 2035, when the limits will rise to 50/100/25, offering even more financial security to keep up with inflation and rising prices.
California’s old insurance minimums often left drivers exposed to financial hardship after an accident. By increasing the coverage limits, the state aims to provide the following benefits for both policyholders and accident victims:
- Better Coverage — Higher limits mean insurance will cover more expenses if you’re in an accident. Policyholders won’t have to pay out of pocket as often, and accident victims are more likely to have their costs fully covered.
- Avoid Financial Trouble — With the old limits, costs often exceeded coverage, leaving drivers personally responsible. The new limits lower this risk, providing a stronger safety net for both policyholders and accident victims.
- Peace of Mind — Knowing that insurance is more likely to cover accident costs, everyone can feel safer and more at ease, reducing financial worries for policyholders and accident victims alike.
While it’s true that higher coverage limits may slightly increase your insurance premiums, the benefits far outweigh the cost. Drivers and accident victims can focus more on staying safe on the road and less on unexpected expenses.
Impact On Policyholders And Accident Victims
Senate Bill 1107 brings significant changes for both policyholders and accident victims in California. Policyholders will face higher premiums due to increased minimum liability insurance limits but with better financial protection. Accident victims will benefit from greater compensation for medical expenses, lost wages, and property damage, reducing the risk of financial hardship after an accident. These changes aim to provide a stronger safety net for everyone on the road.
What It Means For Policyholders
If you have car insurance, you might be wondering if your rates will go up with the new law. Starting January 1, 2025, any auto insurance policies that don’t meet the new minimum coverage limits will automatically adjust when you renew your policy. This means your coverage will get better, but it might also cost you a little more. Here are some of the potential implications:
Higher Premiums For Standard Policies
With the new law raising the minimum coverage limits, many drivers will see their insurance premiums go up. This is because insurance companies will need to offer higher coverage, which can cost more. If you currently have the minimum coverage, your rates will likely increase when your policy renews.
This change applies to all drivers in California who have coverage below the new limits, regardless of which insurance company you’re with. The amount your rates go up will depend on your provider. If you already have more coverage than the new minimums, you probably won’t see much, if any, increase.
The new law affects liability coverage, including uninsured motorist coverage. Even though the state sets a minimum required amount, you can always choose to buy higher coverage if you want more protection.
Higher Coverage May Be An Incentive For Filing Lawsuits
More lawsuits will likely be filed after car accidents now that the coverage levels are higher. When there’s more money available in insurance, it might make accident victims and their car accident claim lawyers more likely to take cases to court rather than settle out of court. The simple reason is that when insurance companies pay out more, it benefits everyone.
If the settlement amount increases, litigation attorneys may have more incentive to pursue lawsuits, as they stand to receive more if they win. This could lead to more lawsuits, which would put more stress on insurance companies and the court system.
Higher Premiums Could Lead To More Uninsured Drivers
Some drivers may not be able to handle their insurance as rates go up because of the new coverage limits, especially for those with low or fixed incomes. This could lead to more drivers being uninsured, which is already a big problem in California.
If you want to be safe in case you get into an accident with someone who doesn’t have insurance, you might want to add Uninsured Motorist (UM) coverage to your policy. This additional coverage will protect you in case the other driver has insufficient or no insurance. It’s a smart move to protect yourself and avoid future costs.
Potential Shift To California’s Low-Cost Auto Insurance Program
The new coverage limits will cause insurance rates to go up, which may be too much for some drivers, especially those with lower wages. For these drivers, California’s Low-Cost Auto Insurance (CLCA) program could become the best option. It’s easier for people who can’t afford regular plans to get insurance through the CLCA because it is cheaper and has lower coverage limits.
Here’s what the CLCA covers:
- $10,000 per person for bodily injury or death.
- $20,000 per accident for bodily injury or death.
- $3,000 for property damage.
This insurance doesn’t cover as much as regular insurance, but the CLCA is meant to help people who need basic coverage at a price they can afford. The CLCA may become the only choice for many people who need car insurance but can’t pay the higher rates because rates are going up.
What It Means For Accident Victims
For people who have been in car accidents in California, the new liability rules are a big win. These changes are meant to help accident victims get the money they are owed after being hurt. Here’s how the increased limits could benefit them:
- Less Financial Burden — Victims who need medical care or vehicle repairs will have less financial stress because their insurance will pay more of the costs.
- Better Coverage For Damages — The new limits mean insurance settlements are more likely to cover all the injuries, property damage, and related costs from an accident.
- Fairer Recovery Opportunities — Insurance companies may be more likely to settle claims properly if the limits are raised. This could help accident victims avoid having to go through financial hardships.
These changes are part of California’s plan to treat everyone on the road equally. They will also help people get the help they need without having to worry about how to pay for it.
Adjusting To Changes In Liability Limits
California’s new liability limits will affect car insurance. If you have higher coverage, your policy stays the same. If you have the old minimum limits, they will update to the new minimums when your policy renews after January 1, 2025. New policies after that date will automatically have new limits. While the updates will happen automatically, you can stay informed about these changes by:
Understanding That It Affects All Policyholders In California
California drivers must meet the new insurance minimums set in the new state law, but these changes do not apply to ongoing lawsuits or incidents before January 1, 2025. If you’re involved in a lawsuit, the previous insurance limits still apply.
To stay informed, reach out to your insurance agent. They can explain how the changes affect you and help you find potential discounts.
Checking Your Coverage
Review your auto insurance policy to make sure it meets the new minimum requirements in California. You’re only covered for the basics if you only have the bare coverage. If something unexpected happens, you might still have to pay for it yourself.
You need to understand your rights as a policyholder and what you’re entitled to. Take time to check that your policy matches your financial needs and the level of risk you’re comfortable with. Also, you should ask your insurance agent if there are any savings or discounts you can get. Your premium might go down if you do things like drive safely, get multiple policies bundled together, or put anti-theft devices.
Additionally, keep in mind that the higher coverage limits could mean higher bills, so you should be ready for possible changes to your costs. If you’re driving someone else’s car, make sure the vehicle has proper coverage and that you’re listed as a permitted driver, or make sure your auto insurance covers you in that situation.
Considering Additional Coverage
Since the minimum amount of car insurance is being raised, now is a good time to think about getting more coverage. Even though you have to meet the new minimums, getting more coverage can protect your finances better.
Uninsured/Underinsured Motorist (UM/UIM) coverage is one choice to think about. It helps pay for your medical bills and car repairs if you’re in an accident caused by a driver who doesn’t have enough insurance or any at all. Without this coverage, you might have to pay these costs yourself.
Also, make sure you always have a printed copy of your most up-to-date insurance in your car. By reviewing your coverage and considering additional options like UM/UIM, you can ensure you’re well-protected on the road.
Frequently Asked Questions
What Is Liability Insurance?
Car liability insurance helps ensure you’re compensated if someone else is at fault in an accident. It covers two main areas:
- Bodily Injury — This covers your medical costs, lost wages, and legal fees if you’re hurt in an accident caused by someone else. It can also pay for pain and suffering or funeral expenses in fatal car accidents.
- Property Damage — This covers the costs of fixing or replacing your property that was damaged in the accident. This usually means damage to your car, but it can also cover things like buildings or fences.
What Does Car Liability Insurance Not Cover?
If someone else is at fault in an accident, here’s what their liability insurance won’t cover for you:
- Repairs To Your Vehicle — You’ll need collision or comprehensive coverage for that.
- Your Medical Expenses — This is where medical payment coverage (MedPay) comes in.
Here’s a breakdown of the other types of coverage that can help pay for these damages:
- Collision Coverage — Covers repairs to your car if it’s damaged in an accident, regardless of who’s at fault. Essential if the other driver’s insurance isn’t enough to pay for your repairs.
- Comprehensive Coverage — Protects your car from non-accident damage like theft, fire, falling objects, vandalism, animal collisions, and weather-related damage.
- Medical Payments Coverage (MedPay) — Helps pay for medical bills for you, your passengers, and family members, regardless of who caused the accident. Covers hospital fees, doctor visits, surgeries, ambulance expenses, and even funeral costs.
What Is Uninsured (UM) Or Underinsured Motorist Coverage (UIM)?
Imagine you’re in an accident, and the other driver is at fault but doesn’t have insurance or doesn’t have enough. This is where UM/UIM coverage comes in to save the day.
If the other driver has no insurance, you could be stuck with all the bills. Even if they have some insurance, it might not be enough to cover all the damage. UM/UIM protects you by covering the costs that the at-fault driver can’t pay. This coverage includes repairs to your vehicle and medical expenses for bodily injuries. Why is it important? UM/UIM steps in to ensure you’re not left financially stranded. It’s a vital safety net to have so you can get the help you need when the other party can’t pay.
How Much Could My Premiums Increase Under The New Law?
On average, drivers pay around $664 annually for minimum liability. According to the American Agents Alliance, premiums are expected to rise after the new auto insurance law takes effect, especially for individuals carrying minimum coverage policies. While policyholders might have to pay more upfront, the added coverage can give them peace of mind and better financial protection if an accident happens.
Is It Worth Increasing My Coverage Beyond The New Minimum Limits?
If you live in a state with a high accident rate, such as California, you might be considering increasing your liability limits. In truth, this could be a smart move on your part. Despite the new minimum coverage limits offering better protection than before, choosing higher coverage can significantly enhance your financial security in the event of an accident.
How Will This Change Affect My Ongoing Auto Insurance Claim?
According to American Jurisprudence, new laws are generally presumed to apply prospectively, meaning they affect actions and events occurring after the law takes effect. As such, California’s new auto insurance law primarily impacts future claims and policies issued or renewed after going into effect on the first day of 2025. If you have an ongoing auto insurance claim initiated before the law’s implementation, it’s unlikely to be directly affected.
Insurance claims are generally governed by the policy terms and legal requirements in place at the time of the accident or claim filing. If your policy is renewed under the new law while your claim is still open, your updated coverage limits may apply to future incidents but not to the current claim.
However, there are some scenarios where the new law might indirectly impact ongoing claims.
For example, there’s a possibility that insurers will adjust how they handle claims as they align with the new requirements. For further clarity on how your specific claim may be impacted, it’s best to consult with qualified car accident lawyers familiar with California’s updated auto insurance regulations.
Have Questions About Your Auto Insurance Policy? Consult With Arash Law
The new auto insurance law in California, effective January 1, 2025, introduces updated minimum coverage limits designed to provide better financial protection for drivers. However, understanding the new auto insurance requirements in California, along with the fine print of your insurance policy, can feel like trying to read a foreign language.
At Arash Law, we’re here to help you make sense of it all. Whether it’s breaking down your compensation coverage or navigating the changes in the law, our attorneys can provide you with the answers you’re looking for. We’ve helped countless auto accident victims secure substantial settlements, so we know our way around the legal web.
Don’t let the new insurance laws leave you guessing. If you have questions or want to explore how this law might affect you, give us a call at (888) 488-1391 or fill out our online contact form. The first consultation is free, and we look forward to helping you.
