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Home / Auto Accident  / California Increases Minimum Automobile Liability Coverages
California Increases Minimum Automobile Liability Coverages

California Increases Minimum Automobile Liability Coverages

On September 28, 2022, Governor Newsom signed SB 1107, better known as the Protect California Drivers Act, into law. The change comes after the realization that the current liability insurance limits were 46th in the nation, and have not been raised since 1967 when they were first calculated. They also reflect the state’s proactive stance towards protective coverages, as seen in the recent changes to MICRA, which increased compensation for those suffering from medical malpractice injuries.

This statute updates California’s minimum auto insurance requirements to ensure car accident victims don’t incur debt when recovering from injuries caused by negligent drivers. The law also protects drivers if they get into an accident with an uninsured or underinsured driver.

These updated auto insurance limits do not go into effect until January 1, 2025. Nevertheless, it is a good idea to investigate these limits and see how they may affect the compensation you receive after an accident.

When Did Liability Insurance Become Mandatory in California?

The California State Legislature first passed the minimum financial responsibility laws in 1974. Under this law, California drivers were required to carry the following minimum liability coverages in their insurance policies:

  • $15,000 for physical injury or death for one person
  • $30,000 for physical injuries or deaths involving two or more people
  • $5,000 in coverage for property damage to other people’s cars, objects, and structures

This law makes it mandatory for drivers to be responsible for compensating injured drivers and passengers after an accident. When an accident occurs, the vehicle driver must show proof of insurance to the police to cover any damages and injuries.

What Reasons Are Behind the Liability Minimum Increases?

The costs of medical care and vehicle damage have increased since 1974, while California’s minimum automotive liability insurance requirements remained the same. Coupled with economic inflation, lawmakers realized the necessity of increasing coverage for those injured in auto accidents.

The direct costs of motor vehicle injuries in 1975, including medical expenses and hospitalizations, amounted to $4,773,000 in the United States.

In California, the total cost of motor vehicle deaths was $5.83 billion, including $49 million in medical expenses in 2018. Community hospitals recorded an average cost of $14,101 in 2019 for a long-term hospital stay at a national level. These costs exceed the nationwide average for injuries sustained in motor vehicle accidents in 1975, based on outdated minimums.

Under the current minimums, getting into an accident with a negligent driver may leave you with hefty out-of-pocket medical expenses. If you suffer severe injuries that require an extensive hospital stay, rehabilitative services, or long-term medication, your accident-related costs can easily exceed the $15,000 minimum.

How Do the New California Auto Insurance Limits Affect Me?

The Protect California Drivers Act amends the California Vehicle Code 16056, effective Jan. 1, 2025. The minimum liability coverage required under the law will increase to the following amounts:

  • $30,000 for physical injury or death for one person
  • $60,000 for physical injury or death for two or more people
  • $15,000 in property damage coverage

These limits are in effect until January 1, 2035. In 2035, the mandatory minimum liability coverages will increase to:

  • $50,000 for physical injury or death for a victim
  • $100,000 for physical injury or death for two or more victims
  • $25,000 for property damage

These updated coverages ensure more mandatory coverage for auto accident victims who suffer severe injuries because of the other driver’s negligence. Victims will receive sufficient compensation for their medical bills and property damage.

As a result of the law, drivers with minimum liability coverage in their car insurance policies must increase their limits by 2025 and buy additional liability coverage in another ten years.

You can choose to buy higher liability limits than the required state minimum liability for your car insurance policy. Increasing your limits can protect you against bodily injury and property damage claims from other injured drivers and passengers if you are at fault for an accident.

What About My Uninsured and Underinsured Motorist Coverage?

Due to increases in your liability coverage limitations, your uninsured (UI) and underinsured motorist (UIM) coverage must increase to match them. The coverage expansion means you also gain protection in case of an accident with an uninsured or underinsured driver.

However, if your liability coverages exceed the minimum liability coverages, the uninsured and underinsured limits can remain at the statutory minimum limitations:

  • $30,000 for physical injury for a victim
  • $60,000 for physical to or death of two or more victims

For instance, you may want to increase your liability coverages to $250,000/$500,000 in your car insurance. The UI/UIM coverages may remain at the mandatory limits. You may also waive UIM coverage from your auto insurance company.

How Do the New Insurance Minimums Impact My Chances for Compensation After an Accident?

Raising minimum insurance coverage requirements can significantly impact your compensation for injuries suffered in a vehicle collision. If a negligent driver causes your injuries, you can seek damages up to the maximum covered by their insurance policy.

With minimums rising $15,000, $30,000, and $10,000, you can get higher compensation for injuries you or a loved one sustains in a collision.

While these new requirements will increase the minimum available to accident victims, they don’t affect the determination of fault in California. Working with an experienced auto accident attorney is advisable to help determine fault in your accident and help you win maximum compensation under California’s pure comparative negligence statute.

What The Shirvanian Law Firm Can Do For You

If you or a loved one is involved in a car accident in California, you can work with The Shirvanian Law Firm to explore your legal options. We will investigate the circumstances of the crash to determine fault and discover what compensation you may be entitled to under the other driver’s insurance policy.

With changing minimums, it’s crucial to hire an attorney who understands California auto accident cases and can help you navigate your next move after a collision. Contact The Shirvanian Law Firm 24/7 through our contact page or live chat to schedule a free consultation and get started on your case.