How Much Car Insurance Do I Need

How much liability insurance is required for drivers in California? It is important to understand the necessary insurance coverage to drive legally in the state. It is against the law to drive uninsured in the state and there are consequences for those who choose to ignore these laws. Potential consequences of driving without insurance include suspension of your motor vehicle registration, suspension of your driving privileges, and fines. Costs of damages and injuries are also your responsibility to pay if you are involved in an at-fault accident and lack insurance coverage. Accident damages accumulate far more costs than what most of us have lying around to hand over. As such, automobile insurance is required for all drivers in the state.

State-Required Auto Insurance

So, how much insurance is necessary to legally drive in the state? Driver’s must carry what is known as a state-required liability policy. This policy covers costs of damages and injuries caused to another person involved in an at-fault accident up to the policy amount but doesn’t cover injuries or damages to your personal vehicle/passengers. This policy should include $15,000 in personal injury damages for one person with a $30,000max for all injuries and $5,000 in Property Damage coverage. Drivers may opt for higher coverage amounts if they choose. These policy amounts are very low, considering the average car accident in California averages costs of nearly $60,000 when there are injuries.


Proof of Insurance

As part of the Financial Responsibility Act in the state, drivers are required to carry proof of insurance with them at all times and present this proof when requested by a law enforcement official or after an automobile accident, whether at-fault or no-fault. The insurance card is the most popular proof of insurance driver’s keep in their wallet and/or glove box of the vehicle.


How to Avoid Auto Insurance Requirements

If you want to maintain financial responsibility without purchasing auto insurance, you can obtain a certificate of self-insurance from the DMV; obtain a surety bond of $35,000, or place a $35,000 cash deposit in bond with the California Department of Motor Vehicles. Most drivers agree that it is much easier to purchase auto insurance than use one of the alternate options. Drivers in the state pay an average of $1,510 annually to carry state-required insurance, although a plethora of factors impacts the rates of coverage from one person to the next.


Optional Insurance in California

Optional insurance is also available for drivers who seek added protection for themselves in the event of an auto accident. Driver’s are not required by the state to carry this optional insurance, although some dealerships require it before new vehicle purchase. Collision insurance is one of the optional coverages available to drivers. This coverage pays for damages to your own personal vehicle after an accident with another vehicle. Comprehensive coverage pays for damages that occur as result of non-collision matters, including vandalism and weather. Collision coverage and comprehensive coverage are usually sold together. Uninsured/underinsured motorist coverage and Medical Bill Payment are also available.