California’s Current Liability Insurance Law
Under Cal. Veh. Code § 16056, all motorists in the state are required to carry minimum liability insurance in at least the following amounts:
- $15,000 for bodily injury or death for one victim
- $30,000 for bodily injury or death for two or more people per accident
- $5,000 in property damage coverage
These amounts were established in 1967 when the law was first passed. While the costs of medical care and vehicle damage have skyrocketed since that time, the minimum liability insurance requirements have stayed the same for decades. At the time the current automobile insurance rates were set, they were meant to cover the costs of care for an accident victim who needed to remain in the hospital for two weeks. Today, $15,000 for an injured accident victim might only cover the cost of an ambulance ride to the hospital, leaving accident victims with tens of thousands of dollars in medical debt for which they might not have a recovery source.
Similarly, cars are much more expensive today than they were in 1967. If someone is involved in an accident caused by a driver who only has insurance meeting the state’s minimum liability standards, $5,000 will likely be insufficient to cover the damages to their vehicle.
California’s minimum insurance requirements are woefully inadequate. If you are involved in a collision with a driver who is underinsured and only has insurance in the required minimum amounts, you might be left without a remedy to cover your losses. Because of this problem, the California State Legislature recently passed Senate Bill 1107, which is known as the Protect California Drivers Act.
Protect California Drivers Act
The Protect California Drivers Act would repeal the current Cal. Veh. Code 16056 and replace it with a new law beginning on Jan. 1, 2025. Under the new law, the minimum required liability coverages would be increased to the following amounts:
- $30,000 for bodily injury or death for one victim
- $60,000 for bodily injury or death for two or more victims
- $15,000 in property damage coverage
Increasing these minimum amounts would help to protect auto accident victims from suffering substantial debt because of the negligence of other motorists. The new law would be effective until 2035 when it would be replaced with an updated version that would again increase the rates. If the law is signed by Gov. Newsom, the minimum required liability coverages would increase to the following amounts beginning on Jan. 1, 2035:
- $50,000 for bodily injury or death for one victim
- $100,000 for bodily injury or death for two or more victims
- $25,000 for property damage coverage
SB 1107 passed both houses of the legislature and was sent to Gov. Newsom on Aug. 24. A review of the legislative updates posted by the Governor’s Office has not indicated that he has signed the bill yet. However, consumer advocates are urging him to sign the bill to protect victims of auto accidents in California.
California’s Insurance Requirements vs. Other States
California’s minimum insurance requirements lag behind those of other states. Because of similar issues, Arizona increased its mandatory minimum liability insurance as of July 1, 2020, to $25,000/$50,000/$15,000. Texas, another large state, requires all motorists to carry insurance meeting the state’s minimum liability requirements of $30,000/$60,000/$25,000. New York’s requirements are also higher than California’s current minimums. In New York, motorists must carry minimum liability coverage of $25,000 in bodily injury and $50,000 in wrongful death damages for one person or $50,000 in bodily injury and $100,000 in wrongful death coverage for two or more people per accident. New York also requires $10,000 in property damage coverage per accident.
While some opponents of the law argue that it is not the right time to mandate increases in the minimum required auto liability coverage because of the state of the economy, it is clear that California’s current low minimum requirements are insufficient and should be increased. Most other states require insurance in higher amounts than California. In a state as large as California, it doesn’t make sense to keep the mandatory minimums so low.
While motorists are only required to purchase insurance meeting the state’s mandatory minimum liability coverage requirements, it is a good idea for you to purchase additional coverage to protect yourself. It’s also important to note that if you only have minimum liability auto insurance, it will not protect you if you are injured or pay for damage to your car following an accident. Instead, it will only be available to pay the damages incurred by another driver when you are at fault in a collision.
All drivers in California should purchase uninsured/underinsured (UM/UIM) coverage. This is optional insurance coverage that insurers must offer at the time you purchase an auto insurance policy. When you have UM/UIM coverage and are injured in an accident caused by someone who only has the state’s mandatory minimum liability insurance, you can file a claim with your insurance company under your UM/UIM policy. Your insurance company will then pay the difference between what the at-fault driver’s policy will pay up to your UM/UIM policy limits.
Other types of coverage that can provide additional protection include comprehensive and collision coverage. Comprehensive coverage pays for damage to your vehicle that occurs other than in an accident. For example, if your vehicle is damaged because of theft, vandalism, or in a storm, comprehensive coverage would pay for the repair costs minus your deductible. Collision coverage would pay for damage to your vehicle in an accident regardless of whether you or the other driver was at fault.
Purchasing these additional coverage might provide you with greater protection if you are involved in an accident. Even though the state requires all motorists to at least carry minimum liability coverage, some drivers fail to purchase any insurance at all. Having UM/UIM coverage can help by paying for your injuries if you are injured in an accident caused by an uninsured motorist, which can help you avoid going into substantial debt from your medical bills.
You can also choose to purchase insurance in higher amounts than what the state requires. This can help to protect others who might be injured in accidents when you are at fault. Having insurance with higher liability coverage amounts can also protect you against damages claims. If your coverage is insufficient, an injured accident victim can pursue a claim against your assets to recover the difference between what your insurance company pays and their losses.
Speak to an Experienced Car Accident Lawyer
California’s low minimum liability insurance requirements have needed to be increased for years. If Gov. Newsom signs SB 1107 into law, it will help by providing more protection to car accident victims. However, since it will not be effective until 2025, it’s important for you to work with an attorney to identify all potential sources of recovery when you are injured in a car accident including involvement in a crash with an underinsured driver. Contact the law firm of Steven M. Sweat, Personal Injury Lawyers, APC for a free consultation at 866-966-5240.