California’s Auto Insurance Limits Increasing in 2025

California new laws around auto liability limits

On September 28, 2022, Governor Newsom signed Senate Bill 1107, also known as the Protect California Drivers Act. The law was made to raise the current auto liability limits which, at the time of signing, were the 47th lowest in the country and hadn’t been changed in over 50 years. Due to economic inflation, lawmakers realized it was necessary to make these updates. 

Currently California requires all motorists in the state to carry liability insurance with minimum limits of 15/3/5. Based on this new law, on January 1, 2025, the new minimums will now be 30/60/15. Here’s what that means:^[2]

• $30,000 for bodily injury or death per person
• $60,000 for bodily injury or death per accident
• $15,000 for property damage per accident

For drivers that opt to meet the minimum financial responsibility by leaving a cash deposit with the DMV to cover liability, the current minimum of $35,000 will rise to $75,000 in 2025. 

By increasing these minimums, California drivers will be more likely to have the coverage they need to pay for an accident without going into debt. These new limits will remain in effect for the next 10 years. Then in 2035, the minimums will again rise to 50/100/25.

What are minimum liability requirements?

Liability insurance coverage protects other drivers from bodily injury or property damage you might cause in an accident. Only two states (Virigina and New Hampshire) don’t have minimum liability requirements. You will usually see these minimums expressed as three numbers, for example 50/100/50. Here’s what that  means. The first number covers the amount of bodily injury per person. The second number is the total amount of bodily injury coverage per incident. And the last number is the amount of property damage liability coverage. These numbers only represent the minimum coverage you must carry to legally drive in that state. 

Let’s dig into a little more about what these different coverage types are. 

Bodily injury liability coverage

This covers injuries caused by the at-fault driver. This includes:

• Medical costs related to physical injuries
• Emotional and physical pain and suffering
• Loss of income or diminished earnings capacity due to injuries from the accident

Property damage liability coverage

This covers physical damage to property caused by the at-fault driver. This includes:

• Cost to repair damage to other vehicles
• Cost to repair damaged structures
• Cost to remove debris as a result of the accident

Does liability coverage protect your car?

Unfortunately, no. Liability coverage does not protect your own vehicle from damages. That’s why, in addition to the liability coverage required by the state, you may also want to get some additional coverages.

It’s not required, but a good idea, to add additional collision and/or comprehensive coverage to protect your own vehicle. Collision coverage protects your vehicle from damage caused by a collision whether that’s with another vehicle, a wall or anything else you crash into. Comprehensive coverage protects against other things out of your control, such as weather, theft, vandalism and damage from animals.

What about uninsured motorists insurance?

Uninsured and underinsured motorist insurance are designed to protect you against at-fault drivers who are unable to pay for the damage they call. This could be because they are illegally driving without liability insurance or because even with the minimum coverage, the damages exceed the amounts covered. In these cases, uninsured or underinsured motorist insurance steps in to cover the costs. 

If you live in California and don’t already have these coverages, it might be a good time to add them. With the rising rates due to the increased state minimum coverages, some people may opt to drive uninsured. 

It’s also worth noting that the cost of uninsured or underinsured motorist insurance is usually aligned with state liability minimums. That means if you already have this coverage, you can expect it will go up alongside the new state standards in 2025. 

Wrapping up

If you're a California driver, the amount of insurance you need to carry to legally drive in your state is about to increase. The good news is that if you're in an accident, the amount insurance covers is more likely to line up with the cost for repairs or injuries.