California legislators passed Senate Bill 1107 in 2022 to modify the coverage requirements for minimum liability auto insurance. For the first time since 1967, officials addressed modern economic concerns and rising costs related to car accidents across the state. Yet, the changes that went into effect on January 1, 2025, have both positively and negatively affected regular premium costs and accident claims.
Old vs. New Minimum Coverage
California drivers previously only needed $15,000 in coverage for per-person bodily injury or death, $30,000 for either per accident, and $5,000 for per-accident property damage. Insurers and others referred to this as 15/30/5 minimum liability insurance coverage. In 2025, the amounts doubled to 30/60/15, or $30,000, $60,000 and $15,000, respectively. For now, officials have told Californians that they expect no new changes until 2035, which means that these levels will continue next year. That said, any domestic or international event might force them to reevaluate the minimums and make additional changes in the future.
What Are the Pros and Cons?
Thousands for car accidents occur each day in California. The city of Modesto alone saw more than 1,200 injury causing car accidents in 2023. Car accidents cause property damage and injured parties can incur expensive medical bills.
Victims of car accidents can now receive access to more money than before, which is one reason that SB 1107 is also known as the “Protect California Drivers Act.” The amount of coverage does a better job than in the past at reflecting actual medical rehabilitation and related expenses and vehicle repair costs.
Of course, California drivers must also pay more to maintain the minimum level of coverage. Since many Californians live at or below the poverty level, the bill has increased the risk of people having to choose between paying their auto insurance and other equally important bills like food and rent, especially if they need a vehicle to go to work. The new costs increase the risk of more people driving without any insurance at all.
How Can Low-Income Drivers Stay Legal?
In recognition of the risks, California officials established the California Low-Cost Automobile Insurance Program (CLCA) for drivers who meet specific requirements. This state-sponsored program offers seven plans that reduce some costs for drivers who can’t afford these new changes. A CLCA applicant must be 16 years old or older, possess a valid in-state license and spotless driving record, and own a vehicle that isn’t worth more than $25,000. They must also receive an income that’s 250% or less of the poverty level based on federal standards.
The California Department of Insurance noted in a recent report that they received 34,171 new applications and had 46,175 active policies in 2024, which proves that the CLCA program works. The biggest downside is that it only provides basic 10/20/3, or $10,000, $20,000 and $3,000, coverage. These amounts don’t cover all victims’ needs or even fulfill some county-level requirements.
What About High-Risk Drivers?
Drivers turned away by insurance companies for whatever reasons can sometimes gain access to minimum insurance coverage via the California Automobile Assigned Risk Plan (CAARP). With this program, a CAARP representative facilitates an arrangement between an insurer and a high-risk driver. After the driver receives insurance coverage, they then work toward improving their driving record, reducing the risk, and earning the privilege of access to a standard policy.
Important Extra Protection
The Insurance Research Council (IRC) estimates that 15.4% of drivers nationwide in 2023 didn’t have any auto insurance. That same year, California ranked 8th in the nation for having the most uninsured motorist claims. California ranked higher than even the national average because of an estimated 20.4% of Californians driving without coverage. This percentage doesn’t include hit-and-run or underinsured motorist incidents.
Since far too many drivers aren’t following the laws or protecting each other, many financial and insurance experts recommend that California drivers invest in additional protections. Insurers that offer automobile liability insurance plans also provide access to extra protections, including à la carte or bundled Uninsured and Underinsured Motorist add-ons.