What Are the Standards for California Car Insurance?

Answer 1

Every driver in the United States is required to own car insurance. However, despite this federal mandate that covers all 50 states, each state has its own car insurance laws. Due to this fact, car insurance standards can actually vary greatly from state to state. One state where this certainly applies is California.

For one, a car insurance policy in California must cover a certain amount of damage. For each person that is harmed in an auto accident, the policy must have the ability to cover up to $15,000 of that person's hospital bills. Per accident, it must cover a total of $30,000 for the bodily injuries created by that accident. In addition to these, the policy must cover at least $5,000 in possible property damage.

These totals may seem high. However, they are actually much lower that the amount of coverage required in other states. California also differs from other states due to the fact it uses a fault system to determine who was negligent and must pay in an auto accident. This differs markedly from the "no fault" systems that are used in many other states.

This fault system uses a legal concept known as "comparative negligence." This means the amount collected from insurance by a person involved in an auto accident is calculated based on what is determined to be that person's level of responsibility for the accident.

For example, if a driver is determined to be 70 percent At Fault for an auto accident, the other driver can collect 70 percent of his or her damages from that driver. Unfortunately for the driver 70 percent at fault, he or she can only recover 30 percent of his or her total damages.

There are also specific penalties for driving without car insurance in California. The first time a driver is pulled over without insurance will result in a fine of $100 to $200 in addition to another penalty to be determined by the court. For multiple convictions, this fine could balloon to $500 before other penalties are added.

In addition to these fines, the driver's vehicle is likely to be towed. The uninsured driver is expected to pay for all towing and impounding expenses. The driver will also have to prove to the court that he or she has the financial means to make payments on the fees and towing expenses before that driver will be given back the vehicle.