Thanks to a new law, starting Jan. 1, 2025, California is increasing the minimum liability coverage levels that drivers in the state will be required to have on their auto insurance policies.
The new minimums, double current levels, are meant to keep up with inflation, particularly the cost of car repairs and medical costs. While the minimums have long needed to be increased(they’ve been in place since 1967, amazingly), they may still not be enough if a driver is found at fault in an accident with a modern vehicle.
Here are the new levels as of the start of 2025:
- $30,000 for injury/death to one person, up from $15,000.
- $60,000 for injury/death to more than one person, up from $30,000.
- $15,000 for damage to property, up from $5,000.
The minimum coverage requirements will increase again on January 1, 2035, to:
- $50,000 for bodily injury or death per person,
- $100,000 for bodily injury or death per occurrence,
- $25,000 for property damage.
Why the change?
Backers of the legislation that increased the new minimum liability levels said the change was necessary due to surging costs of:
The new statutory limits are designed to ensure that individuals involved in accidents have sufficient coverage to meet the cost of vehicle repairs, medical expenses and other accident-related costs if they are at fault in an accident.
The new limits also reflect the fact that even minor accidents can result in significant repair costs, particularly in vehicles loaded with new technology.
The takeaway
If you are currently insured for the minimum levels required by the state, you should consider
increasing your liability beyond the new 2025 minimums, which also may not be enough in case of an accident. If you are found at fault in an accident and the claim costs breach your policy limits, you will be responsible for the rest, which you’d have to pay out of pocket.
You could be in a sticky situation if you crash into a luxury vehicle or if the victims need significant medical care as a result of the accident.
But if you do want to keep the legal minimum, you’ll likely see your premiums increase along with the new levels.
We can work with you to compare rates with other insurers to see if there is better pricing out there. If you are seeing higher rates, you can also consider increasing your comprehensive and collision deductibles, or even eliminating these coveragesaltogether on any older vehicles that you have paid off.
These strategies can help offset the premium increases associated with higher liability limits.