What is liability insurance?
Liability insurance for auto covers the costs associated with injuries or damages you may cause to others in an accident where you are at fault. It is required by law for all drivers in California and consists of two main components:
-
Bodily Injury Liability: This part pays for medical expenses, lost wages, and other costs related to injuries sustained by others in an accident you caused. California's current minimum limits are $15,000 for injury or death to one person and $30,000 for total injuries or deaths in a single accident.
-
Property Damage Liability: This covers the cost of repairing or replacing property damaged in an accident you cause, such as vehicles, fences, or buildings. The current minimum limit is $5,000.
These liability limits are designed to protect other drivers and pedestrians from financial loss due to your actions on the road.
What is changing effective January 1?
Starting January 1, 2025, California's new liability insurance law will raise the minimum required coverage limits.
The key differences between the current California insurance law and the new law going into effect in 2025 are:
-
Minimum Coverage Limits:
-
Current Law: The minimum required liability coverage is $15,000 for injury or death to one person, $30,000 for total injuries or deaths in an accident, and $5,000 for property damage.
-
2025 Law: The new minimum limits will be significantly higher and the new required liability coverage is $30,000 for injury or death to one person, $60,000 for total injuries or deaths in an accident, and $15,000 for property damage. This change is aimed at better protecting consumers and ensuring adequate coverage in accidents.
-
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.
-
-
-
Focus on Consumer Protection:
-
The new law reflects a stronger emphasis on ensuring drivers have enough coverage to address the rising costs of medical care and vehicle repairs, which have outpaced the current minimums.
-
-
Impact on Insurance Rates:
-
With the increased coverage requirements, insurers will have to adjust their pricing structures, leading to higher premiums for those with only the minimum coverage. This shift aims to ensure that drivers can cover potential damages more effectively.
-
What should I do?
As California's new auto liability insurance law takes effect in 2025, it's important to understand how these changes may impact you. With increased minimum coverage requirements, now is the perfect time to review your current policy and ensure you’re adequately protected.
Our team is here to help you understand your current policy and identify any gaps or areas for improvement. Let us provide you with peace of mind and ensure you’re fully protected. Call us for a free review of your current policy and a personalized quote to discuss how these new regulations may affect your insurance needs. We will help you navigate the upcoming changes and find the best coverage options for you.
Don’t wait— let’s ensure you’re prepared!
Contact us for a policy review!
Our experienced team is here to guide you through the updates and ensure you have the right protection.