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Insurance Minimums Increase for California Drivers


January 16, 2023

California drivers should be aware of recent changes to state law that will have a huge impact on their insurance coverage and rates. Governor Newsome recently signed California Senate Bill 1107 (“SB 1107”) into law, increasing the mandatory minimum liability coverage insurance carriers must provide drivers from $15,000 to $30,000 per injured party. The lowest amount of coverage per crash with multiple injured parties will be $60,000, up from the current $30,000 limit. SB 1107 also raises the minimum property damage limits to $15,000 per accident, up from the current amount of $5,000 for car damage and other loss of property. The bill passed despite intense lobbying on behalf of insurance carriers, which sought to maintain policy minimums at their current levels. SB 1107 does not go into effect until 2025.

SB 1107 will have significant, practical benefits for California drivers. Low coverage limits hurt drivers by failing to adequately compensate them when they were severely hurt in auto accidents, or by forcing them to pay out-of-pocket for expensive car repairs. In simple terms, more coverage means more protection. However, there are critics of the bill too, who argue that the increases in insurance premiums outweigh SB 1107’s benefits. In turn, those critics argue that the increases in premiums may force more drivers to forego insurance entirely and simply drive without insurance.

Overall, SB 1107 is a much-needed change to the current coverage minimums, and moves Californians forward toward a policy minimum that better protects drivers. Too often are drivers, pedestrians, motorcyclists and bicyclists involved in auto accidents where the at-fault driver’s insurance coverage barely, if even, covers their hospital bills. In fact, the last time California increased insurance coverage minimums was in 1977. Thus, SB 1107 brings insurance coverage minimum’s in-line with today’s economic realities.