As of January 1, 2025, California drivers face a major change in auto insurance requirements as the state has increased its minimum liability coverage limits for the first time in decades. These updates are designed to offer greater financial protection for drivers, but they also mean potential cost increases. Here’s what you need to know about the new law, how it impacts you, and what steps to take next.

What’s Changing?

For years, California law required drivers to carry minimum liability insurance of $15,000 per person and $30,000 per accident for bodily injury, plus $5,000 for property damage—often referred to as “15/30/5” coverage. These limits were among the lowest in the country and frequently left accident victims without adequate compensation for medical bills, lost wages, and property repairs.

Under the new law, the minimum coverage limits will double:

• $30,000 per person injured in an accident (up from $15,000)

• $60,000 per accident for bodily injury to multiple people (up from $30,000)

• $15,000 for property damage (up from $5,000)

This increase, known as the Protect California Drivers Act, aims to better reflect the current costs of medical treatment and vehicle repairs.

Why Are These Changes Happening?

The previous limits, set over 50 years ago, are long outdated. In today’s economy, $15,000 barely covers the cost of an emergency room visit, let alone ongoing medical care or rehabilitation. Likewise, $5,000 in property damage coverage is insufficient, given that the average cost of a new vehicle is close to $50,000.

By increasing these limits, California lawmakers hope to reduce the financial burden on accident victims, who often have to sue for additional damages or rely on their own uninsured/underinsured motorist coverage.

How Will This Impact Drivers?

The most immediate impact will likely be higher insurance premiums as insurers adjust pricing to reflect the increased coverage requirements. However, for most drivers, this also means better protection in the event of an accident. With higher liability limits, policyholders are less likely to face lawsuits for damages exceeding their coverage.

For drivers with full coverage or higher liability limits already in place, this change may have little effect. But for those currently carrying only the state minimum, it’s essential to prepare for potential increases in monthly premiums.

What Should You Do Now?

• Review Your Policy: Check your current liability limits to see if they align with the new minimums.

• Compare Rates: Insurers may adjust pricing differently, so shopping around could help you find the best deal.

• Consider Additional Coverage: If you only have minimum coverage, you might want to explore uninsured/underinsured motorist (UM/UIM) coverage or higher liability limits to better protect yourself.

• Plan for Higher Costs: If you’re currently on a tight budget, factor in potential premium increases for your 2025 expenses.

California’s new auto insurance minimums represent a significant step toward better financial protection for all drivers. While premiums may rise, the trade-off is stronger coverage and less financial risk in the aftermath of an accident. If you have questions about how these changes impact your specific policy, contact your insurance provider or reach out to us here at CWC.

For official information, visit the California Department of Insurance’s website here.