Minimum Coverage Requirements
California law requires all drivers to carry liability insurance that covers bodily injury and property damage. For a vehicle financed in 2017, the minimum limits are:
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- Bodily injury: $15,000 per person, $30,000 per accident
- Property damage: $5,000
Additional Lender‑Required Coverage
Financing companies typically demand higher coverage to protect their investment. Common lender‑required policies include:
- Collision coverage: 100% of the vehicle's current market value
- Comprehensive coverage: 100% of the vehicle's current market value
- Gap insurance: Covers the difference between the car's value and the loan balance if totaled
Proof of Insurance and Policy Limits
When you sign the loan documents, the lender will ask for proof of insurance that meets the stated limits. The insurance card must display the policy number, coverage limits, and the insured's name. If you change coverage, notify both the insurer and the lender to avoid default.
How to Verify Compliance
Use the California Department of Insurance's online tool to confirm your policy meets state and lender requirements. You can also request a compliance letter from your lender's finance office, which summarizes the required coverage.
Potential Penalties for Non‑Compliance
Driving without the mandated coverage can lead to license suspension, fines, and forced insurance placement. For financed vehicles, lenders may also impose late fees or require the vehicle to be returned to the dealership if coverage lapses.
Key Takeaways
• Minimum liability limits: $15k/$30k/$5k. • Lenders often require collision, comprehensive, and gap coverage. • Provide proof of coverage to the lender and keep records updated. • Failure to comply can result in legal and financial penalties.