How California’s New Auto Insurance Law Affects Drivers in 2025
The new year 2025 marks significant changes to California's auto insurance laws. It’s the first time ever in the last 5 decades that the state has increased its minimum auto insurance liability limits. The change is strategized for the good because the prior insurance limits are not enough to cover the losses (including medical bills, auto repairs, and lost wages) in an accident today. So, hopefully, this update will help protect the interests of severe accident victims.
However, it might initially disturb the drivers. The reason behind this is the higher premiums and new responsibilities imposed on them, which impact their budget.
Our auto accident attorney is ready to assist drivers and help them understand the challenges of the new auto insurance law, so they can stay compliant.
Highlights of the California Auto Insurance Law 2025
Wondering what’s exactly changing? The Senate Bill 1107 states that all drivers registering their vehicles in California must comply with the state’s newly increased auto liability limits. Here’s a quick rundown of the major changes -
Liability Insurance Limits
| Highlights | Before 2025 | In and After 2025 | From 2035 |
|---|---|---|---|
| Body Injury or Death of One Person | $15,000 | $30,000 | $50,000 |
| Body Injury or Death of All Persons | $30,000 | $60,000 | $100,000 |
| Damage to Others' Property | $5,000 | $15,000 | $25,000 |
| Financial Responsibility(Min. Cah Deposit) | $35,000 | $75,000 | $120,000 |
Higher coverage means accident victims have access to more compensation for injuries and damages. As a result, insurance companies have already started raising their rates, and many drivers are feeling the pinch. Not only this, but driving without proper insurance coverage will now lead to bigger fines, losing your license, or even having your vehicle taken away.
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What’s the Impact of California’s New Auto Insurance Law?
While the new law aims to offer better protection for accident victims, it also comes with a few curveballs drivers should be prepared for. Most drivers in California are already facing challenges due to various reasons.
1. Higher Insurance Costs
Have you noticed your renewal notice recently? Yeah, with insurance premiums going up, drivers are facing major hikes in insurance rates. The cost of living in California is already high. And now, this increase might feel overwhelming for many drivers.
Imagine a person who is trying hard to balance groceries, rent, and now an extra $50 to $100 a month just for auto insurance. It’s a tough pill to swallow!
2. Risky for Uninsured and Underinsured Drivers
Some drivers who can’t afford insurance rates might prefer staying uninsured or underinsured. But that’s even more risky. They hope or believe that they won’t be caught or won’t cause an accident. Did you know that an uninsured driver could be fined or have their driving license suspended?
What if someone gets hit by an uninsured driver? The victim will still have to fight to recover their losses. That's why it’s important to have a skilled auto accident lawyer in Sacramento ready to act quickly and protect your rights. Moreover, one should also have Uninsured/Underinsured Motorist Coverage to cover the losses because insurance companies can’t help in such cases.
3. Tougher Negotiations
According to the new amendments, the victim of an accident receives bigger payouts. But, in reality, insurance companies know claims will cost more, so they’re working harder than ever to avoid big payouts. As a result, some insurance companies might slow down claims and make it harder for everyday drivers to get a fair payout.
How Can You Stay in Compliance With the New Update?
Here are some simple ways to stay in compliance and avoid penalties.
- Review Your Current Insurance Policy - First, review your policy to check if it meets the new minimum requirements. If it doesn’t, you must update it right away.
- Talk to Your Insurance Provider - Don’t hesitate to contact your insurance provider. You must confirm if you have the required coverage. You may also ask about options to protect yourself with higher limits or uninsured motorist coverage.
- Check for Extra Coverage Options - You might face a severe accident where the state minimum isn’t enough to cover all losses. Therefore, you must look for extra coverage options.
- Avoid Letting Your Policy Lapse - If your coverage lapses for a short time, you could be charged with a fine, license suspension, or vehicle impoundment.
Takeaway
California's new auto insurance law is announced to provide more financial protection to accident victims, but it also creates new risks, new costs, and new headaches for drivers. It’s time for you to understand it deeply to minimize your risks. You must ensure that your insurance coverage is enough.
If you unfortunately face an accident and are not confident about the insurance company’s response, you must contact a personal injury attorney in Sacramento for legal support.
Unsure If You're Fully Protected? Let 's Review Your Options Together!
At Doyle & O’Donnell Injury Law, we make sure you’re never alone after an accident. With over 30 years of experience as an auto accident lawyer in Sacramento, we’re the most trusted one. If you have any doubts regarding California’s new insurance law or if any of your loved ones are facing issues with receiving claims, contact us.
We’ll help you explore the new possibilities with the updated law and assist you in filing your claims.
Call us at 916-796-0024 to get the compensation you deserve.