California laws regulate the car insurance industry. Some, such as the uninsured and underinsured motorist laws are too confusing in multi-car collisions and should be changed. Another states the minimum liability coverage mandatory to operate a vehicle in the state. An experienced auto accident lawyer can explain the various laws to you in further detail.
California and the Fault System.
California follows a "fault" system. This means that anyone who has suffered an injury from a car accident (whether the injured individual is the driver, passenger, bicyclist, or pedestrian) can take action to get compensation for losses. Such action includes filing a claim under your own insurance policy, pursuing a claim through the at-fault driver's insurance company, or filing a personal injury lawsuit against the at-fault driver.
If California were a "no-fault" system, drivers would only have the option to turn to their own insurance company for compensation for losses from a car accident, regardless of who was at fault for the accident. In that case, remedies against the at-fault driver are limited.
Minimum Car Insurance Requirements in California
California law requires that drivers have a way to compensate victims for personal injury or property damage resulting from a car accident. Purchasing liability insurance is the simplest and most common way to meet this requirement. The minimum liability insurance coverage required for private passenger vehicles under California law is $15,000 for injury or death to one person, $30,000 for all people involved in a single accident (for injury or death to more than one person), and $5,000 for property damage. You must carry evidence of insurance in your vehicle at all times.
California's "Financial Responsibility" Requirement
Rather than purchasing a qualifying insurance policy, drivers may instead establish proof of financial responsibility. Vehicle owners can make a cash deposit of $35,000 with the California DMV, get a self-insurance certificate from the California DMV (option only available for fleet of more than 25 cars), or get a $35,000 surety bond from a company licensed to do business in California.
Other Car Insurance Coverage
The 15/30/5 liability insurance is the minimum required under California law, but you can carry more coverage. Optional coverage includes comprehensive coverage, collision coverage, medical and funeral service coverage, uninsured/underinsured motorist coverage, rental car coverage, and towing and labor coverage.
As your San Fernando auto accident lawyer can exlpain, it is often a good idea to consider coverage options beyond the coverage required by law. For example, if you are found to be at fault for the car accident, your insurance will only cover up to the maximum of your policy, in which case you are personally responsible for the remainder of the damages. If you are a victim of a car accident where the other party was at fault, you will be able to recover only up to the higher of the policy limits, even in situations where your damages exceed the policy limits.
Even though California law mandates insurance, many drivers are uninsured or underinsured. Some of these drivers do not have the finances to purchase adequate insurance, and thus are judgment proof, which makes imposing fines on them ineffective. If you are in a collision with an uninsured driver, and you do not carry the add-on uninsured/underinsured motorist coverage, then you will have to personally bear the damages.