California car insurance laws require that a policyholder holds bodily injury liability cover to a level of $15,000 for each person injured in a road traffic accident up to a maximum ceiling level of $30,000. Liability coverage for damage to property is also a mandatory consideration and California car insurance laws state that a minimum level of $5,000 of cover is required. These obligatory levels of insurance cover are usually referred to as the 15/30/5 system.
California car insurance laws follow a ‘Tort’ system although it must be noted that these can vary greatly from one state to another. The system itself dictates that accountability must be assumed in the event of a road traffic accident and the driver at fault (and their insurance company) will have to take full responsibility for any damages caused.
However, not all California car insurance laws are compulsory. Purchasing cover to protect against underinsured or uninsured drivers is considered to be a worthwhile addition to any policy although the State of California has yet to make this obligatory.
The implications of California car insurance laws have yet to have a serious effect on the general price of an auto insurance premium. Throughout 2009, the average cost of an annual auto insurance policy in California was $1,650, which translates to being approximately $85 below the national average. However, California car insurance laws have had a noticeable effect on premiums within the state itself and the cost of a policy in 2009 was actually 6% higher than in the previous year.
Many residents of the Golden State have used advances in internet technology to help reduce the costs of auto insurance and the popularity of price comparison websites has been instrumental in keeping prices under control.