Auto Liability in California

Auto Liability in California

What they mean and what to think about when choosing your coverage

Essential Knowledge

Liability Coverage

The first question you will get when getting any insurance quote is what liability coverage you would like. This is the only coverage legally required in California, so everyone must have it.

Liability insurance is represented by three numbers standardly formatted as: 111 / 222/ 333.

1st Number
Per Person Injury: The maximum the insurer pays for one person’s injury claim in an at-fault accident.
2nd Number
Per Accident Injury: The maximum paid for all people injured in the accident (whether 2 people or a busload).
3rd Number
Property Damage: The maximum paid for damage to cars, personal items, structures (fences, signs), and pets.
California's Legal Minimum Limits:
$30,000
Bodily Injury / Person
$60,000
Bodily Injury / Accident
$15,000
Property Damage / Accident

What is at Risk Following an Accident?

When an accident happens, you don't know the extent of the other party's injuries in advance. However, you do know what can legally be pursued following an incident.

What the Other Party Can Pursue:
  • Medical bills incurred from the accident
  • Time missed from work or activities
  • Pain and suffering compensation legally due
Your Personal Assets at Exposure:
  • Funds in savings and investments
  • Equity in property
  • Future wage garnishments
"Remember: When someone pursues a liability claim, they are pursuing it against you (the person who caused the accident), not the insurance company directly. The insurance policy is a contract where they agree to defend and indemnify you."

Defense vs. Indemnification: In most policies, the legal cost to defend you is not subject to your liability limits. However, indemnification (the payout to the other party) is capped at your limits. Any court judgment exceeding your limits must be paid out of your own pocket.

How to Choose Your Injury & Property Limits

1. Bodily Injury Limits

Physics dictates that the person seated closest to the impact point often incurs the most severe injuries. Because of this, your per person limit should be carefully evaluated based on your asset exposure.

Note: If your calculated bodily injury need exceeds $250,000, you should ask about a Liability Umbrella Policy. The "per accident" limit is usually tied directly to the "per person" limit and is often double the amount.

2. Property Damage Limits

Property damage claims are extremely common. If your limit is set too low, the other party can pursue you in Small Claims Court without needing an attorney.

Consider the real-world costs of driving today:

  • Vehicle Replacement: If a car is totaled, you owe its current value. If your limit isn't enough, you must pay the difference out of pocket.
  • Repair Labor Costs: Standard body shop labor rates can run $100 - $150/hr, with mechanical labor rates reaching $175 - $225/hr (plus parts).
  • Rental Car Coverage: You owe the other driver a comparable rental vehicle while theirs is in the shop. High-end or specialized vehicles (like trucks or luxury cars) carry high daily rental rates.
Pro Tip: You can adjust your Property Damage liability separately from Bodily Injury liability. The cost to increase Property Damage limits is generally low, making it a smart upgrade regardless of your asset level.

Check Your Personal Asset Exposure

Use our online Liability Risk Review Calculator to better understand what assets someone can and cannot pursue following an accident.

Open Liability Risk Calculator →