Personal auto insurance (California)

Source ledger

12 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.

1. [1]

   California Insurance Code Section 11580.1 (required provisions and permitted exclusions in an automobile liability policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective June 27, 2016Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2016, Ch. 31, Sec. 176 (SB 836), effective June 27, 2016.ID ca-ins-code-11580-1

   What this source supports (21)

   • Section 11580.1(a) provides that no policy of automobile liability insurance described in Vehicle Code section 16054 covering liability arising out of the ownership, maintenance or use of a motor vehicle may be issued or delivered in California unless it contains the provisions set forth in subdivision (b).
   • Section 11580.1(a) states that the requirements of subdivision (b) do not apply to insurance afforded under the policy to the extent that it exceeds the limits specified in Vehicle Code section 16056(a), or if the policy contains an underlying insurance requirement or provides for a retained limit of self-insurance equal to or greater than those limits.
   • Section 11580.1(b)(1) requires the policy to contain coverage limits not less than the limits specified in subdivision (a) of Vehicle Code section 16056.
   • Section 11580.1(b)(2) requires the policy to designate, by explicit description or appropriate reference, the motor vehicles or class of motor vehicles to which coverage is specifically granted, and section 11580.1(b)(3) requires explicit description of the purposes for which coverage for those vehicles is specifically excluded.
   • Section 11580.1(b)(4) requires the policy to afford insurance to the named insured with respect to any owned or leased motor vehicle covered by the policy and, to the same extent that insurance is afforded to the named insured, to any other person using the motor vehicle, provided the use is by the named insured or with the named insured's permission, express or implied, and within the scope of that permission.
   • Section 11580.1(b)(4)(A) permits insurance afforded for loading or unloading of the motor vehicle to be limited to the named insured, a relative of the named insured who resides in the named insured's household, a lessee or bailee of the motor vehicle, or an employee of any of those persons.
   • Section 11580.1(b)(4)(B) permits the insurance afforded to a person other than the named insured to exclude any employee with respect to bodily injury sustained by a fellow employee injured in the scope and course of employment, and any person engaged in the business of selling, repairing, servicing, delivering, testing, road-testing, parking or storing automobiles with respect to any accident arising out of the maintenance or use of a motor vehicle in connection with that business.
   • Section 11580.1(b)(4) states that as used in the chapter, owned motor vehicle includes all motor vehicles described and rated in the policy.
   • Section 11580.1(c) permits the insurance afforded by a policy to which subdivision (a) applies, including the insurer's obligation to defend, to be made inapplicable by appropriate policy provision to liability assumed by the insured under contract, liability for bodily injury or property damage caused intentionally by or at the direction of the insured, liability imposed upon or assumed by the insured under any workers compensation law, and liability for bodily injury to any employee of the insured arising out of and in the course of employment.
   • Section 11580.1(c)(5) permits exclusion of liability for bodily injury to an insured, or liability for bodily injury to an insured whenever the ultimate benefits of that indemnification accrue directly or indirectly to an insured.
   • Section 11580.1(c)(6) permits exclusion of liability for damage to property owned, rented to, transported by, or in the charge of an insured, and states that a motor vehicle operated by an insured shall be considered to be property in the charge of an insured.
   • Section 11580.1(c)(8) permits exclusion of any motor vehicle or class of motor vehicles, as described or designated in the policy, with respect to which coverage is explicitly excluded in whole or in part.
   • Section 11580.1(c) provides that the insured, as used in paragraphs (1) through (4), means only that insured under the policy against whom the particular claim is made or suit is brought, while an insured, as used in paragraphs (5) and (6), means any insured under the policy.
   • Section 11580.1(d)(1) permits the insurer and any named insured to agree, in the policy or a separate writing, that coverage and the insurer's obligation to defend shall not apply nor accrue to the benefit of any insured or third-party claimant while any motor vehicle is being used or operated by a natural person or persons designated by name, and provides that the limitation applies to any use or operation including negligent or alleged negligent entrustment to that person.
   • Section 11580.1(d)(1) provides that a named-driver exclusion agreement applies to all coverage provided by the policy and is sufficient to comply with section 11580.2(a)(1) so as to delete uninsured motorist coverage when the vehicle is operated by a natural person designated by name.
   • Section 11580.1(d)(1)(A) through (C) preserve the insurer's obligation to defend the named insured where the designated person resides in the same household as the named insured, is jointly sued with the named insured as a result of operating the named insured's insured motor vehicle, and is an insured under a separate automobile liability policy issued to that person as a named insured which does not provide a defense to the named insured.
   • Section 11580.1(d)(1) provides that a named-driver exclusion agreement made more than 60 days following the inception of the policy is effective from the date of the agreement and, with the signature of a named insured, is conclusive evidence of the validity of the agreement.
   • Section 11580.1(d)(1) provides that a named-driver exclusion agreement remains in force as long as the policy remains in force and applies to any continuation, renewal or replacement of the policy by the named insured, or reinstatement of the policy within 30 days of any lapse.
   • Section 11580.1(f)(1) provides that on and after January 1, 1976, no policy of automobile liability insurance described in subdivision (a) may be issued, amended or renewed in California if it contains any provision that expressly or impliedly excludes from coverage the operation or use of an insured motor vehicle by the named insured in the performance of volunteer services for a nonprofit charitable organization or governmental agency by providing social service transportation, and states that the subdivision does not apply where the named insured receives remuneration of any kind other than mileage reimbursement at or below the rate the subdivision describes.
   • Section 11580.1(f)(2) provides that no policy issued under the section may be cancelled by an insurer solely for the reason that the named insured is performing volunteer social service transportation for a nonprofit charitable organization or governmental agency.
   • Section 11580.1(e) provides that nothing in the section or in Vehicle Code section 16054 or 16450 shall be construed to constitute a homeowner's policy, general liability policy, comprehensive personal liability policy, premises liability policy, special multiperil policy or similar policy as a policy of automobile liability insurance for the purposes of the section.

   Subdivision (b)(4) is the statutory source of permissive-use coverage in California: the extension to a permitted driver is required by law rather than granted by the form. Subdivision (d)(1) is the statutory source of the named-driver exclusion, and the two read against each other.

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2. [2]

   California Insurance Code Section 11580.2 (uninsured and underinsured motorist coverage)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2006Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2005, Ch. 294, Sec. 23, effective January 1, 2006.ID ca-ins-code-11580-2

   What this source supports (32)

   • Section 11580.2(a)(1) requires every policy of bodily injury liability insurance covering liability arising out of the ownership, maintenance or use of a motor vehicle that is issued or delivered in California to a vehicle owner or operator, or issued by a California-licensed insurer on a vehicle then principally used or principally garaged in California, to contain or have added by endorsement a provision insuring the insured against the owner or operator of an uninsured motor vehicle.
   • Section 11580.2(a)(1) sets the required limits of that provision as at least equal to the limits specified in subdivision (m) and in no case less than the financial responsibility requirements specified in Vehicle Code section 16056.
   • Section 11580.2(a)(1) permits the insurer and any named insured, before or after issuance or renewal, to agree in writing to delete the uninsured motorist provision completely, to delete the coverage when the vehicle is operated by a natural person or persons designated by name, or to provide the coverage in an amount less than subdivision (m) requires but not less than the Vehicle Code section 16056 financial responsibility requirements.
   • Section 11580.2(a)(2) and (a)(3) prescribe the exact form of words a deletion or reduced-limit agreement must take, and section 11580.2(a)(2) provides that execution of the agreement relieves the insurer of liability under the section while the agreement remains in effect.
   • Section 11580.2(a)(1) provides that a deletion or amount agreement binds every insured to whom the policy or endorsement provisions apply while the policy is in force, and continues to bind with respect to any continuation or renewal, any other policy that extends, changes, supersedes or replaces the policy issued by the same insurer, and reinstatement of the policy within 30 days of any lapse.
   • Section 11580.2(a)(1) excludes a policy from the application of the section if the automobile liability coverage is provided only on an excess or umbrella basis.
   • Section 11580.2(a)(1) states that nothing in the section requires uninsured motorist coverage to be offered or provided in a homeowner policy, comprehensive personal liability policy, premises liability policy, special multiperil policy, or any other policy or endorsement where automobile liability coverage is offered as incidental to some other basic coverage.
   • Section 11580.2(m) requires uninsured motorist coverage to be offered with limits equal to the limits of liability for bodily injury in the underlying policy, but provides that it need not be offered with limits in excess of thirty thousand dollars for bodily injury to or death of one person in any one accident and, subject to that per-person limit, sixty thousand dollars for bodily injury to or death of two or more persons in any one accident.
   • Section 11580.2(a)(1) states the required limits conjunctively, as at least equal to subdivision (m) and in no case less than the Vehicle Code section 16056 financial responsibility requirements, so the operative minimum is whichever of the two amounts is higher on the date in question; on that reading the subdivision (m) amounts of thirty thousand and sixty thousand dollars are a ceiling on what an insurer must offer rather than a floor on what the coverage must provide.
   • Section 11580.2(p)(2) defines an underinsured motor vehicle as a motor vehicle that is an insured motor vehicle but insured for an amount that is less than the uninsured motorist limits carried on the motor vehicle of the injured person.
   • Section 11580.2(p)(4) provides that when bodily injury is caused by one or more motor vehicles, whether insured, underinsured or uninsured, the maximum liability of the insurer providing underinsured motorist coverage shall not exceed the insured's underinsured motorist coverage limits, less the amount paid to the insured by or for any person or organization that may be held legally liable for the injury.
   • Read together, section 11580.2(p)(2) and section 11580.2(p)(4) make California underinsured motorist coverage a difference-in-limits coverage rather than an additional layer of its own: on that reading it responds only where the at-fault vehicle is insured for less than the injured person's own uninsured motorist limit, and it pays at most that limit reduced by what the liable parties paid, so an at-fault driver whose liability limits equal or exceed the injured person's uninsured motorist limit leaves nothing for the coverage to pay.
   • Section 11580.2(p)(3) provides that underinsured motorist coverage does not apply to any bodily injury until the limits of the bodily injury liability policies applicable to all insured motor vehicles causing the injury have been exhausted by payment of judgments or settlements, and proof of the payment is submitted to the insurer providing the underinsured motorist coverage.
   • Section 11580.2(q) provides that regardless of the number of vehicles involved, persons covered, claims made, premiums paid or premiums shown on the policy, in no event shall the limit of liability for two or more motor vehicles or two or more policies be added together, combined or stacked to determine the limit of insurance coverage available to injured persons.
   • Section 11580.2(b) conditions uninsured motorist coverage, with respect to an uninsured motor vehicle whose owner or operator is unknown, on the bodily injury having arisen out of physical contact of the automobile with the insured or with an automobile that the insured is occupying.
   • Section 11580.2(b)(2) requires that the insured or someone acting on the insured's behalf report the accident within 24 hours to the police department of the city where the accident occurred, or in unincorporated territory to the sheriff of the county or the local headquarters of the California Highway Patrol, and file with the insurer within 30 days thereafter a statement under oath that a cause of action exists against a person whose identity is unascertainable, setting forth supporting facts.
   • Section 11580.2(b) treats an insured motor vehicle as an uninsured motor vehicle where its liability insurer is unable to make payment within its limits because of insolvency, and limits that solvency protection to accidents occurring during a policy period in which the insured's own motor vehicle coverage is in effect where the tortfeasor's liability insurer becomes insolvent within one year of the accident.
   • Section 11580.2(c)(1) provides that the coverage does not apply, either as primary or as excess coverage, to property damage sustained by the insured.
   • Section 11580.2(c)(3) provides that the coverage does not apply to bodily injury of the insured with respect to which the insured or the insured's representative, without the written consent of the insurer, made any settlement with or prosecuted to judgment any action against any person who may be legally liable.
   • Section 11580.2(c)(6) provides that the coverage does not apply to bodily injury of the insured while occupying a motor vehicle owned by an insured, or leased to an insured under a written contract for a period of six months or longer, unless the occupied vehicle is an insured motor vehicle.
   • Section 11580.2(c)(4) provides that the coverage does not apply in any instance where it would inure directly or indirectly to the benefit of any workers compensation carrier or any person qualified as a workers compensation self-insurer, or directly to the benefit of the United States or any state or political subdivision.
   • Section 11580.2(f) requires the policy or endorsement to provide that whether the insured is legally entitled to recover damages, and if so the amount, is determined by agreement between the insured and the insurer or, in the event of disagreement, by arbitration conducted by a single neutral arbitrator.
   • Section 11580.2(i)(1) provides that no cause of action accrues to the insured unless, within two years from the date of the accident, suit for bodily injury has been filed against the uninsured motorist in a court of competent jurisdiction, agreement as to the amount due under the policy has been concluded, or the insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested.
   • Section 11580.2(i)(2) requires an arbitration instituted under the section to be concluded within five years from the institution of the proceeding, or where the insured has a workers compensation claim arising from the same accident, within three years of the date that claim is concluded or within the five-year period, whichever occurs later.
   • Section 11580.2(k) requires an insurer whose insured has a pending uninsured motorist claim to notify the insured in writing of the applicable statute of limitation at least 30 days before it expires, and provides that failure to give the notice tolls the limitation for 30 days from the date the notice is actually given; the notice is not required if the insurer has received notice that the insured is represented by an attorney.
   • Section 11580.2(g) entitles the insurer paying a claim under an uninsured motorist endorsement to be subrogated to the insured's rights against any person legally liable to the extent of the payment, and permits that action to be brought within three years from the date payment was made.
   • Section 11580.2(h) requires that an insured entitled to recovery be reimbursed without being required to sign any release or waiver of rights under any other applicable insurance coverage, and prohibits payment being delayed or made contingent upon decisions as to liability or distribution of loss costs under other bodily injury liability insurance or any bond applicable to the accident.
   • Section 11580.2(h)(1) permits a loss payable under uninsured motorist coverage to be reduced by the amount paid and the present value of all amounts payable to the insured under any workers compensation law, exclusive of nonoccupational disability benefits.
   • Section 11580.2(n) requires uninsured and underinsured motorist coverage to be offered as a single coverage, with underinsured motorist limits equal to the insured's uninsured motorist limits in the underlying policy, and permits an insurer to offer underinsured limits in excess of the uninsured motorist coverage.
   • Section 11580.2(p)(7) requires underinsured motorist coverage to be included in all policies of bodily injury liability insurance providing uninsured motorist coverage issued or renewed on or after July 1, 1985, and preserves the effect of an agreement to delete uninsured motorist coverage executed before that date.
   • Section 11580.2(d) permits the policy or endorsement to provide that where the insured has coverage available under more than one uninsured motorist coverage provision, damages shall not be deemed to exceed the higher of the applicable limits of the respective coverages and shall be prorated between the applicable coverages as the limits of each bear to the total of the limits.
   • Section 11580.2(e) permits the policy or endorsement to provide that where the insured has valid and collectible automobile medical payment insurance available, the damages recoverable under uninsured motorist coverage are reduced by the amounts paid or due to be paid under that medical payment insurance.

   The most consequential section for a California auto claim, and the one most often described incorrectly. Two entries are readings rather than quotations, and each says so in its own text so it cannot be mistaken for the statute's words: the interaction between subdivision (m) and Vehicle Code section 16056, and the difference-in-limits effect of subdivisions (p)(2) and (p)(4).

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3. [3]

   California Insurance Code Section 758.5 (choice of automotive repair dealer)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2010Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2009, Ch. 387, Sec. 1 (AB 1200), effective January 1, 2010.ID ca-ins-code-758-5

   What this source supports (11)

   • Section 758.5(a) provides that no insurer shall require that an automobile be repaired at a specific automotive repair dealer, as that term is defined in Business and Professions Code section 9880.1.
   • Section 758.5(b)(1) provides that no insurer shall suggest or recommend that an automobile be repaired at a specific automotive repair dealer unless a referral is expressly requested by the claimant, or the claimant has been informed in writing of the right to select the automotive repair dealer.
   • Section 758.5(b)(2) permits an insurer to provide the claimant with specific truthful and nondeceptive information regarding the services and benefits available during the claims process, which may include information about repair warranties offered, the type of replacement parts to be used, the anticipated time to repair the vehicle, and the quality of workmanship available.
   • Section 758.5(b)(3) provides that if an insurer's recommendation of an automotive repair dealer is accepted by the claimant, the insurer shall cause the damaged vehicle to be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by law.
   • Section 758.5(b)(3) requires that where the recommendation is made orally and accepted, the insurer mail or provide a written notice within five calendar days of the acceptance, in a separate and freestanding document, in no less than 10-point type, containing the statement the subdivision prescribes.
   • Section 758.5(b)(3) prescribes the text of that notice, which states that the insurer is prohibited by law from requiring that repairs be done at a specific automotive repair dealer and that the claimant is entitled to select the auto body repair shop to repair damage covered by the insurer.
   • Section 758.5(c) provides that, except for a referral the claimant expressly requested or information of the kind authorized by subdivision (b)(2), after the claimant has chosen an automotive repair dealer the insurer shall not suggest or recommend that the claimant select a different automotive repair dealer.
   • Section 758.5(d)(1) requires an insurer that by the insurance contract suggests or recommends repair at a particular automotive repair dealer to prominently disclose that contractual provision in writing to the insured both at the time the insurance is applied for and at the time the claim is acknowledged.
   • Section 758.5(d)(2) provides that if the claimant elects to have the vehicle repaired at the shop of the claimant's choice, the insurer shall not limit or discount the reasonable repair costs based on charges that would have been incurred had the vehicle been repaired by the insurer's chosen shop.
   • Section 758.5(e) defines claimant, for purposes of the section, as a first-party claimant or insured, or a third-party claimant who asserts a right of recovery for automotive repairs under an insurance policy.
   • Section 758.5(f) provides that the commissioner's powers to enforce the section include those granted in the unfair practices article commencing at Insurance Code section 790.

   Subdivision (d)(2) is the operative protection and the part most often left out of a summary: choosing your own shop does not license the insurer to pay only what its own network shop would have charged. The section reaches third-party claimants as well as insureds, by force of subdivision (e).

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4. [4]

   California Insurance Code Section 1861.02 (mandatory automobile rating factors and the Good Driver Discount policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAPublished November 8, 1988Effective January 1, 2016Last checked September 2, 2026Updates: Added by initiative (Proposition 103) and amendable only within the limits Proposition 103 sets. Last amended by Stats. 2015, Ch. 348, Sec. 14 (AB 1515), effective January 1, 2016.ID ca-ins-code-1861-02

   What this source supports (11)

   • Section 1861.02(a) requires that rates and premiums for an automobile insurance policy, as described in subdivision (a) of Insurance Code section 660, be determined by application of the following factors in decreasing order of importance: the insured's driving safety record, the number of miles the insured drives annually, and the number of years of driving experience the insured has had.
   • Section 1861.02(a)(4) permits the commissioner to adopt by regulation other factors that have a substantial relationship to the risk of loss, and requires the regulations to set forth the respective weight to be given each factor in determining automobile rates and premiums.
   • Section 1861.02(a) provides that notwithstanding any other provision of law, the use of any criterion without approval shall constitute unfair discrimination.
   • Section 1861.02(b)(1) provides that every person who meets the criteria of section 1861.025 shall be qualified to purchase a Good Driver Discount policy from the insurer of that person's choice, and that an insurer shall not refuse to offer and sell a Good Driver Discount policy to any person who meets those standards.
   • Section 1861.02(b)(2) requires the rate charged for a Good Driver Discount policy to comply with subdivision (a) and to be at least 20 percent below the rate the insured would otherwise have been charged for the same coverage.
   • Section 1861.02(c) provides that the absence of prior automobile insurance coverage, in and of itself, shall not be a criterion for determining eligibility for a Good Driver Discount policy, or generally for automobile rates, premiums or insurability.
   • Section 1861.02(d) permits an insurer to refuse to sell a Good Driver Discount policy insuring a motorcycle unless all named insureds have been licensed to drive a motorcycle for the previous three years.
   • Section 1861.02(b)(3) preserves the ability of a reciprocal insurer organized before November 8, 1988 by a motor club, and of an insurer requiring membership in a specified voluntary nonprofit organization in existence before that date, to require that membership as a condition precedent to applying for insurance, subject to the conditions in subparagraph (C).
   • Section 1861.02(b)(3)(C) conditions those membership arrangements on membership being conditioned only on timely payment of dues and other bona fide criteria not based upon driving record or insurance, on dues bearing a reasonable relationship to the benefits provided and not depending on whether the member buys insurance, and on membership providing bona fide services or benefits in addition to the right to apply for insurance.
   • Section 1861.02(b)(3)(C)(i) provides that membership in a motor club may not be based on residence in any area within the state.
   • Section 1861.02(e) provides that the section became operative on November 8, 1989, and the section's own note records that it was added on November 8, 1988 by initiative Proposition 103.

   The cross-reference to section 660(a) is the load-bearing part and is usually dropped: these rules attach to a policy insuring four or fewer private-passenger-type autos, so they govern personal auto and do not reach a commercial fleet policy.

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5. [5]

   California Insurance Code Section 1861.025 (who qualifies to purchase a Good Driver Discount policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2016Last checked September 2, 2026Updates: Amended only by legislation, within the limits Proposition 103 sets. Last amended by Stats. 2015, Ch. 348, Sec. 15 (AB 1515), effective January 1, 2016.ID ca-ins-code-1861-025

   What this source supports (9)

   • Section 1861.025 provides that a person is qualified to purchase a Good Driver Discount policy only if that person meets all of the criteria the section lists.
   • Section 1861.025(a) requires that the person has been licensed to drive a motor vehicle for the previous three years.
   • Section 1861.025(b)(1) requires that during the previous three years the person has not had more than one violation point count determined as provided by the specified subdivisions of Vehicle Code section 12810.
   • Section 1861.025(b)(1)(A) provides that for purposes of the section, the driver of a motor vehicle involved in an accident for which the driver was principally at fault that resulted only in damage to property shall receive one violation point count, in addition to any other violation points imposed for that accident.
   • Section 1861.025(b)(1)(B) provides that where an insurer is prohibited by section 488 or 488.5 from increasing the premium on a policy on account of a violation, that violation shall not be included in determining the person's point count.
   • Section 1861.025(b)(3) provides that the person must not, during the previous three years, have been the driver of a motor vehicle involved in an accident that resulted in bodily injury or the death of any person and have been principally at fault, and requires the commissioner to adopt regulations setting guidelines for insurers to determine fault for that purpose.
   • Section 1861.025(b)(2) provides that the person must not have had more than one dismissal pursuant to Vehicle Code section 1803.5 that was not made confidential pursuant to Vehicle Code section 1808.7, in the 36-month period, for violations that would have resulted in more than one violation point count had the complaint not been dismissed.
   • Section 1861.025(c) requires that during the period beginning on January 1, 1999 or ten years before the date of application for issuance or renewal of the Good Driver Discount policy, whichever is later, and ending on the date of that application, the person has not been convicted of a violation of Vehicle Code section 23140, 23152 or 23153, a felony violation of Vehicle Code section 23550 or 23566, or a violation of Penal Code section 191.5 or subdivision (a) of Penal Code section 192.5.
   • Section 1861.025(d) provides that a person who claims to meet the criteria of subdivisions (a), (b) and (c) based entirely or partially on a driver's license and driving experience acquired anywhere other than the United States or Canada is rebuttably presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada for at least the previous 18 months and meets those criteria for that period.

   The at-fault property-damage-only accident carries its own point under subdivision (b)(1)(A) even though no point attaches under the Vehicle Code, which is why an accident with no citation can still cost the discount. Subdivision (d) is the provision for a driver licensed outside the United States or Canada, and it is a rebuttable presumption rather than an exemption.

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6. [6]

   California Insurance Code Section 660 (definitions governing cancellation and nonrenewal of an automobile policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2017Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2016, Ch. 304, Sec. 1 (AB 2884), effective January 1, 2017.ID ca-ins-code-660

   What this source supports (11)

   • Section 660(a) defines policy, for the purposes of the chapter on cancellation or failure to renew, as an automobile liability, automobile physical damage or automobile collision policy, or any combination of them, delivered or issued for delivery in California, insuring a single individual or individuals residing in the same household as named insured, and covering only the vehicle types the subdivision lists.
   • Section 660(a)(1) includes a motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers and is not rented to others; section 660(a)(2) includes any other four-wheel motor vehicle with a load capacity of 1,500 pounds or less; and section 660(a)(3) includes a motorcycle.
   • Section 660(a)(2) provides that the chapter does not apply to any policy issued under an automobile assigned risk plan, any policy insuring more than four automobiles, or any policy covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards.
   • Section 660(b) provides that automobile liability coverage includes only coverage of bodily injury and property damage liability, medical payments, and uninsured motorists coverage.
   • Section 660(c) provides that automobile physical damage coverage includes all coverage of loss or damage to an insured automobile except loss or damage resulting from collision or upset, and section 660(d) provides that automobile collision coverage includes all coverage of loss or damage resulting from collision or upset.
   • Section 660(e) defines renewal as continuing coverage with either the issuing insurer or an affiliated insurer as defined in section 1215, and requires that where coverage is continued with an affiliated insurer it be the same or broader coverage and that the insured be notified in writing at least 20 days before expiration of the current policy period.
   • Section 660(e) requires that the notice of replacement in an affiliated insurer state that the insurer has determined it will not offer renewal with the present insurer, that it is offering replacement in an affiliated insurer, and that the insured may obtain the reasons for the change in insurers by requesting them in writing not later than one month following expiration of the policy period.
   • Section 660(e) provides that any policy with a policy period or term of six months or less, whether or not made continuous for successive terms upon payment of additional premiums, shall for the purposes of the chapter be considered as if written for a term of six months.
   • Section 660(e) provides that any policy written for a term longer than one year, or any policy with no fixed expiration date, shall for the purposes of the chapter be considered as if written for successive policy periods or terms of one year.
   • Section 660(f) defines nonpayment of premium as failure of the named insured to discharge when due any obligation in connection with the payment of premiums on a policy, or any installment of that premium, whether payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit.
   • Section 660(g) defines cancellation as termination of coverage by an insurer, other than termination at the request of the insured, during a policy period; section 660(h) defines nonrenewal as a notice by the insurer that it is unwilling to renew a policy; and section 660(i) defines expiration as termination of coverage by reason of the policy having reached the end of its term or the end of the period for which a premium has been paid.

   This is the scope section for two separate bodies of protection: the cancellation and nonrenewal rules in sections 661 to 669.5, and, by cross-reference, the mandatory rating factors and Good Driver Discount rules in section 1861.02. The four-automobile ceiling and the private-passenger vehicle types are therefore the boundary between personal auto and commercial auto in California law, not merely a labelling convention.

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7. [7]

   California Insurance Code Section 661 (the only grounds on which an automobile policy may be cancelled)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2013Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2012, Ch. 786, Sec. 5 (AB 2303), effective January 1, 2013.ID ca-ins-code-661

   What this source supports (9)

   • Section 661(a) provides that a notice of cancellation of a policy shall be effective only if it is based on one or more of the five reasons the subdivision lists.
   • Section 661(a)(1) lists nonpayment of premium as a ground for cancellation.
   • Section 661(a)(2) lists as a ground that the driver's license or motor vehicle registration of the named insured, or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy, has been under suspension or revocation during the policy period or, if the policy is a renewal, during its policy period or the 180 days immediately preceding its effective date.
   • Section 661(a)(3) lists as a ground the discovery of fraud by the named insured in pursuing a claim under the policy, provided the insurer does not rescind the policy.
   • Section 661(a)(4) lists as a ground the discovery of material misrepresentation of the named insured's or a customarily-operating household resident's safety record, annual miles driven in prior years, number of years of driving experience, record of prior automobile insurance claims, or any other factor found by the commissioner to have a substantial relationship to the risk of loss.
   • Section 661(a)(4) provides that an insured who negligently misrepresents information of that kind may avoid cancellation by furnishing corrected information to the insurer within 20 days after receiving notice of cancellation and agreeing to pay any difference in premium for the policy period in which the information remained undisclosed.
   • Section 661(a)(5) lists as a ground a substantial increase in the hazard insured against.
   • Section 661(b) provides that modification of automobile physical damage coverage by the inclusion of a deductible not exceeding one hundred dollars shall not be deemed a cancellation of the coverage or of the policy.
   • Section 661(c) provides that the section does not apply to nonrenewal.

   Subdivision (c) is the limit of the protection and the part that most often surprises a policyholder: the five grounds constrain cancellation during a policy period, and say nothing about an insurer declining to renew at the end of one. Nonrenewal is governed by section 663 instead. The list also reaches only policies within the scope of section 660.

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8. [8]

   California Insurance Code Section 662 (notice periods for cancelling an automobile policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2025Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2024, Ch. 793, Sec. 1 (SB 1295), effective January 1, 2025.ID ca-ins-code-662

   What this source supports (6)

   • Section 662(a)(1) provides that a notice of cancellation of a policy is not effective unless mailed or delivered by the insurer to the named insured, lienholder or additional interest at least 20 days prior to the effective date of cancellation.
   • Section 662(a)(1) provides that where cancellation is for nonpayment of premium, at least 10 days notice of cancellation after nonpayment of premium due by the specified due date, accompanied by the reason for the cancellation, shall be given.
   • Section 662(a)(1) requires that unless the reason accompanies or is included in the notice of cancellation, the notice state or be accompanied by a statement that upon written request of the named insured, mailed or delivered to the insurer not less than 15 days prior to the effective date of cancellation, the insurer will specify the reason for the cancellation.
   • Section 662(a)(2) provides that a cancellation based on nonpayment of premium shall only be effective on the date specified in the notice if the insured has not cured the nonpayment of premium identified in the notice by the end of the 10-day period.
   • Section 662(b) provides that the section does not apply to nonrenewal.
   • Section 662(c) provides that notices made to lienholders pursuant to the section may be done electronically with the consent of the lienholder.

   Subdivision (a)(2) was the substance of the 2024 amendment and converts the 10-day nonpayment notice into a genuine cure period: paying within the 10 days defeats the cancellation rather than merely inviting reinstatement at the insurer's discretion.

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9. [9]

   California Insurance Code Section 663 (offer of renewal or notice of nonrenewal of an automobile policy)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

   California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2019Last checked September 2, 2026Updates: Amended only by legislation. Repealed and added by Stats. 2013, Ch. 369, Sec. 7 (SB 251), effective January 1, 2014, and operative January 1, 2019 by its own provisions.ID ca-ins-code-663

   What this source supports (8)

   • Section 663(a) requires an insurer, before policy expiration, to deliver or mail to the named insured at the address shown on the policy either a written or verbal offer of renewal at least 20 days before expiration, contingent upon payment of premium as stated in the offer, or a written notice of nonrenewal at least 30 days before expiration including the statement required by section 666.
   • Section 663(b)(1) requires an insurer that delivers a verbal offer to renew which the insured declines to deliver or mail to the named insured, at least 20 days before expiration, a written confirmation of the offer and the rejection.
   • Section 663(b)(2) requires an insurer that attempts to satisfy subdivision (a) with a verbal offer to renew but is unable to contact the named insured directly at least 20 days before expiration to deliver or mail a written offer to renew, contingent upon payment of premium as stated in the offer, at least 20 days before expiration.
   • Section 663(c) provides that where an insurer fails to give the named insured either an offer of renewal or a notice of nonrenewal as the section requires, the existing policy, with no change in its terms and conditions, shall remain in effect for 30 days from the date that either the offer to renew or the notice of nonrenewal is delivered or mailed to the named insured.
   • Section 663(c) requires the insurer to provide the insured with a notice to that effect together with the policy or the notice of renewal or nonrenewal.
   • Section 663(c) provides that notwithstanding the insurer's failure to comply with the section, the policy shall terminate on the effective date of any other replacement or succeeding automobile insurance policy procured by the insured or the insured's agent or broker with respect to any automobile designated in both policies.
   • Section 663(d) provides that the insurer is not required to notify the named insured or any other insured of nonrenewal of the policy if the insurer has mailed or delivered a notice of expiration or cancellation on or prior to the 30th day preceding expiration of the policy period.
   • Section 663(e) provides that the section became operative on January 1, 2019.

   Subdivision (c) is the remedy, and it is a 30-day extension of the existing policy rather than a bar on nonrenewal: a missed notice buys time, not continued coverage. Subdivision (c) also cuts that extension short the moment replacement coverage attaches to the same vehicle.

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10. [10]

    California Vehicle Code Section 16020 (duty to establish and carry evidence of financial responsibility)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

    California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CAEffective January 1, 2023Last checked September 2, 2026Updates: Amended only by legislation. Last amended by Stats. 2022, Ch. 295, Sec. 13 (AB 2956), effective January 1, 2023.ID ca-veh-code-16020

    What this source supports (6)

    • Section 16020(a) requires all drivers and all owners of a motor vehicle to be able to establish financial responsibility pursuant to Vehicle Code section 16021 at all times, and to carry in the vehicle at all times evidence of the form of financial responsibility in effect for the vehicle.
    • Section 16020(b)(1) provides that evidence of financial responsibility includes a form issued by an insurance company or charitable risk pool, as specified by the Department of Motor Vehicles pursuant to Vehicle Code section 4000.37.
    • Section 16020(b)(2) provides that evidence of financial responsibility includes, where the owner is a self-insurer under Vehicle Code section 16052 or a depositor under Vehicle Code section 16054.2, the certificate of self-insurance or the assignment of deposit letter issued by the department.
    • Section 16020(b)(3) provides that evidence of financial responsibility includes an insurance covering note or binder pursuant to Insurance Code section 382 or 382.5.
    • Section 16020(b)(4) provides that evidence of financial responsibility includes a showing that the vehicle is owned or leased by, or under the direction of, the United States or a public entity as defined in Government Code section 811.2.
    • Section 16020(c) provides that evidence of financial responsibility may also be obtained by a law enforcement officer and court personnel from an electronic reporting system when that system becomes available for use by law enforcement officers.

    The duty in subdivision (a) is two duties, and only one of them is insurance: being able to establish financial responsibility, and carrying evidence of it in the vehicle. A binder satisfies the evidence requirement under subdivision (b)(3), which matters in the days between binding and delivery of the card.

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11. [11]

    California Vehicle Code Section 16056 (policy limits that satisfy financial responsibility)(opens the original record on California Legislative Counsel (leginfo.legislature.ca.gov))

    California Legislative Counsel (leginfo.legislature.ca.gov)Primary lawPrimaryJurisdiction CALast checked September 2, 2026Updates: Amended only by legislation; the January 1, 2035 step-up is already written into the section.ID ca-veh-code-16056

    What this source supports (4)

    • Vehicle Code section 16056 states the liability limits a policy must carry to satisfy California's financial responsibility requirement as $15,000 for bodily injury to or death of one person, $30,000 for bodily injury to or death of all persons in one accident, and $5,000 for property damage for the period through December 31, 2024.
    • Vehicle Code section 16056 states the limits applicable on and after January 1, 2025 as $30,000 for bodily injury to or death of one person, $60,000 for bodily injury to or death of all persons in one accident, and $15,000 for property damage.
    • Vehicle Code section 16056 provides for a further step-up effective January 1, 2035, expressed as an increase BY $20,000 for bodily injury to or death of one person, BY $40,000 for bodily injury to or death of all persons in one accident, and BY $10,000 for property damage. Applied to the amounts operative from January 1, 2025, that produces limits of $50,000, $100,000 and $25,000 from January 1, 2035. The statute states the increments rather than the resulting figures, so the increments must not be read as the 2035 limits.
    • The section's amendment note reads that it was amended, as added by Stats. 2022, Ch. 717, Sec. 3, by Stats. 2023, Ch. 204, Sec. 19 (AB 1140), effective January 1, 2024, operative January 1, 2025 by its own provisions.

    Effective: 2025-01-01

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12. [12]

    Insurance Requirements - California Department of Motor Vehicles(opens the original record on California Department of Motor Vehicles)

    California Department of Motor VehiclesRegulatorPrimaryJurisdiction CALast checked August 31, 2026Updates: Re-verify annually and after each legislative session.ID ca-dmv-insurance-requirements

    What this source supports (2)

    • The California DMV lists the current minimum liability insurance amounts as $30,000 for injury or death to one person, $60,000 for injury or death to more than one person, and $15,000 for damage to property.
    • The California DMV states that the financial responsibility requirement may also be met by a $75,000 cash deposit with the DMV, by a DMV-issued self-insurance certificate, or by a $75,000 surety bond from a company licensed to do business in California.

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