The Personal Automobile Policy form itself is covered in the national guide. California's Casualty exam tests personal auto under its personal lines section, and the state questions focus on the rules around the policy: fault, the 2025 increase in minimum limits, Proposition 103 rating and the Good Driver Discount, cancellation limits, and the residual markets. This guide covers those rules with citations.

Fault and liability

• California is a tort (at-fault) state with no PIP or no-fault system. Medical payments coverage is an optional add-on.
• It applies pure comparative negligence (Li v. Yellow Cab Co., 1975; Civ. Code 1714). A claimant 30% at fault with $100,000 in damages recovers $70,000. No percentage of fault bars recovery.
• Under Proposition 51, each defendant's liability for non-economic damages, such as pain and suffering, is several only, in proportion to that defendant's fault (Civ. Code 1431.2).
• An owner who lets someone else drive is vicariously liable for that driver's negligence up to $15,000 / $30,000 / $5,000 (Veh. Code 17151).

Financial responsibility and minimum limits

• Drivers and owners must be able to show financial responsibility and must carry evidence of it in the vehicle (Veh. Code 16020). It can be shown to an officer on a mobile device (16028).
• Minimum liability limits (Veh. Code 16056; SB 1107):

• Minimum UM/UIM limits were raised to match the new bodily injury minimums.
• An accident causing injury, death, or more than $1,000 in property damage is reported to the DMV within 10 days on form SR-1 (Veh. Code 16000). The driver's agent, broker, or attorney may file it.

Uninsured motorist coverage (CIC 11580.2)

UM coverage must be included in the policy. It may be deleted entirely, or for named drivers, only by a written agreement in the statutory form.

Proposition 103 auto rating

• Mandatory rating factors, in order of importance (CIC 1861.02):

  1. driving safety record
  2. annual miles driven
  3. years of driving experience

  Optional factors must be adopted by regulation.

• Credit history is not an approved factor. It can't be used to decline or rate auto coverage.

• The absence of prior insurance, by itself, can't be used for eligibility or rates (1861.02(c)).

• Good Driver Discount:

  • A rate at least 20% below the otherwise applicable rate.
  • To qualify, the driver must have been licensed at least three years and in the past three years have no more than one violation point and no at-fault injury accident. There must be no DUI conviction in the past 10 years (1861.025).
  • A good driver may buy a Good Driver policy from any insurer.
  • An agent representing commonly owned insurers must offer the group's lowest-rate Good Driver policy (1861.16(b)).

• Agents must receive the same commission percentage on minimum-limits policies as on higher limits (1861.16(a)).

Cancellation and nonrenewal

• Under Proposition 103, a cancellation or nonrenewal of an auto policy is effective only if based on nonpayment, fraud or material misrepresentation, or a substantial increase in the hazard (CIC 1861.03(c)).
• CIC 661 also lists license or registration suspension and claim fraud.
• An insured who negligently misstated rating information can avoid cancellation by correcting it and paying any premium difference within 20 days.

If the insurer gives neither a renewal offer nor a nonrenewal notice, the existing policy continues for 30 days after notice is given.

Residual markets

• The California Automobile Assigned Risk Plan (CAARP) apportions drivers who are entitled to coverage but can't get it among insurers (CIC 11620).
• The California Low Cost Automobile Insurance Program covers income-eligible drivers at limits of 10/20/3. Policies run for one year, renewable, and applications go through any certified producer (CIC 11629.7 and following).

Other California auto rules

• Rideshare (TNC) drivers. From accepting a ride until it ends, the driver must have $1,000,000 of primary liability coverage, plus UM/UIM of $60,000 per person / $300,000 per incident for passengers (Pub. Util. Code 5433). Personal auto policies rarely cover TNC driving.
• Personal vehicle sharing. A privately owned car shared through a program stays a private passenger vehicle if the sharing income doesn't exceed the car's annual costs (CIC 11580.24).
• Named driver exclusions are allowed by agreed endorsement.
• Permissive users are covered at least to the minimum limits (CIC 11580.1).
• A privately used three-axle RV is a private passenger vehicle for insurance purposes.
• A total-loss vehicle taken by the insurer gets a salvage certificate (Veh. Code 11515).

Common exam traps

• The 2026 minimum limits are 30/60/15. The old 15/30/5 still sets the owner's vicarious liability cap.
• California is pure comparative and has no PIP.
• Credit can't be used in auto rating. Driving record, mileage, and experience are the top three factors.
• Good Driver Discount: 20%, three years licensed, at most one point.
• Auto notice: 10 days (nonpayment), 20 days (other reasons), 30 days (nonrenewal).
• CLCA limits are 10/20/3.