Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: May 10, 2022

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The Truth in a Nutshell

  • California is not a no-fault state for auto insurance
  • Twelve states and Puerto Rico use a no-fault system
  • Auto insurance in California operates under the fault, or tort, system, under which you are responsible for damages you cause in an accident

Twelve states and Puerto Rico have no-fault car insurance laws. With so many Americans residing in one of the biggest states in the nation, many people are likely to ask: “Is California a no-fault state for auto insurance?”

This guide will tell you everything you need to know about California’s fault system for auto accidents. You may also learn something about the no-fault system for car insurance and how it could apply to you.

It is of the utmost importance, whether you are in an at-fault state or a no-fault state, that you have at least the minimum mandatory car insurance coverage. This varies state by state, but generally, you need a certain amount of property and bodily injury liability coverage. Some states also require personal injury protection. You’ll just want to make sure that if you’re looking for no-fault insurance coverage, you live in a no-fault state.

To get started, feel free to enter your ZIP code into our helpful tool above to find the right type of auto insurance coverage in CA.

How does fault come into play after an accident in California?

California is not a no-fault state for auto insurance. This means fault has to be assessed in the insurance process. If you have collision and comprehensive on your policy, your coverage would still pay for the damage to your car after an accident. This process is generally fast as fault is determined using things like police reports and citations issued immediately after an accident. Insurance policies can conduct a deeper investigation as needed. Having collision insurance can save you a lot of hassle no matter which kind of state you live in.

For drivers living in no-fault car insurance states, the process is straightforward. No matter who was at fault, you always file your claim with your insurance company. Then insurance companies work out the costs of medical costs and property damage in the background. This is part of why a small amount of personal injury protection is typically required in no-fault states. In a fault state like California, you could file a claim with the other party’s insurance if you believe they’re at fault. But you’re not their client. So don’t be surprised if they take longer to get you your money. You also aren’t entitled to things like car rental coverage if you’re going through the other party’s insurance.

If you are a California resident and want to know what no-fault insurance is, the following table has some key facts.

California No-Fault Auto Insurance Facts
Who it coversPolicyholder
Other people it coversPassengers in the policyholder's vehicle
What it coversMedical bills
What else it coversIncome losses
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There is a simple answer to the question “Is California a no-fault state?” — 2019 records show California car insurance laws still operate under the tort system, where individuals have the right to sue one another for compensation for bodily injury and loss resulting from an auto accident.

This applies no matter the severity of the accident. If you have liability insurance, they would have to go through your insurance limits first. If their medical expenses and physical auto damage fell within or near those limits, they would not be able to sue you. If the damages exceed those coverage limits by a significant margin, that’s when another driver might sue you. The minimum liability limits will protect you when you cause minor damage. But a larger accident could easily go beyond those modest limits for an at fault driver.

Even if your car is a total loss, not at-fault in California still does not apply. It still would be tort law, and you would get what is known as salvage value.

In terms of no-fault law in general, it has been this way for many years in most states. Still, you may be asking “Just what is a no-fault insurance state?” A handful of states have enacted no-fault laws in order to free up the court systems and save time/money for insurance companies and consumers in general. These states include FL, HI, KS, KY, MA, MI, MN, NJ, NY, ND, PA, and UT. California does not have any no-fault laws in place at this time.

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Who determines fault in an auto accident in California?

What does it mean that California is not a no-fault state? As mentioned, California operates under the tort system. In California, the fault is determined by the insurers of the individuals involved in the collision. They analyze the facts surrounding the collision and determine who caused the accident. Fault can actually be assigned to both parties in some situations.

For instance, one driver may be found to be 60% at fault, while the other is found to be 40% at fault.

The percentage of fault affects whether or not the individual may be entitled to financial compensation. This remains true in terms of a no-contact car accident in California.

A no-contact car accident is when one driver acts in a way that forces another driver to swerve to avoid collision with the vehicle. For example, to avoid hitting the vehicle, the driver has to swerve off the road and ends up hitting a tree. The driver would have to prove that it was the other driver that essentially forced them to do so.

Insurance companies have 15 days to acknowledge a claim in California.

After the claim has been acknowledged and the insurance company has received documentation and proof, they then have 40 days maximum to approve or deny the claim. Should a settlement be reached, the insurance company then has 30 days to make the payment. Medical expenses are often paid directly to the medical provider at a later time. But unless both parties are highly cooperative and moving forward, there can be significant delays in paying out physical auto damage. Even things like funeral expenses can be hard to collect leading to a personal injury lawsuit among other things.

The fault is frequently assigned based on police reports and similar references. Insurance companies may take into account witness statements, dash cams, and other sources as applicable to assign fault coverage.

What auto coverage is required to drive in California?

We have gone into optional coverages you may choose to be on the safe side, so what coverage is mandatory?

California car insurance laws require vehicle owners to be responsible for any accidents they are involved in with a minimum of what is known as 15/30/5 insurance.

This means an individual is covered for up to $15,000 for the injury or death of one person, $30,000 for the injury or death of more than one person, and $5,000 for property damage. You can add optional coverage to your policy as well, including comprehensive and collision coverage. These limits are very modest when compared with the cost of a more serious accident. Your premiums won’t be that high to increase your liability rates compared to what you’d end up paying if your coverage does not meet the monetary thresholds of the accident.

The following table looks at the average cost of each part of the insurance premium for a full coverage policy in California.

The Average California Car Insurance Rates by Coverage Type
Coverage TypeThe Average California Car Insurance Rates
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Should you find yourself in an accident, it is of the utmost importance to inform law enforcement immediately. Furthermore, there is a statute of limitations on bringing a lawsuit, so act quickly. It’s important to know how long you have to report a car accident to the insurance company.

Now, we’ve talked about how California is not a no-fault state, but, for the sake of edification, let’s look a little deeper into just what a no-fault accident is.

What does a no-fault accident mean?

When you hear “no fault,” you might think that’s ridiculous. If someone rear ends you at a stoplight, it’s clearly someone’s fault. These laws are not letting the driver off the hook. A no-fault accident means if you are injured in an accident, your own coverage will pay all, or at least some, of your medical bills and lost wages. It doesn’t matter who caused the accident. It gives drivers a clear pathway to who they should file their claim with and hold accountable to get bills paid.

However, even if you were not at-fault for the accident, the no-fault accident claim will go on your car insurance record. While that’s not great news, let’s get into the financial side of things for a potential bright spot.

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Who pays for car damage in a no-fault state?

No fault laws don’t extend extra coverage to you in an accident. Your bodily injury liability coverage just balances out as needed with the other side later on. Immediately following the accident, you would make a claim for resulting bills with your insurance company. Then they would pay based on the coverage limits you’ve been paying for. The amount of coverage you’d be immediately eligible for would be determined by your personal injury protection or PIP.

In the case of an accident, the compensated driver does not retain the right to sue for additional damages after they have been indemnified, or paid back, for their insurance claim. However, some states allow the victim to also file a lawsuit if a certain dollar threshold or injury severity, or “descriptive” threshold are met as a result of the accident. Monetary threshold states currently include HI, KS, KY, MA, MN, ND, and UT. The monetary threshold may be as low as $2,500.

Additionally, serious injuries also allow for lawsuits to be filed in no-fault states. The injury threshold states are FL, MI, NJ, and NY.

Note that property damage is not covered under “no-fault” laws. In order to seek compensation for damaged property, you must deal with the insurance company of the person who caused the damage.

“Add-on” coverage is available in some states as well. This coverage allows you to purchase personal injury protection, but remains a tort system for recovery, meaning you can still sue and be sued freely.

The following table shows optional add-on coverages, such as the aforementioned personal injury protection.

Add-On Auto Insurance Coverages
Collision CoveragePays for damage caused by a car accident involving another vehicle, person or object.
Comprehensive CoverageCovers damage caused by something other than a collision
Uninsured/Under-insured motorist coverageOptional coverage that insurers are required to offer by California law. Pays when another driver is at fault but either has no insurance or not enough insurance to cover the injured party's medical bills.
Medical Payments Coverage (Med Pay)Covers medical bills and/or funeral expenses for the policyholder and his or her passengers, regardless of who is at fault for an accident.
Personal Injury Protection (PIP)Extension of car insurance that covers medical expenses and lost wages. Pays out regardless of who is at fault.
Guaranteed Auto Protection (GAP)Covers the cost of paying off an auto loan or lease if policyholder's car is totaled and its market value is less than the balance owed
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These sorts of coverages exist solely to safeguard one against increased financial liability. Collision and comprehensive coverage, for instance, while optional, are strongly suggested. Currently, AR, DE, MD, and Washington D.C. are add-on states.

These are three unique states in that they allow their drivers to choose to purchase personal injury protection and waive the right to sue, or decline PIP, and stick with the good old-fashioned tort system and continue to sue each other like crazy.

No-Fault vs. At-Fault Insurance

Because California is an at-fault state, we must revisit its minimum liability coverages. As stated, you are to have financial responsibility of $15,000 for injury to another person, $30,000 for total bodily injuries, and $5,000 for property damage should you be responsible for a car accident.

In a no-fault state, the policyholder is indemnified by their own insurance company, no matter who caused the accident. Basically, with no-fault insurance, both parties consult their own insurance companies.

With at-fault insurance, the police determine who was at fault, then the victim files a claim with the at-fault driver’s insurance company as opposed to their own.

Comparatively, no-fault insurance is a rarity as 38 states in the United States subscribe to the at-fault way of handling collisions. Furthermore, drivers in no-fault states tend to pay more for insurance. This is because in no-fault states, personal injury protection is a requirement, not an add-on.

Next, we will go into what you should do should you find yourself in a collision.

What to Do If You Have Witnessed an Accident

Imagine you are walking down the street and see a car plow into the rear bumper of another vehicle. What do you do? Let’s take a look at the following steps to answer that question.

  • Look out for yourself – Make sure you are in a safe location after witnessing an accident prior to stopping and, especially, exiting your vehicle.
  • Call for help – Immediately call 911 if you should witness a serious car accident, especially if you believe there have been any injuries or deaths.
  • Provide assistance – Should you choose to enter the accident scene to help, be cautious of other incoming vehicles and only move an individual if it is absolutely necessary to ensure their safety.
  • Don’t be afraid to help – California has a Good Samaritan Law that protects civilians first to the scenes of auto accidents.

As you can see, there is a law in place in California called “the Good Samaritan Law.” This is for individuals outside of law enforcement or emergency personnel who are first at the scene and assist others.

These individuals will not be held liable for any damages, even if their care unintentionally further injures the individuals involved in the accident.

First and foremost, though, is to make sure you are out of harm’s way. Also, remember, do not move someone unless it is absolutely necessary for their survival, such as if they were thrown out into the middle of the road. Moving an injured person can very easily exacerbate pre-existing injuries.

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What to Do if You’re Involved in an Accident in California

Keep calm and check on your loved ones. Nothing is more important than safety. From there, you stay at the scene, call the police, take pictures, exchange information, report the accident, and seek medical attention.

After an accident, you may have questions about the impact on your license and insurance. Do insurance companies report accidents to the DMV in California? You may have an increase in your rates after an accident, but unless there is a violation of the law involved in the accident, it won’t be reported to the DMV.

Prior to this point, though, you get coverage. A good way to get a start in finding the right provider for you is by looking at A.M. Best Ratings. The following table serves as a key in regards to A.M. Best’s rating scale.

A.M. Best Ratings Scale for Auto Insurance Companies
CategoriesRating SymbolsRating NotchesComments
SuperiorA+A++Assigned to insurance companies that have a superior ability to meet their ongoing insurance obligations
ExcellentAA-Assigned to insurance companies that have an excellent ability to meet their ongoing insurance obligations
GoodB+B++Assigned to insurance companies that have a good ability to meet their ongoing insurance obligations
FairBB-Assigned to insurance companies that have a fair ability to meet their ongoing insurance obligations
Financial strength is vulnerable to adverse changes in underwriting and economic conditions
MarginalC+C++Assigned to insurance companies that have a marginal ability to meet their ongoing insurance obligations
Financial strength is vulnerable to adverse changes in underwriting and economic conditions
WeakCC-Assigned to insurance companies that have a weak ability to meet their ongoing insurance obligations
Financial strength is very vulnerable to adverse changes in underwriting and economic conditions
PoorD-Assigned to insurance companies that have a poor ability to meet their ongoing insurance obligations
Financial strength is extremely vulnerable to adverse changes in underwriting and economic conditions
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Another component to A.M. Best’s rating system is the outlook for an insurer. This can fall under one of three categories: positive, negative, or stable.

Now that we’ve analyzed the scale in full, where do California’s insurers fall on it? Let’s take a look at another table.

A.M. Best Ratings of California Auto Insurance Companies
CompaniesFinancial Stability RatingFinancial Stability Rating Outlook/Implication
State FarmA++Stable
Allied Insurance A+Negative
Dairyland InsuranceA+Stable
The Hartford A+Stable
Mercury Insurance Company / California Automobile Insurance CompanyA+Negative
Victoria Insurance A+Negative
21st Century Insurance CompanyAStable
Explorer Insurance Company AStable
Foremost InsuranceAStable
Infinity Auto InsuranceA u Negative
Liberty MutualA Stable
MAPFRE InsuranceAStable
Markel InsuranceAStable
Capital Insurance Group A-Stable
Kemper InsuranceA- uDeveloping
National GeneralA-Stable
Wawanesa InsuranceA-Negative
California CasualtyB++Stable
Anchor General Insurance BStable
Alliance United Insurance Company NRN/A
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As you can see, the majority of insurers in California have a stable outlook, so you have plenty of suitable choices. In short, though, California is not a no-fault state. That is not to say you may not be living in one currently.

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What about other types of fault laws in California?

There are other situations where fault and no-fault laws apply. Let’s cover a few of them.

California is a no-fault state for divorce. That’s the one exception to tort law that makes California a no-fault state — divorce. California is a no-fault divorce state, which means that the individual asking for the divorce does not have to prove that the other member of the marriage or domestic partnership committed wrongdoing. When did California become a no-fault divorce state? that took place in 1970.

You may also be asking “Is California a no-fault state for employment?” The short answer is yes, most states are. It generally is not called no-fault for employment, though, it is called at-will employment. Basically, an employer can fire you without warning for any reason, provided it’s a legal one.

Check out the complete list of no-fault insurance law states to see if you are required to gain personal injury protection on top of collision, liability, and comprehensive coverages.

You have plenty of options, so enter your ZIP code into our helpful tool below to get California car insurance quotes now.