Why Did My California Car Insurance Rate Go Up in 2025?

It may seem like your auto insurance goes up every time you renew. There are plenty of reasons why this happens – more claims, inflation, higher repair costs – but in 2025, Californians saw an even larger increase than normal. That’s because the state legislature raised the required minimum liability limits, and these new limits took effect Jan. 1.

What does this mean to you as an insured driver in California? On the one hand it means you will be more protected if you are involved in an accident someone else causes. On the other hand, it will likely mean your car insurance rates will be going up – maybe by as much as 54%.

Acceptance Insurance has a reputation for providing affordable, non-standard coverage, so it’s important to understand how these changes will affect their customers. Acceptance believes a large amount of their non-standard drivers here will be affected.

How can you keep your rates affordable now that the minimum limits have increased? Keep reading for more information to help you stay ahead of these new standards.

2025 in California: What’s on the Horizon for Drivers

California drivers renewing their auto coverage in 2025 will be subject to the new minimum liability limits, as set by Senate Bill 1107. These limits were increased to better assist Californians involved in accidents, helping them recover losses. Previous liability limits were insufficient for covering repair costs and medical bills at today’s prices.

The new California car insurance changes are:

• $30,000 bodily injury liability per person
• $60,000 bodily injury liability per accident
• $15,000 property damage liability per accident

A Snapshot of the Past: Understanding Previous Limits

Liability is the amount your insurer will pay in an approved claim. It is composed of two parts: bodily injury/death and property damage. It is intended to help pay for injuries and damages to another person when you are at fault for an accident.

Before Jan. 1, the liability limits for California were:

• $15,000 bodily injury liability per person
• $30,000 bodily injury liability per accident
• $5,000 property damage liability per accident

For example, a driver who chooses to carry the required minimum would have $5,000 available from their insurer to help pay for damages in an accident they cause. In today’s market, $5,000 won’t go far if that driver smashes into someone’s brand new Mercedes. And if you are the driver of that Mercedes, you’ll either have to sue for the rest or pay for it out of pocket.

Why Did Minimum Insurance Limits Increase in California?

Minimum liability limits were raised to better address today’s prices for medical and repair costs after an accident. Most states require their drivers to carry a minimum amount of liability insurance in order to help pay for accidents they cause and to benefit the victims of these accidents.

California has lagged behind other states with limits that are too low when people are faced with today’s repair costs and medical bills. You can sue another driver who injures you, but if they have nothing, you won’t get far. This is intended to help pay for your costs in today’s world.

How This Change in Insurance Premiums Affects You

It is estimated that many drivers who carry non-standard insurance will see an increase in their premium. Plus, California already has a higher than normal amount of uninsured drivers (17% according to the Insurance Information Institute) and this rate hike could cause that number to rise even more.

Currently, there are 6% of underinsured drivers in California. This means they have insurance, but probably not enough to cover all the damage they may cause in a wreck. These are drivers who are most likely carrying the minimum amount required and their rates will almost surely increase with the new limits.

Navigating the Changing Tides of Auto Insurance

Most Californians expect to see an increase in their premiums at renewal time, but you may not have been aware just how much of a change you could see now that the law has changed. They say being prepared is the best way to handle challenges, so understanding this law and how it might affect you is critical, so you know how to beat insurance rate hikes.

With some foreknowledge, you can prepare your finances and learn some tips for managing the costs.

Strategies for Managing Higher Costs

There are numerous ways you can have a direct hand in how much you pay for your insurance. Of course, driving safely is one of the most important factors that affect auto insurance rates. However, if you have a slightly dinged up record, you can work hard to improve it by keeping insured and driving safely. You will see your rates level out once the insurance industry is more confident you will not cost them money in a claim. Here are a few other tips to help manage increasing insurance prices:

• Shop around. At Acceptance, our independent agents can do the work for you, searching through carriers and giving you options.
• Choose a reliable car with a safe record. Some cars are just cheaper to repair and not as prone to theft.
• Discounts are your friend. Do you qualify for one or more? For example, bundling your policies can provide a hefty discount.
• Keep insured. A gap in your insurance coverage is a red flag to insurers, making your rates increase.

The Critical Role of Re-evaluating Your Insurance Needs

It’s important to consider your insurance needs, especially as your circumstances change in life. To get the most out of your policy at the best price, reevaluate at your renewal time or before if something changes. For example, if you begin working from home, you may qualify for a less mileage discount. Likewise, if you get married or have a baby, you may need to adjust your policy.

Find Affordable Insurance Coverage in California with Acceptance Insurance

Even though California’s car insurance rates may go up now that the new law is in effect, your friendly neighborhood Acceptance agent is here to help you find affordable and flexible coverage that meets your needs – even if your driving history is a little banged up.

For a simple, fast and free quote, you can check us out online, give us a call at 877-405-7102 or stop by one of our convenient locations.