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The California Senate Bill 1107


What is California Senate Bill 1107 about?

Major changes in your policy limits are about to happen in the coming years.

If you don’t know what a policy limit is, it is basically the most money you’re allowed to get in the event of an accident. This varies depending on the insurance package people decide to get.

Let’s say you got into a car accident and you were not at fault. If the person who hit you carries with them an insurance package with the minimum policy limit, the maximum compensation you’ll be able to receive for your injury will only be $15,000 regardless of how high your medical bills ended up being. However, if more than one person in your vehicle got injured because of the accident, you could get $30,000 maximum instead of $15,000.

Aside from the compensation you could get for your injury, the current minimum auto insurance requirement also states that you may be entitled to $5,000 for any damages done to your vehicle.

But all of this is about to change in 2025. California governor Gavin Newsom has recently signed a senate bill into law that will impact the world of personal injury as we know it. The ratification of the Senate Bill 1107 will raise the minimum policy limit to $30,000 for an injury sustained by one person. This is double the amount of the current requirement.

The current law will also raise the maximum compensation to $60,000 for accidents that have led to the injury or death of more than one person, as well as $15,000 for property damage, both of which are double and triple the current minimum liability insurance requirements respectively.

Ever since the bill has been signed into law, there has been a lot of conversation surrounding it. But this isn’t particularly new. In fact, it’s been known in personal injury law circles to be controversial ever since CA SB 1107 was introduced.

Let’s explore why that is.

Disapproval surrounding Senate Bill 1107 California

Car Insurance may become less affordable 

Since insurance companies are now required to increase coverage for their minimum policy holders, turning CA SB 1107 into law will most likely mean that insurance rates are going to increase. This is a problem for a lot of people, especially those who are low-income and are barely scraping pennies to afford insurance. With rising cost and inflation, this will put a lot of people at greater financial disadvantage.

It’s only natural for people to be worried about their finances when hearing about this change taking place. However, California’s Insurance Commissioner Ricardo Lara — whose job is to regulate the insurance industry — will start working on rate applications in February 2023. He is supposed to act in the best interest of his constituents. Since he represents YOU, you have every right to address your concerns about the bill by contacting him. Rate applications are said to be due on the first day of July that year, so make sure to do so as soon as possible.

More uninsured drivers

If the insurance rates are going to increase as predicted, then a lot of people will more likely opt out of getting car insurance altogether. This makes driving all the more dangerous for everyone in California especially as traffic deaths and fatalities have increased in recent years. If insurance rates face a significant increase because of this bill, then hit and run accidents may also be on the rise as people will further feel compelled to leave the scene of the crime when they don’t have insurance. For the injured party in this scenario, they will need to purchase uninsured motorist coverage which is also an added cost. A lot of people feel that this bill will not only make driving more dangerous, but it will also make it less economical for the average joe.

Why Senate Bill 1107 is great for Personal Injury cases

But while a lot of people criticize the bill for making insurance less affordable, personal injury experts claim that turning it into law actually brings a lot of benefits.

The minimum requirement for insurance policy limits today are often not enough to cover medical bills, especially for serious injuries like traumatic brain injuries or spinal cord injuries. A lot of victims have to deal with the difficulties of recovery on top of the mounting bills for getting treatment. Even though treatment will end up costing victims hundreds and thousands of dollars, they may still end up only getting $15,000 at most due to the fact that the person responsible for their injury only has car insurance with the minimum policy limit required by the state of California.

So not only are victims of serious injuries left with mounting medical debt, their life is forever altered with not enough compensation to get them through multiple trips to the doctor’s office.

The changes brought by this new bill could change this ongoing problem in the world of personal injury. With policy limits increasing double and triple the amount for injury/death and property damage respectively, victims will finally be compensated in ways that will bring them closer to the justice they deserve.

A lot of personal injury experts acknowledge that while it is a definite possibility that insurance rates are going to go up, the adequate protections people will be afforded as a result of this bill is an excellent pay-off. After all, no price is too high for the safety of you and your loved ones.

The Future of SB 1107

More increases are bound to happen. In 2035, the minimum requirements for policy limits will increase. For an injury or death, there will be an increase of $20,000 and double that if the accident has affected more than one person. In addition, there will be a $10,000 increase on property damages. The state’s insurance commissioner will be working on rate applications two years prior to regulate insurance rates.