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Car Insurance for California Drivers

Car insurance for California drivers is a legal responsibility. The state operates under a financial responsibility system as it pertains to auto liability coverage. Under this system, all motorists must demonstrate financial responsibility to take care of their obligations in liability accident events. There are a number of ways to meet these obligations and demonstrate financial responsibility. Motorists in CA must choose one of these approved options if they are to get their vehicles legally insured and registered with the state to share the roads with fellow travelers.

Financial Responsibility for CA Motorists

As a financial responsibility state, California has certain insurance requirements in place for vehicle registration in keeping with its vehicle financial responsibility and suspension laws. The purpose of the law is to ensure that vehicles driven on state roads have liability insurance that meets state standards, providing California policy holders with the means to uphold their financial responsibility for any damage or medical expense they might cause in at fault accidents. Secondarily, the law exists as a means to remove uninsured motorists from the roads [1].

Auto insurance providers in the state are required by law to submit private use vehicle insurance information to the Department of Motor Vehicles. This electronic reporting allows the DMV to keep track of insurance coverage including cancellations and policy lapses, giving them the power to take action against motorists who fail to maintain adequate insurance coverage on their vehicles. This action can include suspension of driving privileges. Police officers and court employees all have electronic access to this information as well as the DMV.

Mandatory California Auto Insurance Requirements

As previously stated, financial responsibility is required of all drivers and all vehicles in the state. There are several ways auto owners can establish financial responsibility with the state. Whichever option you choose as a driver, you must always carry evidence of financial responsibility with you in your vehicle at all times. There are certain times when this proof is necessary: when it is requested by law enforcement officers, when you are renewing automobile registration, and when you are involved in a car accident.

Additional insurance evidence in some cases needs to be submitted to the Department of Motor Vehicles. An identification card or other documentation from your auto insurance provider, or a DMV authorization letter if you are a cash depositor or are self insured, indicate your insurance status. Cash depositors are those that have the financial resources to self insure, as indicated by cash deposits on hand with the DMV in the amount of state liability insurance minimums. Self insured individuals may also be those who meet fleet ownership requirements as set forth by the state.

Other acceptable forms of documentation that might be required include an SR 22 form for broad coverage required for certain drivers; written evidence that the vehicle in question is owned or leased by a public entity as defined in the California Government Code; a Notification of Alternative Forms of Financial Responsibility, a form used for vehicles being covered for commercial use and being registered for the first time; or a statement of facts certifying that the auto insurance company has evidence of insurance on file with the DMV or the Public Utilities Commission [1].

Minimum Liability Insurance in CA

Private passenger vehicle in the state of California must be covered with at least the state mandated levels of auto liability insurance protection. For bodily injury/death, the minimums are $15,000 per person and $30,000 per accident. For property damage, the state minimum level of auto liability coverage is $5,000. Drivers in the state can meet these requirements by purchasing liability insurance from a state licensed carrier, by placing a cash deposit of $35,000 with the Department of Motor Vehicles, by obtaining a surety bond for $35,000 from a company licensed to sell bonds in the state, or by getting a self insurance certificate from the DMV. For drivers who qualify, there is a special program called the California Low Cost Automobile Insurance Program with lower liability requirements at discounted prices [1].

Under the terms of CA auto insurance regulations, vehicles are subject to registration suspension under certain conditions. When the DMV has been notified that a policy has been cancelled and no replacement policy has been put into place after 45 days; when insurance information is not submitted to the DMV within 30 days after ownership transfer and the issuance of initial registration; and when it is found that registration has been obtained via false evidence of insurance, registration can be suspended [1].

Other consequences may also follow. Motorists are urged to maintain adequate and current auto insurance at all time and to keep their registration up to date to avoid legal trouble with their insurance coverage.

[1] http://www.dmv.ca.gov/pubs/brochures/fast_facts/ffvr18.htm Retrieved 2010-05-14.

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