Having valid car insurance is one of the conditions that must be met before you are considered to be legally qualified to own a registered and duly licensed vehicle in the state of California.
As a driver in California, you are expected to carry evidence of vehicle insurance in your vehicle at all times. In fact, it is mandatory that you provide such evidence in the following situations:
- When requested by a law enforcement agent.
- When applying for renewal of vehicle license.
- When your vehicle is involved in an accident.
The state of California is not a “no-liability” insurance state. As a result, every driver and/or vehicle owner in the state is expected to bear the financial burden for any damages resulting from their actions while driving. For this reason, vehicle insurance in California is also referred to as “Financial Responsibility”. Before your vehicle can be licensed in the state, you are required to present proof of financial ability to pay for damages arising from an accident. This proof could come in the form of:
- A California vehicle insurance policy
- A self-insurance certificate issued by the Department of Motor Vehicle (DMV)
- A cash deposit of $35,000 in the custody of DMV
- A $35,000 surety bond issued by a company registered in the state of California.
The state has different types of vehicle insurance, but the mandatory ones stipulated by law are grouped under the category called Liability Coverage.
Types of Liability Coverage
Liability insurance provides cover for you up to the following amounts:
- $15,000 for injury or death of 1 person.
- $30,000 for 2 or more people injured. Note that $30,000 is the maximum limit for death or injury to more than one person in any given road accident.
- $5,000 as additional coverage for any property damaged in the accident.
Other types of (non-compulsory) car insurance in California
There are also other types of optional vehicle insurance coverage which you can also take out in addition to the mandatory Liability Insurance. These may include Collision insurance, Comprehensive Insurance, Personal Injury Protection Insurance, Med Pay Insurance, Uninsured/Underinsured Motorist Coverage, etc. Although you are not mandated by law to have these types of insurance, it will be in your best interest to have some of them; especially the comprehensive insurance, in addition to the compulsory liability insurance.
Penalties for failure to show evidence of insurance coverage
As stated earlier, you are mandated by law to have documented evidence of financial responsibility in your vehicle at all times. If in the event that your vehicle is pulled over by law enforcement, and you are unable to provide proof of insurance, you will either receive a citation or the vehicle may end up being impounded depending on the prevailing conditions. In the case of a citation, this can be overturned in a court upon your provision of relevant documents. This will however come at a cost to you in the form of court fees and other legal fees.
In the event of an accident while driving without proof of financial responsibility, your license will be suspended. This penalty applies irrespective of whether the vehicle was being driven by a person other than you when this accident occurred.
Can you get low cost insurance in California?
The state of California is known for having notoriously high insurance costs. However, for individuals who for obvious reasons find it difficult to shoulder the financial burden of vehicle insurance in the state, the authorities have provided a lifeline in the form of the California Low Cost Auto Insurance Program (CLCA). The basic conditions which you must meet before you are considered eligible for this program are as follows:
- You must be at least 19 years old.
- You must have a valid California driver’s license.
- You must meet stipulated income eligibility guidelines.
- Your vehicle should be valued at $25,000 or less.
For details about this program and how to make the most of it, click here.