Drivers Financial Responsibility Requirements Under California Law

When you’re shopping for automobile insurance, you should choose a policy to help protect you financially. Not only should it cover your costs if there is an accident, but if you’re found at fault, the policy should cover the other party’s expenses as well. Here are some of the coverage requirements you need to know […]

When you’re shopping for automobile insurance, you should choose a policy to help protect you financially. Not only should it cover your costs if there is an accident, but if you’re found at fault, the policy should cover the other party’s expenses as well. Here are some of the coverage requirements you need to know when requesting California auto insurance quotes.

Minimal Liability Coverage

Whether your insurance policy is for full coverage or liability only, the state requires it to have these coverage limits:

  • $15,000 if an injury or death occurs to one person in an accident.
  • $30,000 per person if two or more are injured or die in an accident.
  • $5,000 to coverage property damage due to an accident.

Since these are the minimal requirements, you should consider finding a policy with higher liability coverage as the property damage includes vehicles and it could be considerable higher depending on the make and model of the other vehicle.

Self-Coverage

Drivers are not required to carry auto insurance in California, but they must comply with financial responsibility laws. If they don’t buy insurance, drivers must:

  • Make a deposit of $35,000 with California DMV.
  • Obtain a self-insurance certificate from the DMV, or
  • Get a surety bond worth $35,000 from someone legally allowed to do business in the state.

Most drivers choose to buy insurance because it is a far less expensive than depositing $35,000 in cash. As this is the minimum amount, if the injured or deceased’s party’s expenses run higher than the amount of the coverage or the required funds, then drivers would be obligated to pay the difference.

Since most lenders require full coverage for cars bought on credit, the liability coverage is usually much higher so the vehicle can be paid off if an accident occurs and your vehicle is totaled.