- Liability car insurance is mandatory in California.accident image by ann triling from Fotolia.com
In California, all motorists are required to have liability insurance in the event they are in a vehicle accident. Liability insurance covers the monetary compensation of others involved in the accident if they suffer injuries and/or their property is damaged. Under state law, either car insurance or another type of proof of financial responsibility must be on file for any vehicle operated on, or parked on, California roadways. - Liability insurance or a substitute method of paying for damages is mandatory for all drivers in California. Even residents of the state who own vehicles but don't drive are required to have a minimum of liability insurance or another California Department of Motor Vehicles-approved method of paying for damages.
- Other than having a liability policy, the California DMV accepts three methods of financial responsibility: a cash deposit of $35,000, which must be in the DMV's possession; a $35,000 surety bond from a California-licensed company; or a DMV-issued self-insurance certificate. The state DMV's Financial Responsibility Unit oversees cash deposits and self-insurance. Companies that issue surety bonds can be located through the state Department of Insurance.
- If the type of financial responsibility assumed by the motorist is a liability insurance policy, then the minimum insurance requirement to cover damage to property is $5,000. Injury or death to one person must be covered by a minimum $15,000 policy. Injury or death to more than one person must be covered by a minimum $30,000 policy.
- If a policyholder cancels his policy and a replacement policy isn't registered with the DMV within 45 days, then the vehicle's registration is subject to suspension. The registration can also be suspended if the vehicle changes ownership and insurance information for the vehicle is not provided to the DMV within 30 days of the ownership change.
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