California auto insurance laws were beefed up in 2006 and changed to ensure that vehicles driven on California roads have liability insurance that provides financial responsibility for any damage or injury caused by a traffic collision – regardless of who’s at fault – and to remove vehicles that are uninsured from the highways.

Mandatory Requirements

California auto insurance laws require vehicles operated or parked on state highways to have financial responsibility. This means that evidende of financial responsibility must be carried in the vehicle at all times and provided as specified by California law:

  • When requested by law enforcement
  • When renewing vehicle registration
  • When the vehicle is involved in a traffic collision

Providing Evidence of Financial Responsibility

California auto insurance laws further stipulate that in some cases further information may need to be submitted to the Department of Motor Vehicles (DMV) by providing:

  • Insurance company documentation or insurance card
  • Authorization letter from the DMV – if you are self-insured or a cash depositor
  • California Proof of Insurance Certificate (SR-22) for broad coverage or owner’s policy
  • Notification of Alternative Forms of Financial Responsibility (REG 5085) form for a vehicle covered by commercial or business policies – and being registered for the first time
  • A statement of facts (REG 256) certifying that the motor carrier has evidence of insurance on file with the Public Utilities Commission (PUC) or DMV pursuant to CVC §34630
  • Evidence that the vehicle is leased or owned by a government entity – as defined in Government Code §811.2

Minimum Liability Insurance Requirements

According to California code, private passenger vehicles have the following minimum liability insurance requirements:

  • $15,000 for injury/death to one person
  • $30,000 for injury/death to more than one person
  • $5,000 for damage to property

Financial Responsibility Types

There are four types or ways of demonstrating financial responsibility to satisfy California auto insurance laws. These include having a motor vehicle liability insurance policy, a cash deposit of $35,000 with the California DMV, a DMV-issued certificate of self-insurance, or a surety bond for $35,000 from a company that is licensed to do business in the state.

Vehicle Registration Suspension and Other Penalties

California auto insurance laws provide that a vehicle’s registration can be suspended if the DMV has been notified of a vehicle’s insurance policy cancellation and if a renewal policy has not been submitted within 45 days, insurance information is not submitted to the DMV within 30 days after a registration card is issued (upon initial registration or transfer of vehicle ownership), or the registration was obtained by providing false evidence of insurance.

For further information on California auto insurance laws, see the California Deparment of Motor Vehicles website.

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