Basic car insurance requirements in California

In 2006 the laws in California were changed to ensure that all privately owned vehicles that are on the state’s roads have insurance liability coverage for any damage or injury caused by a collision, regardless of the party at fault. The mandatory requirements are that all vehicles operated or parked on roadways in the state of California must have proof of financial responsibility available at all times. This evidence must be provided when asked for by law enforcement, when the vehicle is involved in a traffic accident, irrespective of who is at fault and when renewing vehicle registration. Failure to provide the required proof may result in severe penalties.

Additional requirements

In addition to the mandatory requirements, there are some additional requirements that may also be asked for by the Department of Motor Vehicles (DMV). These include:
  • An ID card or other equivalent document issued by your insurance company
  • Cash depositors or those who are self-insured may be asked for a DMV authorization letter
  • California Proof of Insurance Certificate (SR-22) for owner’ policy or broad coverage
  • If a vehicle is covered by commercial or business policies and is being registered for the first time, as Notification of Alternative Forms of Financial responsibility (REG 5085) may be required
Minimum liability requirements in California of private passenger vehicles

The following are the minimum liability requirements required for operating a private vehicle in California:
  • Death and / or injury to one person - $15,000
  • Death and / or injury to more than one person - $30,000
  • Damage to property – $5,000
It is important to note that liability insurance specifically covers compensation to a person other than the policy holder for any injury of property damage. Comprehensive and collision insurance do not meet this requirement. Those who are financially unable to meet these liability insurance requirements may eligible for coverage under the California Low Cost Automobile Insurance Program.

Violations could resulting in suspension of vehicle registration

Your vehicle registration could be suspended if:
  • The DMV is is notified by the insurance company that a policy has been cancelled and a replacement policy is not issued within 45 days
  • At the time of initial registration or transfer of ownership the required insurance information is not submitted to the DMV within 30 days
  • The registration is obtained by providing false insurance information
If you receive notice from the DMV that your vehicle registration is going to be suspended or has been suspended, it is possible submit the required information and reinstatement fee and be able to operate the vehicle.

The requirements are simple

As can be seen, the basic insurance requirements in California are really quite simple and it should not be difficult for anyone to ensure that they are followed. However, this is where many people make mistakes. They either take the procedure for granted and make careless mistakes or do all that is required of them and then forget about it and neglect their renewals and so on. Adhering to the insurance requirements is simple – just keep a checklist of all that is required and place a renewal reminder in your planner or computer diary.
It is also worthwhile noting that the minimum liability requirements are just that – the minimum. Any serious accident could make you liable for much more and it is a good idea to discuss your driving habits, typical trips, vacation journeys and other car usage information with an insurance agent who will be able to help you find the kind of coverage that is best for you.


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