Do I Need Auto Insurance?

California's compulsory financial responsibility law requires that every driver and vehicle owner have insurance or other proof of financial responsibility.  You must carry written evidence of financial responsibility whenever you drive.  For most of us, that means evidence of an automobile insurance policy.

Often, that evidence takes the form of an insurance card issued by your insurer.  However, if the name of the insurer and the policy number are contained in the DMV's vehicle registration records, you may simply write your automobile insurance policy number and the name of the insurer on the back of your vehicle registration.  If you don't have this evidence to show to a police officer after a citation stop or an accident, you may have to pay a fine and a court may impound your vehicle.  If you have an accident and can't show proof of financial responsibility, you may also lose your driver's license for up to four years.  

The law says you can prove your financial responsibility in one of these ways:

• Insurance. For most drivers, you must have liability insurance that provides at least $5,000 coverage for property damage for one accident, $15,000 for one person injured or killed in an accident, and $30,000 for two or more people injured or killed.  Low-income drivers in certain counties may qualify for state-sposored low-cost liability insurance that has lower coverage amounts.

• Cash. You can deposit $35,000 in cash with the DMV.

• Bond. The DMV also will accept a bond for $35,000, issued by a California-licensed surety bonding company.

• A DMV-issued certificate of self-insurance.