California's Compulsory Financial Responsibility Law

California's Compulsory Financial Responsibility Law
by James Hyder

California car auto insurance is weaved into the state's Compulsory Financial Responsibility Law. This law obliges owners and operators of vehicles to take financial responsibility for their actions. This may seem like a very difficult law to enforce, especially if the actions of an individual have expensive ramifications.

Fortunately, auto insurance makes following this particular law relatively easy. The state of California has statutory minimum limits of liability insurance that all owners and operators of motor vehicles must have. These minimum limits are the bare bones of vehicle coverage for a person living in this state.

California Car Auto Insurance Minimums
The policy needs to include at least $15,000 of coverage for death or injury of any individual in a single accident. The policy also needs to have $30,000 for all persons involved in a single accident. This coverage assures everyone involved in the accident that they will receive compensation for their injuries or losses.

Property damage coverage is also necessary when involved in an accident. Hopefully, this is the only harm done in any accident. California auto policies require a minimum of $5,000 property damage coverage for a single accident. This ensures that there will be at least $5,000 worth of repairs delivered after an accident.

How to Achieve Financial Responsibility
Drivers who live in California are required to have at least the minimum liability insurance or they can opt for another approved means to pay for property damage and injury in case of an accident. There are four ways to ensure financial responsibility that are approved by this state.

A person can make a cash deposit of 35,000 dollars with the Department of Motor Vehicles. This is a very expensive approach to assuring financial responsibility but it is an option. Another approach involves a 35,000 surety bond that is issued to a company licensed to conduct business in California.

Some drivers choose to be self insured if they own fleets of more than twenty-five vehicles. These individuals need to have a certificate proving their self-insured status with the Department of Motor Vehicles.

Drivers can also opt to simply purchase auto coverage policies instead. California car insurance is the most popular approach to establishing financial responsibility in this state.