The Golden State follows the Financial Responsibility Law. This basically means that all drivers are legally required to carry proof that they are able to pay for any injuries and/or damages that they are found liable for while operating an automobile. There are fours ways that a motorist can comply with this law; one is to buy a vehicle liability policy which meets the minimum require limits, a person can give a cash deposit in the amount of $35,000 to the DMV, if a person owns a fleet of more than 25 vehicles then they can obtain a certificate of self-insurance issued by the DMV or they can obtain a surety bond from an insurer licensed to do business in the CA.

The most common method used to comply with California auto insurance requirements is by purchasing policies from licensed insurers. The policy must have the minimum liability limits of $15,000 for bodily injury to one person, $30,000 for bodily injuries to two or more people and $5,000 for property damage of another party. Being caught driving without a policy it can result in tickets and fines and if one were to be involved in an accident without the proper coverage they may have their license suspended.

Consider Additional Car Insurance Coverage in CA

One should always consider purchasing more extensive protection and some individuals may be required to. Most importantly is considering to raise the liability limits on a policy above the minimum requirements. The limit required can be quite low when compared to the cost of medical care and the repair or replacement of an automobile. For instance, state law requires motorists to have $5,000 to cover property damage; if a driver is found liable and strikes a luxury vehicle and the damages caused amount to $7,500 then the insurer will pay the $5,000 limit stated on the policy and the policyholder would be required to pay the rest. Raising limits can help avoid these costly situations.

Although not required by law, there are very beneficial types of coverage one should take into consideration. Protection for the damage of an insured’s vehicle is termed as comprehensive and collision and is usually a requirement by financial institutions if a person has taken out a loan on an automobile. This compensates the policyholder minus the deductible chosen for damages to their auto due to collisions, theft, vandalism, fire and many more perils as stated on the terms of policies. Another very important coverage to consider is Uninsured Motorist. This will compensate the insured for injuries and damages caused by an accident with a driver who is uninsured, does not have an adequate policy or if the policyholder is a victim of hit-and-run.

There are many more options to choose from and not all are in need of the same, the California Department of Insurance website lists the available options and what they cover in order to help consumers determine what will benefit their situation.