California Auto Insurance Requirements

The state of California requires you to comply with the minimum financial responsibility laws concerning accident coverage before you may own and operate a motorized vehicle. The minimum amount of liability auto insurance you must possess is $15,000.00 for death or injury of each individual involved in the accident, $30,000.00 for all individuals in an accident and $5,000.00 of property damage.

This coverage may be provided in one of four methods. The first is a policy with an insurance company which provides the mandatory automobile liability coverage. The second is a $35,000.00 cash deposit with the California Department of Motor Vehicles which must be purchased by contacting the California DMV. The third method applies to company fleet vehicles when more than 25 cars are owned. In this case, the DMV will issue a certificate of self insurance when the owner presents proof that the vehicles are covered in sufficient amounts. The fourth method of covering your vehicle is a surety bond in the amount of $35,000.00 which will be sent to you by a licensed insurance company in the state of California. To obtain a surety bond you must contact the California Department of Insurance. Any purchase of auto insurance in the state of California will include the mandatory minimum liability insurance.

Rental vehicles are included in the mandatory minimum liability insurance. Generally, your private auto insurance policy will also cover any rental vehicles. If your private policy does not cover a rental vehicle, it is a good possibility that the credit card you use to rent the vehicle will also include an insurance policy on the rental car. If neither one of these options are available, you will need to purchase minimum coverage from the rental car company. Be sure to carry a copy of your rental car agreement in the vehicle for the term of the contract as this will be your proof of insurance.

Although underinsured and uninsured coverage is not required in California, your auto insurance company may suggest you carry the coverage. They usually recommend the minimum amount of $50,000.00.

All registered vehicles must be covered with the mandatory liability insurance in order to be registered. You must be able to prove you have the mandatory coverage at all times. Insurance companies in the state of California will report any lapse of coverage or policy cancellations to the state electronically. You must provide proof of insurance the first time you register your car and for each consecutive time you renew your registration. You have 30 days to obtain the minimal auto insurance coverage on a first time registration and you have 45 days to replace it if you cancel or change insurance companies. If you do not have the proper coverage by these deadlines, your registration may be suspended or terminated. In addition, you may be fined and have your vehicle impounded. Should you cause an accident while you are uninsured, you will still be responsible for all damages and expenses.

You must carry and provide proof of insurance even if you did not cause the accident. This law is in place to help remove uninsured vehicles from California roads. Insurance companies must electronically report private insurance policies, but they are not required to report coverage of commercial or business vehicles. The commercial business customers must submit paper copies of their insurance coverage when registering their vehicles. If you fail to replace your policy within the 45 day time frame, the insurance company does not provide electronic proof of insurance within 30 days of your vehicle registration, or you falsify your information, your vehicle registration can be suspended.

Mandatory insurance is not required on all vehicles. Off highway vehicles, trailers, government vehicles, special equipment vehicles and vehicles registered under the planned nonoperation certificate, such as vehicles which are being restored, do not require the minimum auto liability insurance.

All vehicles, operational or not, must be covered by insurance as long as it is parked on California public roadways. You must produce your proof of coverage when an officer of the law requests it or upon request when you renew the vehicle at registration. Proof of insurance or financial responsibility must be provided immediately in the case of an accident. It is best to carry proof of financial responsibility or insurance in your vehicles at all times.



Your insurance company must electronically file your proof of insurance with the state but you may be asked to submit additional proof. Documents from the insurance company, an identification card from the insurance company, a DMV authorization letter for cash depositors or self insured individuals, California proof of insurance Certificate (SR-22), for broad coverage (only the owner’s policy), proof that the vehicle is a government vehicle, or motor carriers with insurance on file with the Public Utilities Commission or the DMV are acceptable forms of proof.

If you are not using your vehicle and it is sitting on private property, you need to get in contact with the DMV and fill out an affidavit of Non-Use before you cancel the vehicle’s coverage. Once you have been notified that you need to renew the policy, you cannot file the affidavit of Non-Use. You must fill out a Certificate of Non-Use/Planned Non-Operation Certification. Filling out these forms before canceling the insurance policy will prevent the vehicle registration from being suspended. When you are ready to put the car back on the road, you will be required to submit a Statement of Facts and prove the car is once more insured or otherwise covered.



When you fail to maintain or obtain the minimum auto insurance or proof of financial responsibility, your registration will be revoked. This will be the result of a cancelled policy, failure to provide proof of a replacement policy within 45 days, your insurance company fails to electronically file your coverage within 30 days of the registration for the first time, or you falsify information.

You may receive a ticket and fines of up to $1,000.00 if you do not provide evidence of insurance or financial responsibility at the time of an accident, whether you are at fault or not. You must also produce proof of coverage during a routine traffic stop. Your car can be impounded and you will be held responsible for damages and injuries of any accident you cause. Furthermore, whatever the circumstances of the fines, suspended registration, or impoundment, you will be required to appear in court to clear the charges. To reinstate your vehicle registration, you will have to contact the Vehicle Registration Financial Responsibility Program.