In California, the car owners must meet the minimum liability insurance requirements. Liability insurance covers the medical and property damage costs of the third party if you are responsible for causing the accident. Liability insurance is necessary because California is famous for its notorious drivers. The high accident rate had caused the legislators in California to set a requirement for the liability insurance in order to reduce the accident expenses. The California legislators encourage the residents to purchase more than the minimum liability insurance. By purchasing more insurance, you will reduce the risk of becoming bankrupt.
The minimum requirement for liability insurance is $15,000 per person. If the accident involved injuries of more than one person, the insurance must pay $30,000 for the medical cost. The minimum property damage insurance requirement is $5,000. The minimum PIP coverage requirement is $10,000 in California. Some people claim that the PIP coverage is not a necessary requirement because of the tort system. In California, the tort system is used find out the person that is at fault. The person who is at fault will pay for all the damages in the accident.
If you don’t want to purchase auto insurance, you must have a $35,000 cash deposit with DMV, or a DMV self insurance certificate. Alternatively, you have to possess the surety bond of $35,000 from a California based company. If your car insurance is expired, you have to quickly renew it. DMV will be notified as soon as your policy is cancelled. After your policy is cancelled, you must submit a replacement policy within 45 days. Your vehicle registrations will be suspended if you fail to submit the insurance important to DMV in one month.
