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An Overview into the California Auto Insurance Laws

The laws for auto insurance in California are contained in the California Insurance Code. These are the laws in California concerning insurance matters that have been coded. Enforcement of the laws is overseen by the California Department of Insurance while executing its policies too. Laws may differ from state to state and so understanding the laws that apply to you especially if you are in California is paramount. There are regulations and rules that apply to most states generally but some apply to the state of California specifically.

It is mandatory for all motorists in California to have liability insurance in case an accident was to occur. This essentially covers the compensation (in monetary terms) of the other parties involved in the accident and as a result, got injured or their property destroyed. Auto insurance in California is guided by laws that require all vehicles, parked or operating on any road, have car insurance. Proof of monetary responsibility may also suffice. It must be on file that one can be able to pay for damages in case of an accident. This applies even to vehicle owners who do not drive their cars. They must have some sort of minimum liability insurance or a method of paying for damages approved by the state of California.

There are three methods that the California Department of Motor Vehicles accepts such financial responsibility. The first is a surety bond of $35,000 from a company licensed in California and can be found easily by searching at the Department of Insurance. The second is a cash deposit of the same amount given and possessed by the California DMV and lastly a self-insurance certificate from the California DMV.

If a vehicle owner takes up a liability insurance policy in California, then the minimum requirement for the insurance that can cover the cost of damages to property is $5,000 while injury or death to an individual requires a minimum of $15,000 and $30,000 for more than one person injured or killed in an auto accident.

The California car insurance law is also clear on policyholders that cancel their policy and do not register with the department of motor vehicle within a period of 45 days. In such a case, the law states that the vehicle’s registration will be suspended. This is also the case when the vehicle is sold to another owner,and the new owner does not submit the car insurance information to the California DMV within 30 days since the vehicle got the new owner.

Failure to comply with these auto insurance laws in California can lead to penalties that range from a $200 ticket for first offenders, rising all the way to $1,000 for repeat offenders. To make matters worse you may have to pay for the damages personally and even have your car taken away from you.

Always stay insured and find the best and cheapest auto insurance coverage in California by entering your zip at the start of the page and compare California insurance companies and the offers they have.