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Legal Requirements for Auto Insurance in California

1. What is auto insurance?

Auto Insurance is an agreement between the automobile owner and any private insurer where the applicant pays a fixed monthly premium against which the company insures the applicant’s vehicle from punitive damages to a certain limit.

Auto insurance in California assures liability, property and medical coverage if asked for.

-Liability coverage covers all charges resulting out of injuries and deaths.

-Property coverage insures the owner from damages caused to other’s property.

-Medical coverage insures against medical fee and costs.

2. How is the limit decided?

The limit is primarily decided, rather the insurance value by the premium paid, and also on the tenure of the auto insurance policy in California. The vehicle type and its state is also considered and also the model in case of a car.

3. Is insurance required in case of a car being rented?

Any owner to any vehicle or car must have proper documents, and attested auto insurance in California, even if the car is rental not personal. There is no difference between owning and keeping with you and owning and giving it on rent.

4. Cancellation of Policy

Cancellation can occur in the following scenarios

• Premium not paid

• Committed any fraud

• Suspension of driver’s license

• Shown wrong facts during application

Renewal of policy occurs at the end of the policy term, generally the insurer sends a renewal form.

5. Difference between cancellation and non-renewal:

Cancellation means ending the policy mid way generally due to nonpayment while non-renewal means not renewing the policy term after the previous term has been completed.

What are California’s Legal Requirements for Financial Responsibility towards the damages caused by their vehicle?

The law of the state of California states that all owners are to be held responsible for damages caused by their vehicles, and so they must keep proper arrangements in place to meet the probable damages.

6. How can I avail the Low Cost Auto Insurance Program?

It is a scheme introduced by the state of California to offer automobile liability coverage to the poor, ones who have lesser means of earning, and cannot afford to avail the costlier premiums.

The criteria’s to be fulfilled are:

• Low household income

• Records of past driving behaviors (whether been at fault)

• Purchase cost of vehicle.

7. What is meant by the basic auto policy?

It means the most basic plan for the owner, which gets him the minimum liability coverage as stated by the state administration. The state of California sets the minimum liability ceiling at 15/30/5, which means $15000 and $30000 for bodily injuries and $5000 for property damage.

8. Will I be reprimanded if I ignore this law?

As per the state laws, all owners must have proper insurance plans, which if not maintained, they must ensure a guarantee of meeting all future liabilities, else they will be nailed under illegal activities, and

tough steps will be taken. Thus it makes it mandatory for all car owners, to have auto insurance in recognized by the state of California.

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