Basic Facts About California Auto InsuranceAll drivers in the state of California should have California auto insurance because driving without one is a serious offense in this particular state. Driving licenses may be suspended or fines may be imposed to drivers who are not able to present proof of auto insurance policy once it is demanded from them by police officers. Vehicle owners should have auto insurance policies even if they are not the ones driving the vehicles. There are three main reasons why a vehicle driver or owner should purchase California auto insurance policies. The first is for protection against financial risk that comes from injuries and damages caused by vehicle accidents, theft, vandalism or natural disasters. The second reason is to comply with the driving laws in California and lastly, it is requirement for those who have outstanding car loans. The Compulsory Financial Responsibility Law in the state of California obliges all drivers and owners of vehicles to be financially responsible for all consequences that may result from their driving. This regulation likewise sets the minimum liability limits of liability insurance in California at $15,000 for death or injury of one person in a vehicular accident. For multiple injuries or death, minimum liability is set at $30,000. The party deemed to have caused the vehicle accident is likewise liable to pay $5,000 for property damage.
In the state of California, there are four possible ways of accomplishing financial responsibility. The first option is to obtain California auto insurance or motor vehicle liability policy. The second option is to post a cash deposit amounting to $35,000 with the Department of Motor Vehicles (DMV). The third option is to present a certificate of self-insurance issued by DMV specifically for owners of fleets comprising more than 25 vehicle units. The last option is to post a surety bond of $35,000 from a licensed Californian insurance company. Compliance of this requirement is observed strictly in the state and non-compliance can lead to severe penalties. A vehicle driver or owner who does not have California auto insurance policy with statutory liability provisions should have an approved alternative method of settling or paying for bodily injury or property damage resulting from vehicle collisions. Proof of California auto insurance policy or financial responsibility should be presented when a law enforcement officer requests for it, when you figured in a vehicle accident, when registering a car or renewing its registration and when an automobile is inspected. In order to protect the interest of those who have purchased and are still planning to purchase California auto insurance policy, the California Department of Insurance is formed. This agency is responsible for regulating the insurance industry and monitors all insurance types including auto, health, home, long-term care, and worker's compensation insurance policies. To protect consumers, the CDI issues licenses to insurers and insurance companies. It regulates all insurance contracts and rates and provides consumer protection against fraud. Moreover, this agency had also initiated mediation programs like the Automobile Claims Mediation Program to settle insurance-related disputes. |