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California car insurance requirements

What does the law require to show financial responsibility?

As in all but one US state, California has a mandate for a minimum amount of cover should you be the at-fault driver in a traffic accident. The current requirement is $15,000 if one person is injured or killed, $30,000 for medical expenses when more than one person is injured, and $5,000 for property damage. You fulfill the obligation either by buying a liability insurance policy or by depositing $35,000 in cash with the California Department of Motor Vehicles.

Are you required to carry any other form of insurance?

The law does not require you to hold anything more than the basic minimum of cover or to have made a cash deposit with the DMV. But if you have an auto loan or another lender has imposed conditions, you may be required to hold both a collision and a comprehensive policy. The difference is that breach of the state's mandate exposes you to serious penalties, but breaking the terms in a loan agreement is slightly less serious in the short term. It may, however, cost you more money or cause the loss of assets if the lender sues you.

In what circumstances must you prove California car insurance?

The DMV and testing stations require proof of insurance before you can renew the vehicle registration or go through the smog test. If a police officer asks, you must also produce evidence of a valid insurance policy. A failure to produce evidence on demand can result in a fine or your license being suspended. As the California car insurance laws are written, driving is a privilege and, if you want to enjoy it, you should follow the rules.

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