Know Your Rights and Responsibilities
What is Automobile Insurance?
Automobile insurance is simply a contract that helps pay
for certain types of financial losses or obligations resulting
from the use or ownership of an automobile. To obtain this
contract (insurance policy), you pay a specified amount of
money called a premium. In return for the premium paid,
the insurance company agrees to pay certain expenses and
legal liabilities depending on the terms of the insurance policy.
Having the right insurance coverage may prevent you from

What Could Happen if I Ignore This Law?
The most common way drivers choose to comply with the financial
responsibility requirement is by purchasing an automobile liability
insurance policy. If you have an accident not covered by insurance,
then your license may be suspended. It is your responsibility to
provide liability insurance for any vehicle you own regardless of who
is operating the vehicle. It is illegal for vehicles to be operated without
meeting the requirements of this law.
When Must You Show Proof of Insurance?
The Legislature passed a law requiring motorists to produce
proof of insurance before the DMV renews the vehicle
registration. The new legislation also requires motorists to
display proof of insurance when they are stopped by a police
officer for traffic violations. Drivers who can’t do so may be
subject to fines and other penalties.
Proof of financial responsibility must be shown when you:
• Are asked for it by a law enforcement officer;
• Have an accident;
• Register your car or renew its registration; or
• Get your car inspected
How Do I Prove I Have Insurance?
Your insurance company will send you a proof of insurance
card listing the covered automobiles and drivers and showing
the policy number and expiration date. Your policy or a
temporary binder also is acceptable evidence of insurance.

What Happens if I Don’t Carry Insurance?
In California, driving without insurance is a serious offense.
Failure to show proof of insurance when requested may
result in fines or a suspended license. Remember, driving is a
privilege … not a right. If you are stopped by a police officer
and asked for proof of insurance and you can’t produce it,
you may receive a citation. You can have the ticket nullified
by showing proof of insurance in court. You could, however,
be assessed an administrative fee for expenses.
Why Is It All Up to Me?
It is not the responsibility of the company or agent/broker
to determine either the type or amount of coverages you
need. You and the agent/broker should have an open
exchange about the coverages that are available so that
you can determine what best fits your needs. The time
to discover that you do not have the necessary coverage
is before you are involved in an accident, not after.
Now that you know what California Law requires, you
should determine whether you need coverage above the legal
minimum in order to protect your assets. “How much is
this going to cost me?” should not be the only question in
deciding how much insurance you need. There are a variety
of options regarding types of coverage and policy limits so
you should shop carefully.
Ask yourself: Do I need higher limits?
Since you may be personally responsible for damages above
the policy limits, you should consider purchasing liability
insurance with higher limits than the minimum required by
law. With the increased cost of hospital stays, medical care,
and car repair, it may be well worth considering the extra
premium to purchase higher limits of coverage.
State of California Department of Insurance
The State of California’s
Low Cost Auto Insurance Program
The California Low Cost Auto Insurance program is
designed to reduce the high number of uninsured drivers.
The program provides low-income good drivers with an
affordable auto insurance option which satisfies California’s
financial responsibility laws. The program is available to
qualified persons living in eligible counties.
Briefly, the qualifications are based primarily upon:
• Household income
• Good driving record
• Vehicle value at time of purchase
To find out more about the program and see if you are
eligible call:
California Low Cost Automobile Insurance Program
(866) 60-AUTO-1
(866) 602-8861


suffering a large financial loss in the event of an automobile
accident.
The responsibilities of owning and driving an automobile
include following the financial responsibility laws under the
Vehicle Code. The most common way to satisfy the financial
responsibility for operating an automobile in California is by
purchasing automobile liability insurance.
If you choose to meet your financial responsibility by
purchasing liability insurance, the DMV outlines minimum
limits that you must purchase under Section 16451 of the
Vehicle Code.
Financial Responsibility Laws
The statutory minimum limits of liability insurance in
California* are as follows:
Bodily Injury Liability
• $15,000 for death or injury of any one person,
any one accident.
• $30,000 for all persons in any one accident.Property Damage Liability
• $5,000 for any one accident.
There are four ways to accomplish financial responsibility:
1. Coverage by a motor vehicle or automobile liability
insurance policy;
2. A cash deposit of $35,000 with the DMV;
3. A certificate of self-insurance issued by DMV to owners
of fleets of more than 25 vehicles; or
4. A surety bond for $35,000 obtained from an insurance
company licensed to do business in California.
All California drivers and owners must have at least the
statutory limits of minimum liability insurance or an approved
alternative way to pay for injury or property damage they may
cause.* Penalties are very severe for non-compliance with this
section of the vehicle code.
When your car is in an accident for which you are found legally
liable, bodily injury (BI) liability covers your liability to others
for injuries to them. Property damage (PD) liability covers
your liability for damage to someone else’s property.
A policy with BI of $15,000/$30,000 and PD of $5,000
will pay out as follows:
• The maximum limit for one person’s injuries, medical expenses,
etc. is $15,000 under the bodily injury portion;
• If two or more people are injured, the maximum limit
for the accident will be $30,000;
• The maximum limit for damage to other people’s property
(their car, their fence, etc.) is $5,000.
Comprehensive coverage (other than collision), uninsured
motorist, medical payments and collision insurance are not
required by law.