California Car Insurance Rules

Basic Requirements

Under California law, it's mandatory that all operational, privately owned motorized vehicles be insured by the owner. It's also law that insurance companies electronically report to the California Department of Motor Vehicles a new insurance policy within 30 days of the policy's effective date, or within 45 days of the cancellation date of an existing policy.

Written Proof

Papers establishing proof of insurance have to be kept in the vehicle at all times and must be presented to any law enforcement officials when requested. And if the vehicle is involved in a traffic collision, proof of insurance has to be presented to any other motorists involved. Insurance papers also have to be provided to the DMV when renewing a vehicle's registration.

Minimum Insurance

According to the state insurance code, private vehicles have to have a minimum of liability insurance coverage; full coverage isn't mandatory in California. Bare minimum liability coverage under the law has to pay out $5,000 for property damage; $15,000 for the injury to or death of one person; or $30,000 for the death or injury of multiple people.

Exemptions

Motorists can be declared exempt from having auto insurance if they meet any of these requirements: they are self-insured and have a DMV-issued certificate stating so; they have given the DMV a $35,000 cash deposit; or they have a $35,000 bond that's been issued from a California-licensed business.

State-Sponsored Insurance

California has a state-sponsored auto insurance program for residents who can't afford standard auto insurance. Good drivers who can demonstrate financial need can qualify for the California Low Cost Automobile Insurance Program. Among the rules for qualification are a good driving record and a certain income level. Also, value of the vehicle to be insured can't exceed $20,000.