What is financial responsibility in California?
If you are like most California drivers, you know that you are required to carry automobile insurance if you drive on public roads. However, the law is actually more broad than what many people may know or realize. As explained by the California Department of Motor Vehicles, the state recognizes what it called financial responsibility.
Financial responsibility essentially states that anyone who drives or even parks a vehicle on public property in California must be able to prove their ability to financially compensate others in the event that they are at fault for an accident. For most people, this financial responsibility requirement is met by carrying the appropriate level of liability insurance. However, there are other ways of fulfilling this requirement.
A driver may elect instead to purchase a surety bond or make a cash deposit with the DMV. A bond or deposit must be for $35,000. It is also possible to obtain a certificate of self-insurance from the Department of Motor Vehicles. If a person does not properly satisfy the financial responsibility requirement, a vehicle\’s registration may be suspended. This may even happen if proper documentation is not provided within a 30-day window of registering a new vehicle or transferring the registration of a used vehicle that was recently puchased.
This information is not intended to provide legal advice but is instead meant to provide California residents an overview of what the state requires regarding automobile insurance or other means of financially compensation others in the event that an accident occurs.