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• CA Auto Insurance
• California Insurance Laws

Requirements & Laws for Liability Insurance in California

California Changed Its Insurance Laws. What Do You Need To Know?

The insurance laws changed significantly in California in 2006 in order to make sure that cars on the road have liability insurance. The changes also aim to decrease the amount of uninsured vehicles in CA.

The California Department of Motor Vehicles (CDMV), lists the following information regarding the changes in the law and mandatory auto insurance requirements.

• Purpose of the law
• Mandatory requirements
• Providing evidence of financial responsibility
• Minimum liability insurance requirements for private passenger vehicles

Purpose of the law

In 2006, the law changed the way the Department of Motor Vehicles verifies insurance for privately owned vehicles.

Changes were made to ensure that vehicles driven on California roads have liability insurance that provides financial responsibility for any damage or injury caused by a traffic collision regardless of fault, and to remove uninsured vehicles from the highways.

Insurance companies in California are required by law (California Vehicle Code [CVC] §16058) to electronically report private-use vehicle insurance information to DMV. Insurance companies are exempt from electronically reporting insurance information for vehicles covered by commercial or business insurance policies.

Electronic reporting of insurance information and programming changes that took effect in 2006, allows the department to monitor insurance coverage and take appropriate actions through vehicle suspension as required by law.

Law enforcement and court personnel have electronic access to insurance status on DMV records.

Mandatory requirements:

Financial responsibility is required on any vehicle operated or parked on California roadways.

You must carry evidence of financial responsibility in your vehicle at all times and must be provided as specified below:

• When requested by law enforcement.
• When renewing vehicle registration.
• When the vehicle is involved in a traffic collision.

Providing evidence of financial responsibility:

In some cases, you may also be requested to submit additional insurance information to DMV by providing:

• A document or identification card from your insurance company.
• A DMV authorization letter, if you are a cash depositor or are self-insured.
• California Proof of Insurance Certificate (SR-22) for broad coverage or owner’s policy.
• Evidence that the vehicle is owned or leased by a public entity defined in Government Code §811.2.
• A Notification of Alternative Forms of Financial Responsibility (REG 5085) (PDF) form for vehicle covered by a commercial or business policies and being registered for the first time.
• A statement of facts (REG 256) (PDF) certifying the motor carrier has evidence of insurance on file with the Public Utilities Commission or DMV pursuant to CVC §34630.

Minimum liability insurance requirements for private passenger vehicles (California Insurance Code §11580.1b)

• $15,000 for injury/death to one person.
• $30,000 for injury/death to more than one person.
• $5,000 for damage to property.

Liability insurance compensates a person other than the policy holder for personal injury or property damage. Comprehensive or collision insurance does not meet vehicle financial responsibility requirements.

If you cannot afford liability insurance you may be eligible for the California Low Cost Automobile Insurance Program. Additional information is available at www.aipso.com/lc/ or call 1-800-602-8861.

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