Insurance Requirements for California

• Damage from a collision.Accidente image by quicolopez from Fotolia.com
  
  Under California law, licensed drivers and vehicle owners must possess liability insurance to compensate others for property damage, injury or death resulting from a collision or other vehicular accident. While coverage is mandatory in most U.S. states, policies differ in terms of minimum liability requirements, whether drivers must carry proof of insurance, and how long drivers who have canceled their insurance may continue to operate a vehicle while uninsured. Failure to comply with California's insurance requirements may lead to suspension of vehicle registration, fines or even the vehicle being impounded.
  
  

Minimum Liability Requirements

• Licensed California drivers and vehicle owners must hold a policy that covers at least $15,000 worth of coverage for injury or death of one person per accident, $30,000 for two or more people per accident, and $5,000 in property damage. Even unlicensed drivers or drivers registered in another state are expected to cover these minimums in the event of an accident.
  
  

Proof of Insurance

• While some states only require policy holders to provide their insurance information to the other party involved in an accident, California drivers must carry proof of insurance in their vehicle at all times. All insurance companies operating in California provide their customers with an identification card. The card should identify the insurance provider, the duration of coverage, and the driver's individual policy number. Proof of insurance must be presented to any law enforcement official who requests it, and is a required document for renewing a vehicle's registration.
  
  

Notification of Coverage or Cancellation

• In 2006, the state enacted California Vehicle Code §16058, requiring all insurance providers covering licensed California drivers or vehicle owners to report the identities of their customers to the Department of Motor Vehicles. The purpose of the law was to dramatically reduce the number of uninsured drivers on the road. Insurance providers must also notify the state if a customer cancels his or her policy. If a replacement policy in the vehicle owner's name has not been submitted to the DMV within 45 days after cancellation, the vehicle's registration will be suspended. Vehicle owners who apply for a new registration or have a vehicle's registration transferred to them must purchase coverage within 30 days.