What does the California Compulsory Financial Responsibility Law Require?
California’s Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. There are four forms of financial responsibility: A motor vehicle liability insurance policy. A deposit of $35,000 with DMV.
What financial responsibility means?
Financial responsibility means being prepared for the unexpected. Most experts agree that you need to be able to support yourself financially for at least six months without an income.
What does proof of financial responsibility mean?
When it comes to auto insurance, proof of financial responsibility refers to the ability of a driver to pay for damages in the event of an accident the driver is found liable for. Different states have different financial responsibility law requirements.
What is the purpose of financial responsibility laws?
The purpose of the Compulsory Financial Responsibility Law (California Vehicle Code [CVC] ยงยง16000-16078) is to ensure that drivers and owners of vehicles are financially responsible for any damage or injury caused by a traffic accident, regardless of fault, and to remove financially irresponsible drivers from the …
Why do we need proof of financial responsibility?
The financial responsibility law requires that people prove that they have assets in reserve to pay for damages that they are responsible for in a car accident claim. Most states will accept proof of insurance coverage or a surety bond as proof of meeting the state’s minimum requirements.
What type of insurance must you have to meet your financial responsibilities?
Minimum Liability Car Insurance Requirements in California In order to comply with California’s “financial responsibility” laws, most vehicle owners choose to purchase liability insurance coverage, and state law dictates the minimum amount that vehicle owners must carry.
What is not covered by auto insurance?
Wear and Tear and General Maintenance: Any general maintenance costs are not covered by car insurance. All cars break down over time. This is an expected cost of car ownership. Wear and tear and general maintenance is not covered by car insurance.