In the majority of states, drivers have two options when it comes to auto insurance. Much of the United States requires motorists to obtain a minimum level of car insurance on each vehicle they drive. The coverage rules differ per state but it is illegal to drive a car without purchasing insurance.
Other states do not force people to purchase any kind of insurance, leaving it up to the motorists to determine whether or not purchasing a policy is the right choice for them. There are a small handful of states that take a different approach. They simply insist that motorists be financial responsible when driving. California is one of these states.
California State Mandated Financial Responsibility
What does state mandated financial responsibility entail? This means that each driver can choose to purchase California car insurance or make certain they have enough money available to cover any damages they may cause in a collision. In California, drivers who select not to sign up for car insurance will need to either purchase a surety bond or make a cash deposit with the state of at least $35,000. This may seem like a large amount but would be enough to cover damages and would keep drivers from having to pay a monthly or annual fee for car insurance. Most drivers simply opt to purchase car insurance instead.
Financially Irresponsible drivers
California does not treat financially irresponsible drivers lightly. Any driver found operating a vehicle that does not have insurance, or the required monetary deposit, will be impounded. The driver will then have to pay for the fees involved with getting their car back, as well as a hefty fine for not obeying the car insurance laws in the state.
Using Technology With Auto Insurance Laws
The state is also more advanced than other areas of the country when it comes to incorporating technology into their auto insurance laws. Many California agencies, including the state’s DMV, Highway Patrol and court system, are linked electronically. This means that the moment a person stops paying for car insurance the system is notified to suspend the driver’s vehicle registrations. This also assists law enforcement when making routine traffic stops as their system will alert them if a driver has a suspended registration due to lack of insurance. The driver will get more than a simple traffic ticket and will find their car immediately taken from them and impounded.
Alternatives for low income residents
The state does offer an alternative plan for low income residents called the California Low Cost Automobile Insurance Program. This program was designed to help drivers who struggle with the high costs of car insurance but still need to be able to drive. Motorists must prove that they have a financial need for the program and must also have a clean driving record to be approved.
Resources:
http://dmv.ca.gov/pubs/brochures/fast_facts/ffvr18.htm
http://dmv.ca.gov/vr/insurance.htm
