California Drivers Are Not Necessarily Required to Have Auto Insurance
/Yes, it is true, technically, the law does not state that drivers in California MUST carry auto insurance.
However, California Vehicle Code Section 1656.2 does have certain "compulsory financial responsibility" requirements most easily met by maintaining valid auto liability insurance that covers, at a minimum, $15,000 for injury/death to one person, $30,000 for injury/death to two or more persons and $5,000 for property damage.
Alternatively, the law allows financial responsibility to be met in one of three other ways: a cash deposit of $35,000 with the DMV, a DMV-issued self-insurance certificate or a surety bond for $35,000.
Now, if someone can actually afford to leave a $35,000 deposit with the DMV, they probably have a lot more assets that could be put at risk without adequate insurance in place. Probably not a good idea. I called the DMV Financial Responsibility Unit. Apparently some people leave the cash deposit who feel they spend too much on premiums over the years. Or perhaps if they import a car that is difficult to insure.
I also asked about the "self insurance" option and laughed when I heard you need a net worth of at least $2.2 million and a fleet of 25 or more cars. Not really geared toward most individuals.
Posting a surety bond for $35,000 is an alternative to insurance but the cost can be significant, generally ranging from 1 to 5% of the value of the bond.
A Low Cost Auto Insurance Alternative
As we know, auto insurance can be expensive. The California Low Cost Automobile (CLCA) Insurance Program was established in 1999 to help income-eligible drivers with good driving records purchase liability insurance that meets State requirements.
To qualify for a CLCA insurance policy, you must