Cal-Driver-Ed.Com

FINANCIAL RESPONSIBILITY

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.
• A surety bond for $35,000 obtained from a company licensed to do business in California.
• A DMV issued self-insurance certificate.

You must carry written evidence of financial responsibility whenever you drive and show it to a peace officer after a citation stop or accident. You may have to pay a fine or have your vehicle impounded if you don't.

If you don't have acceptable financial responsibility and have an accident, you may lose your driver license for up to four years.

INSURANCE

How Much Insurance Must You Carry?

State law says you must be financially responsible for your actions whenever you drive and for all motor vehicles you own. It is illegal to drive without being financially responsible. Most drivers choose to have a liability insurance policy as proof of financial responsibility. If you have an accident not covered by your insurance, your driver license will be suspended. If the driver is not identified, the owner of the motor vehicle involved will have his or her driver license suspended.

The minimum amount your insurance* must cover per accident is:

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

Before you purchase insurance, make sure the agent/broker and insurer you select are licensed by the California Department of Insurance. Call 1-800-927-HELP to determine the license status and obtain additional information.

If you are visiting California, or have just moved here, you should be aware that many out-of-state insurance companies are not authorized to do business in California. Before you drive here you should ask your insurance company if you are covered in case of an accident. Should you become involved in an accident in California, all three of the following conditions must be met to avoid suspension of your driving privilege:

1. Your liability policy must provide bodily injury and property damage coverage which equals or exceeds the limits stated above;
2. Your insurance company must file a power of attorney, allowing the DMV to act as its agent for legal service in California; and
3. You must have insured the vehicle before you came to California. You cannot renew the out-of-state policy once the vehicle is registered in California.

Many lawsuits are settled for much more money than the minimum amounts set by the Financial Responsibility Law. You may have to pay the extra money if your insurance doesn't pay it all.

Reporting The Accident To DMV

When you have an accident, you must report it to the DMV if:

• More than $750 in damage was done to the property of any person ($500 for accidents prior to January 1, 2003).
• Anyone was injured (no matter how slightly) or killed.

Each driver must make a report to the DMV. This can also be done by the driver's insurance agent or broker or legal representative. The CHP or police will not make this report for you.

You must make this report, whether you caused the accident or not and even if the accident occurred on private property. Report the accident within 10 days. Make the report on the California Traffic Accident Report form SR 1. You can get this form from any DMV or CHP office. If you don't make this report to DMV, your driving privilege will be suspended. If you did not have the proper insurance coverage, your driving privilege will be suspended for four years. During the last three years of the suspension, your license can be returned if you provide a California Insurance Proof Certificate (SR 22) and maintain it during this period.

Accidents On Your Record

Every accident reported to DMV by law enforcement shows on your driving record unless the reporting officer says another person was at fault. Every accident reported by you, or another party in the accident, shows on your record if any one person has over $750 in damage or if anyone is injured or dies ($500 for accidents prior to January 1, 2003). It does not matter who caused the accident. The law says DMV must keep this record.

Accidents, Insurance, and Minors

If you are under 18 years of age, your parents sign your license application and take responsibility if you drive any vehicle, minibike, or moped without a license. Your parents accept liability up to $35,000 for any one accident. This assumption of liability may be voided if they ask DMV to cancel your license. The parents' liability automatically ceases when you reach age 18.

If you are involved in an accident you may be liable for civil damages. If the accident involved a law violation, then you may also be fined.

* Low cost automobile policies are established for Los Angeles and San Francisco counties. Please contact your insurance agent

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