Is Car Insurance Mandatory for Drivers in Los Angeles?

The question of auto insurance for Los Angeles residence isn’t easily answered, though it may be safer to assume that all California residents do need some type of car insurance. In California, the requirement is for “financial responsibility,” which does include typical automobile insurance, but also covers a broader base of options. Looking at those options reveals that, for most people in Los Angeles, regular insurance may be the best and cheapest option.

Do You Have Financial Responsibility For Your Vehicle?

The California Department of Motor Vehicles states that financial responsibility, or auto insurance, is required for every motor vehicle in the state, whether the vehicle is driven frequently or remains parked on a public street. Proof of coverage must be carried within the vehicle at all times so it can be produced under special circumstances. Most commonly, proof of financial responsibility will be required, when requested by a police officer, renewing the vehicle’s registration, or when the vehicle is involved in a traffic accident.

In most cases, the Department of Motor Vehicles is immediately notified by insurance companies via electronic submissions, whenever a vehicle insurance policy lapses. This regulation applies only to private citizens. Lapses in insurance on commercial vehicles don’t fall under this same requirement. Additionally, the electronic records of insurance is available to officers and court personnel through a unified computer system.

The California minimum for privately owned passenger vehicles is $15,000/$30,000/$5,000. Broken down, that’s $15,000 for injuries or death to one person, $30,000 for injuries or death for more than one person, and $5,000 for property damage. This requirement applies to liability insurance only. In California, comprehensive or collision insurance is not required.

There are four types of financial responsibility deemed acceptable by the California Department of Motor Vehicles and the previously discussed motor vehicle liability insurance coverage is just one option. Alternatively, a cash deposit submitted to the DMV of $35,000 is also an acceptable form of financial responsibility, as is a surety bond for $35,000 issued by a company licensed in the state of California. A self-insurance certificate, issued by the DMV, is also an option for meeting the financial responsibility requirements.

For individuals experiencing economic hardships, the DMV does participate in a low-cost insurance program. Under the California Low Cost Automobile Insurance Program, residents can acquire discounted liability insurance policies.

What Can I Do, If I’m Not Using My Vehicle?

It’s important to notify the Department of Motor Vehicles, before canceling the insurance on any motor vehicle. Failing to follow through with this can result in a registration suspension and a hefty fine. If you want to cancel the insurance on a vehicle you won’t be using and will not be parking it on a public California roadway, you will want to file an Affidavit of Non-Use to ensure you avoid any unnecessary fines and fees. The Affidavit of Non-Use can be nullified within the same year by insuring the vehicle and notifying the DMV of the change in the vehicle’s status.

There are a number of conditions under which the DMV will suspend your vehicle’s registration. First, if the DMV receives notification that a policy has been canceled, there’s a 45 day window for the vehicle owner to provide proof of a replacement policy. For new cars, insurance information must be submitted within 30 days of the issuance of the registration card. This applies in both an initial registration and a transfer of ownership. Vehicle registration will also be suspended if the DMV discovers the registration was obtained by providing false insurance information.

In the event that your registration has been suspended for a lapse in insurance, you must first obtain a new insurance policy. Once you have proof of coverage, you can submit that proof, along with your suspension fine, to the Department of Motor Vehicles. Payment can be submitted online, via snail mail, or over the telephone, but cannot be submitted in person at the DMV field offices. After you have followed through with re-insuring your vehicle and paying the fine, your vehicle registration will be reinstated.

If police stop you for driving under a suspended registration, consequences include receiving a court summons and having your vehicle impounded. Additionally, an insurance lapse means that you will be personally liable for any damages resulting from a traffic collision.