Those who drive motor vehicles in California are required by California Vehicle Code Section 16028 to carry proof of financial responsibility for the vehicle while driving, and are required to present this proof upon the demand of a peace officer or a traffic collision investigator.
For most people, proof of financial responsibility will be in the form of proof of auto insurance. However, proof of auto insurance is not the only acceptable form of proof of financial responsibility. Other acceptable forms of proof of financial responsibility include:
- Proof of a $35,000 cash deposit with the DMV
- A self-insurance certificate issued by the DMV
- A $35,000 surety bond from a company which is licensed for business in California
There are consequences for driving without financial responsibility for your vehicle in California, and some of these consequences are stated in California Vehicle Code Section 16029.
Penalties For Driving Without Proof Of Financial Responsibility In California
Those who are convicted for the first time of driving without proof of financial responsibility in California are subject to a fine of at least $100 and no more than $200, in addition to penalty assessment fees, which can increase your total cost by over three times. The court may also impound your vehicle.
Those who are convicted for a second time within three years of driving without proof of financial responsibility in California are subject to a fine of at least $200 and no more than $500, in addition to penalty assessment fees. Again, the court may also impound your vehicle.
If your vehicle is impounded, you must present proof of financial responsibility for your vehicle and pay any storage and towing fees related to your vehicle’s seizure in order to recover your vehicle.
California Penalty Assessment Fees
As mentioned above, if you are caught driving without insurance in California, you will not only be fined, but you will also be subject to penalty assessment fees. You may be subject to the following penalty assessment fees, depending on your location and what local officials choose to apply:
- California Penal Code 1464: A $10 fee for every $10 of your fine, or every part of $10. Thus, a $35 fine would be subject to a $40 penalty assessment fee.
- California Government Code 70372: $5 for every $10 of your fine, or every part of $10.
- California Government Code 76000: $7 for every $10 of your fine, or every part of $10.
- California Government Code 76000.5: $2 for every $10 of your fine, or part of $10.
- California Government Code 76104.6: $1 for every $10 of your fine, or every part of $10.
- California Government Code 76104.7: $4 for every $10 of your fine, or every part of $10.
Those subject to every single one of these penalty assessment fees will see $29 in fees added for every $10 or part of $10 of their fine. Thus, if you are subject to a $200 fine, you will end up owing $780, and if you are subject to the maximum fine of $500 for a second conviction for driving without proof of financial responsibility in three years, you will end up owing $1,950.
Penalties For Getting In An Accident Without Proof Of Insurance In California
There are additional penalties if you get in a motor vehicle accident while driving without proof of financial responsibility in California.
The first time you get in an accident without proof of financial responsibility in California, in addition to the fines and penalty assessment fees described above, you will also be subject to a mandatory suspension of your driver’s license consisting of one year. Once this year expires, you may receive a license reinstatement by maintaining an SR-22 form for a period of three years. An SR-22 form is a certificate that your insurance company provides to the DMV proving that you are insured.
For second and subsequent convictions of getting in an accident without proof of financial responsibility in California, you will be subject to a license suspension of up to four years. You may receive a license reinstatement during the last three years of your suspension if you maintain an SR-22 form.
Other Consequences For Driving Without Insurance In California
Fines, vehicle impoundment, penalty assessment fees and license suspensions are not the only consequences for driving without proof of financial responsibility in California:
Your Ability To Recover Damages Is Reduced If You Don’t Have Insurance
Most drivers are eligible to recover economic and non-economic damages from any party whose negligence causes an auto accident in California, thanks to California Civil Code 1714. Negligence is the failure to be reasonably careful to prevent harm. Economic damages are objectively calculable damages such as medical bills and property damage, and non-economic damages are subjective damages such as pain and suffering.
However, California Proposition 213 led to Section 3333.4 being added to the California Civil Code.
California Civil Code 3333.4 states that those who are driving without proof of financial responsibility and are subsequently involved in an accident may not recover non-economic damages such as compensation for pain, suffering, disfigurement, physical impairment or inconvenience. Proposition 213 declared that the reason for this was to prevent criminals from being rewarded for their law breaking.
There is, however, one exception to this: uninsured drivers who are injured by drivers operating a vehicle under the influence of drugs or alcohol are still allowed to recover non-economic damages.
You May Be Liable For Others’ Damages If You Don’t Have Insurance
Normally, when a driver’s negligence causes an auto accident, those injured in the accident will be able to recover damages from that driver’s insurance company, either through a claim filed with the insurance company or by filing a lawsuit.
However, if you cause an accident while you are uninsured, you may find yourself being directly sued for damages, such as medical bills and property damage, incurred by those you have injured. You may end up owing hundreds of thousands of dollars if this occurs.
Your Vehicle Registration May Be Suspended If You Don’t Have Insurance
California’s DMV may suspend your vehicle registration if:
- They are notified you canceled your insurance and you don’t replace your insurance within 45 days
- You fail to provide the DMV with your insurance information within 30 days of transfer of ownership or initial registration
- You register your vehicle with false proof of insurance
California Auto Insurance Requirements
If you, like most drivers, choose to go with proof of auto insurance as your proof of financial responsibility for your vehicle, you must carry insurance with liability coverage minimums established by California Vehicle Code 16056. Those minimums are:
- $15,000 to cover death or bodily injury to one person in an accident
- $30,000 to cover death or bodily injury to two or more people in an accident
- $5,000 to cover any property damage that is the result of an accident
Liability coverage is coverage providing compensation to people other than the policy holder for property damage or personal injury. Collision or comprehensive insurance coverage do not meet the requirements for vehicle financial responsibility.
California’s Low Cost Auto Insurance Requirements
Those whose household income falls below certain thresholds are eligible for California’s Low Cost Auto Insurance program. Those thresholds are:
- $33,975 per year for a 1 person household
- $45,775 per year for a 2 person household
- $57,575 per year for a 3 person household
- $69,375 per year for a 4 person household
- $81,175 per year for a 5 person household
The liability insurance requirements for those enrolled in the Low Cost Auto Insurance program are a bit lower than for other Californians. They are:
- $10,000 to cover death or bodily injury to one person in an accident
- $20,000 to cover death or bodily injury to two or more people in an accident
- $3,000 to cover any property damage that is the result of an accident
These lower insurance requirements allow insurance companies to offer more affordable insurance programs under the Low Cost Auto Insurance program.
Proof Of $35,000 Cash Deposit With The DMV
Proof of a $35,000 cash deposit with the DMV is a form of proof of financial responsibility for a vehicle in California which some people may choose to carry instead of proof of insurance if they feel they are spending too much money on insurance premiums over the long term. This proof will consist of a DMV acknowledgment letter that shows the deposit number.
Self-Insurance Certificates Issued By The DMV
A self-insurance certificate issued by the DMV is another form of proof of financial responsibility for a vehicle in California which some people may choose to carry instead of proof of insurance.
However, you need to own over 25 vehicles to obtain a self-insurance certificate from the DMV. You must also be able to cover any property damage, vehicle repairs or medical bills in an accident, and the DMV may ask you for evidence that you can cover these things before issuing you a self-insurance certificate.
$35,000 Surety Bonds
Another form of proof of financial responsibility for a vehicle in California which is an alternative to proof of insurance is a $35,000 surety bond issued by a company that is licensed in California to do business.
This bond guarantees that you will cover any property damage, vehicle repairs or medical bills when you cause an auto accident. The surety company will cover these expenses for you if you can’t, but the surety company will then later require you to pay them back.