Insurance is required by law for privately owned vehicles and it is required to be electronically reported to the DMV by all Insurance companies in the state of California. The California Vehicle Financial Responsibility Law was modified in 2006 to insure all vehicles that were to be driven in the state had liability insurance to provide financial responsibility in case of an accident, no matter who commits the infraction or is responsible for the accident. Also this will enable you to do online registration renewal.

Minimum Liability requirements in the state of California are:

• $15,000 to cover one person's bodily injuries/death
• $30,000 to cover bodily injuries/death of all involved in the accident
• $5,000 to pay for property damage (this doesn't include your own vehicle or property).

Liability Insurance is required to all registered vehicles, moving and not moving, except for Vehicles registered to a government dependency, off-highway, special equipment vehicles and those registered under a PNO status. Liability insurance will not pay for policy holder's injuries or property damage; therefore other insurance coverage types are available.

Proof of insurance or financial responsibility must be carried with you at all times, this proof can be requested by police officers when pulling you over, if you are involved in an accident, when you want to renew your vehicle registration. Since all insurers are required to submit all auto insurance policies electronically, information regarding your insurance status is already in the DMV databases, however, other evidence may be requested to prove you own the right policy. This evidence can be an ID card emitted by the insurance company, letter of authorization in the case of self-insured or cash deposits, an SR-22 Certificate (California Proof of Insurance) among other proof or ownership available.

If you don't comply with this regulations or are unable to keep your financial responsibility, your vehicle's registration can be cancelled and your drivers license suspended.

Financial responsibility can be established by:

• Ownership of Liability Auto Insurance policy (the most common),
• A Certificate from the DMV proving you are self-insured,
• A $35,000 cash deposit at the DMV Treasurer, and
• Surety Bond issued by a licensed company for $35,000

It is highly recommended for all drivers to own more coverage than the minimum required. Auto insurance should be considered more as an investment or a way to protect your assets in the event of an accident.

In addition to the liability policy, you may also be interested in adding other coverage to protect your property, yourself and others. Collision coverage will help you pay for the damage caused to your vehicle, keep in mind that liability coverage will take care of all but the policy holder, leaving your own vehicle unprotected. Comprehensive Insurance can be useful in any event not related to a collision, such as weather accidents, wildlife or vandalism. Uninsured coverage may not be too useful in the state of California, since the state requires all drivers to own liability insurance, however on hit-and-run situations it can come in handy. Underinsured also provides coverage when the person responsible doesn't have enough liability insurance to pay for the damage inflicted on you and your passengers