What are the Options for Car Insurance in California?

If you live in California, you are required to carry adequate liability insurance coverage if you own or operate a vehicle. In order to enforce this law, you will be required to show proof of insurance when you register your car. The amount of coverage depends on the state, but car insurance in California is set at a minimum of $5,000 coverage for property damage, $15,000 in coverage for an injury to one person, and $30,000 in coverage if more than one person is injured. Here are some possible alternatives to purchasing car insurance in California:

Becoming "Self-Insured"

This option isn't available in every state, but currently the California DMV allows you to become self-insured. This means that the owner of a vehicle controls the insurer, which will issue the policy. This can be an expensive process, so most people who go this route are business owners who have multiple vehicles to insure. If you own a fleet of vehicles, you can often save money through this method – especially if your company is already familiar with insurance policies, like a bank or credit union. If you choose to use this method, the DMV will give you a self-insurance certificate to use as your proof of insurance.

Surety Bond

A second way of providing car insurance in California is a surety bond. This type of bond states that a surety agrees to pay a previously specified amount of money in the case of an insurable incident. This type of agreement does not necessarily include all the other features a regular car insurance policy would have. The minimum amount of coverage for this option is $35,000.

Cash Deposit

Finally, in the state of California you have the option of sending money directly to the DMV to meet the state's liability requirement. If you put down a deposit of $35,000 you do not need to provide any proof of insurance. If you decide to purchase an insurance policy later on, you can get your deposit back, as it does not act as a payment. The state reserves the right to increase the amount required for a cash deposit at any time.

Types of Auto Insurance

If you choose to go the typical route and purchase a policy, there are several types of coverage available: liability coverage, collision, comprehensive and uninsured motorist. The minimum amount of $35,000 applies only to liability coverage, as it's the only type required by law.

How to Buy Car Insurance in California Online »

If you live in the state of California and plan on operating a vehicle, it is required that you carry automobile insurance. There are a lot of car insurance companies around, both online and local. This may make it seem overwhelming to shop around. However, this is the best way to save money and is worth the effort. There are many car insurance companies online, and there are many websites that will find you multiple quotes with a single click of a button!

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