by China Juriko
California put into effect the Financial Responsibility Law beginning 2006. This was to ensure that all cars on the roads had insurance coverage and full compensation was offered regardless of who was on the wrong causing the accident. This was essential in that vehicles that do not have auto insurance are removed from the road.
Registration of vehicles is done by providing evidence of financial responsibility and should be surrendered to the Department of Motor Vehicles (DMV). Auto insurance companies are obligated to submit a report containing the policy information electronically and this is should done whenever a driver purchases a policy. Furthermore if a policy has been cancelled, that information should also be passed to the DMV and in the case where coverage has not yet been reinstated within 45 days, this will result to suspension of the vehicle’s registration.
The state of California states that the minimum requirements are liability coverage for physical harm and property damage. In the case of an accident the policyholder and other individuals involved are all compensated once it has been established that the insured individual was at fault. The minimum Liability requirement includes $5,000 for property damage, $15,000 for physical harm or even death and lastly $30,000 for physical harm or deaths of more than two persons.
Proof of coverage is provided in situations when, one is requested by the law enforcement, after a traffic accident that you were involved in, once you renew your registration and lastly within the time given to cancel your policy of an already registered car usually 45 days. Accidents can happen unexpectedly and it is for this reason that every motorist should always carry with him evidence of financial responsibility, further more these documents are important to have in the vehicle if a police officer ask for them. Failure to produce this evidence your will find yourself in a difficult situations where you will get your vehicle towed and impounded and furthermore you will have to pay fines just to get your vehicle back.
In the state of California driving without insurance coverage is illegal and will likely cost you a lump sum of money. For instance, if a driver causes an accident and he has not auto insurance coverage automatically he will be forced to pay not just for his injuries and vehicle damage but also for injuries and property damage of all the other individuals involved in the accident.
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