Anyone that operates a motor vehicle in the state of California must comply with California car insurance requirements. The state of California has financial responsibility laws in place and there are 4 ways to comply with these financial responsibility requirements.

The most common way that the majority of motorists meet these requirements is by obtaining an auto insurance policy. The minimum amount of coverage you are allowed to have by law (if you're not using one of the alternatives mentioned below) is liability coverage often referred to as 15/30/5 coverage. What this means is that drivers must have bodily injury liability of at least $15,000 per injured person, at least $30,000 of bodily injury liability coverage per incident, and a minimum of $5000 in property damage liability coverage.

Alternatives to obtaining a standard auto insurance policy would include:

1. A cash deposit of $35,000 with the DMV;
2. A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or
3. A surety bond for $35,000 obtained from an insurance company licensed to do business in California.

Tort System

The state of California uses a tort system which means that whenever there is an accident someone must be found to be at fault.  The person that is found to be responsible for causing the accident is also responsible for damages such as medical expenses, vehicle repairs etc.  When you have an auto insurance plan it is your insurance provider that will cover such expenses up to the dollar amount stated in your policy.

Additional Coverage

California car insurance requirements require you to have at least a 15/30/5 plan but it may be a wise decision to go with a little more coverage than the state mandated minimums.  For example, it is easy to do far more than $5000 worth of damage to someone's car if you are at fault in an automobile accident.  If you have the minimum amount of insurance required by law in the state of California, your insurance provider will only pay up to the first $5000 and any additional expenses would be your responsibility.  Medical expenses can also be extremely high in the state of California so you may wish to carry more than the minimum allowable amount of liability coverage to protect yourself financially if you are found to be at fault accident.

If you do decide that it is a good idea to carry more coverage than the absolute minimum allowed by law it is still possible to find extra coverage at an affordable price.  Spend a little time shopping around and comparing the rates offered by various insurance providers and there's a good chance you will find a company offering the coverage you need at a price you can afford.