Even if your policy limits meet California's minimum car insurance requirements, they may not be enough for your rental company. For example, personal injury protection (PIP) or MedPay coverage can be used to pay medical bills for a car accident, and collision coverage can pay for repairs (or replacement) of your damaged vehicle after a car accident. The penalty for not having insurance in California can range from fines to the seizure of your vehicle. Surrogacy: When an insurance company pays the money for a claim and then tries to have another insurance company return the money or reimburse the money.
To comply with California's financial responsibility laws, most vehicle owners choose to purchase liability insurance coverage, and state law sets the minimum amount that vehicle owners must carry. All California drivers must be able to prove that they have insurance when driving. Having car insurance provides you with protection while you're on the road, especially if you have an accident. California auto insurance laws require drivers to show proof of financial responsibility, which you must carry in your car at all times.
GAP (guaranteed asset protection) insurance is an optional type of coverage that ensures that the driver is reimbursed for the difference between the actual cash value of the car (ACV) and the amount still due on the vehicle loan if the car represents a total loss. If you're a low-income driver, you can get low-cost insurance under the California Assigned Auto Risk Plan (CAARP). And for more information on car insurance in California, see the California DMV vehicle registration insurance requirements. Conversely, if you have a good driving record, are an older driver, or live in a rural area, your car insurance rates may be lower.
However, if you're a young driver, have a poor driving record, or live in a densely populated area, you might pay more for your car insurance. California's minimum car insurance requirements and other auto insurance laws are designed to protect drivers and ensure that all motorists on the road are properly insured. Let's look at the other car insurance requirements in California and discuss the penalties drivers could face if they don't have the right insurance.