What is the California Financial Responsibility Law in a Car Accident?

California has a financial responsibility law for all drivers. Vehicle Code § 16028(a) states that a driver has to have proof of insurance while driving.

Vehicle Code section 16028(a) says:

Upon the demand of a peace officer ... every person who drives a motor vehicle upon a highway shall provide evidence of financial responsibility for the vehicle that is in effect at the time the demand is made.

You can have this on your phone. The law says “The evidence of financial responsibility may be provided using a mobile electronic device.”

There are minimum insurance requirements in California which are set forth in California Vehicle Code § 1605. 

 For a passenger vehicle you must have

1. $15,000 to cover harm to a single person.
2. $ 30,000 to cover more than one person.

This is called a 15/30 policy. Each person is protected up to $ 15,000 with a total of $ 30,000 maximum. California Vehicle Code § 16056 doubles this numbers starting in 2025.  The minimum insurance coverage will require at least a 30/60 policy.

Other Ways to Meet the Financial Responsibility Standard

Are there other ways to show financial responsibility besides buying insurance?  Yes there are.

1. You can deposit $ 35,000 with the Department of Motor Vehicles (DMV).  By analogy, for Donald Trump to appeal the New York court decision against him he is required to post the full amount of the judgment against him.  Otherwise the State of New York will seize and start selling his buildings.  This $ 35,000 bond is security as well.  However, it is not tied to any specific accident or amount due.  It is security for a potential accident so it differs in that way from an appeal bond (as in the Trump case)

2. Obtain a surety bond for $35,000 from an insurance company licensed to do business in California.  (See above for the concept of a "bond" as opposed to an auto insurance policy.  Practically a bond is a type of insurance policy.  You pay so much money to the bond company and they guarantee payment of up to $ 35,000 if that is owed by you.  

If you have an accident involving someone who has posted cash or a bond that would be highly unusual.  But it can happen and it is often an indication that the person has such a bad driving record he cannot get normal insurance.

Daniel Horowitz is a personal injury attorney with his main office in Lafayette, California near the Walnut Creek, Concord, Oakland areas. If you are involved in a car accident Daniel’s office can find out how much insurance coverage is available to properly compensate you for your injuries.