Do I Have to Have Auto Insurance?

Author: shanemolliwan

If you live in California, state law requires you to prove that you can be responsible financially for any accident that you might be involved in, whether you caused it or not. Most people prove this financial viability by purchasing a policy from a company that offers autoinsurance. In California, you must carry a set amount of liability coverage with your policy, but the amounts for other parts of the policy can vary.

Some people will tell you that autoinsurance is required in California, but this is not exactly true. You do have the option of putting down a $35,000 cash deposit with the Department of Motor Vehicles. However, if that money is used to cover the expenses of an accident, then a new deposit will be required before you may legally operate your vehicle on California roadways again.

So for all intents and purposes, even though technically one could drive without having autoinsurance, the best way to protect yourself from lawsuits, bankruptcy, and/or losing your license is to carry at least the minimum liability amount on an autoinsurance policy. Your insurancecompany will be able to explain to you why it might be better in your situation to carry more than the minimum and will be able to quote you rates depending upon the type of coverage that you choose.

Unless you have an extra $35,000 just sitting around that you have no better use for than to let it sit in the coffers of the Department of Motor Vehicles, autoinsurance is undoubtedly the wiser choice. If the DMV has been notified that your policy has been cancelled, and a replacement policy is not submitted within 45 days, your vehicle registration will be suspended. The same is true if your insurance information is not submitted to the DMV within 30 days of the initial registration or transfer of the vehicle. In addition to the vehicle registration suspension, you can be cited and have your vehicle impounded.

There are those who will try to tell you that you are not legally bound to have autoinsurance in the state of California. Although this is technically true, you can see why failing to purchase auto coverage from an insurancecompany is just a bad idea. Besides having your vehicle impounded, receiving a citation, and having your vehicle's registration suspended, you could be held financially liable for any accidents that you cause and, without insurance, that liability can send you into bankruptcy or worse. None of that is worth it when you can purchase adequate insurance on the cheap.
Article Source: http://www.articlesbase.com/personal-finance-articles/do-i-have-to-have-auto-insurance-5449867.html
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