A Low Cost Auto Insurance Alternative
As we know, auto insurance can be expensive. The California Low Cost Automobile Insurance Program was established in 1999 to help income-eligible drivers with good driving records purchase liability insurance that meets State requirements.
To qualify for a CLCA insurance policy, you must 1) have a valid California drivers license, 2) own a car valued at $25,000 or less, 3) meet income eligibility requirements, 4) be at least 16 years old and 5) have a good driving record.
What are the CLCA income requirements? As of August 2020, income not exceeding $31,900 for a household of one, $43,100 for two, $54,300 for three, $65,500 for four and so on, $11,200 for each additional resident. But one thing to note is that if you use a CLCA policy, then all vehicles in the household must be insured through the program.
CLCA policies only cover very minimal liability insurance, even less than the general California requirements stated above just $10,000 per person, $20,000 per accident and $3,000 for property damage. I asked if this meets the requirements of the law, and they said it does. Additionally, optional uninsured motorist bodily injury and medical payments coverage is offered, but comprehensive and collision insurance is not.
The current annual cost of CLCA insurance for basic coverage varies by county, ranging from $244 to $966. Discounts apply for licensed drivers with a good driving record for three years.
Carrying Written Evidence of Financial Responsibility
When Is My Vehicle Registration Subject To Suspension
Vehicle registration is suspended when:
- DMV is notified that an insurance policy has been cancelled and a replacement policy is not submitted within 45 days.
- Insurance information is not submitted to DMV within 30 days of issuance of a registration card upon initial registration or transfer of ownership.
- The registration is obtained by providing false evidence of insurance.
Do I Need Car Insurance
This depends. All states require that you show some form of financial responsibility. While there are typically several ways to do so, the easiest way is by getting car insurance.
Other alternatives require quite a bit of money upfront however, these alternatives are an option if you have the resources.
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What Are The Minimum Liability Insurance Requirements For Private Passenger Vehicles
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Liability insurance compensates a person other than the policy holder for personal injury or property damage.
Comprehensive or collision insurance does not meet vehicle financial responsibility requirements.
Low Income Auto Insurance

Luckily, certain states are beginning to offer low-income auto insurance to assist those drivers who make less than a specified amount determined by your state.
California, for example, has instituted a Low Cost Auto Insurance Program that provides car insurance to low-income drivers with a good driving record. New Jersey has a similar program. Other states are looking at following suit. Check with the insurance commissioner’s office in your state to see if something similar is available or is in the works.
If you drive, auto insurance is a fact of life. It’s the easiest and least expensive way to prove financial responsibility and get your car on the road.
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The Basics Of California Automobile Insurance Requirements
Carrying automobile insurance gives California drivers the necessary proof of financial responsibility required by California law. This requirement applies to all vehicles operated or parked on a California roadway. The failure to carry car insurance may result in a fine, license suspension, or vehicle impoundment. Comprehensive or collision insurance does not meet vehicle financial responsibility requirements in California.
Acceptable Proof Of Insurance
Motor vehicle owners and lessees are required by law to maintain continuous Georgia Liability Insurance coverage on vehicles with active registrations. Driving a vehicle while the registration is suspended, revoked or cancelled is a criminal offense. Additional penalties will apply, if convicted of driving a vehicle with a suspended or cancelled registration.
Acceptable Proof of Georgia Vehicle Liability Insurance Coverage
- Proof of insurance, filed by your insurance company, in the Department of Revenue’s database. Coverage can be verified using DRIVES e-Services Registration and Insurance Status.
- If your search shows insurance coverage then your coverage is on file with the state.
- If your search shows no coverage, contact your insurance company immediately to:
- Obtain insurance, or
- Report that coverage is not entered in the state database.
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Minimum Insurance Requirements In Ca
If you choose to have liability insurance, there are minimum requirements for the amount of insurance you have on the vehicle and yourself as the driver.
Comprehensive or collision insurance does not meet vehicle financial responsibility requirements. Liability insurance is necessary to compensate those other than the policyholder for property damage and/or personal injury that occurs from an accident.
The California State liability insurance minimums are:
Low-cost coverage is available from the California Low Cost Automobile Insurance Program if you find that you are unable to afford liability insurance in California.
Minimum Liability Insurance Requirements For Private Passenger Vehicles
Here are the minimum liability insurance requirements :
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Liability insurance compensates a person other than the policy holder for personal injury or property damage.
Comprehensive or collision insurance does not meet vehicle financial responsibility requirements.
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The Purpose Of Insurance Policies
Insurance policies were created to protect your finances and valuable assets in the case of theft, damage, or injury. When there is a major car accident, an insurance policy can prevent you from going bankrupt. Insurance policies protect you against financial disaster stemming from an unexpected accident.
Will I Be Asked To Provide Evidence Of Financial Responsibility
You may be requested to submit additional insurance information to DMV, such as:
- A document or identification card from your insurance company.
- A DMV authorization letter, if you are a cash depositor or are self-insured.
- California Proof of Insurance Certificate form for broad coverage or owners policy.
- Evidence that the vehicle is owned or leased by a public entity defined in California Government Code §811.2.
- A Notification of Alternative Forms of Financial Responsibility form for a vehicle covered by commercial or business policies and being registered for the first time.
- A Statement of Facts form certifying the motor carrier has evidence of insurance on file with the Public Utilities Commission or DMV pursuant to CVC §34630.
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*no Proof Means Suspension Of The Vehicles Registration
If the California Department of Motor Vehicles does not receive proof of insurance for a vehicle, it will suspend the vehicles registration. Once this happens a motorist may not operate or park the vehicle on a public roadway until submitting proof of insurance. Vehicle owners must notify the DMV before canceling auto insurance. If a vehicle owner is not operating a currently registered vehicle that is not parked on a California roadway, an Affidavit of Non-Use may be submitted to the DMV.
If you have suffered an injury in any type of accident, and another party is responsible for this harm, you have a right to compensatory damages for your losses. The personal injury attorneys at Moss Bollinger can help you assert your valuable right to compensation. Moss Bollinger is dedicated to protecting and asserting the rights of our clients. Call 866-942-7974 today for a free consultation or contact us online.
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Penalty For Driving Without Insurance In Ca

If the Department of Motor Vehicles finds that you do not have insurance on your car, truck or motorcycle, it may suspend your vehicle registration. Your vehicle registration may also be suspended if it is found that the registration was obtained by providing false evidence of insurance.
In addition to having your vehicle registration suspended, you may:
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It Can Eliminate The Need For An Insurance Policy
When you have the money to pay cash for damages, you can reduce the amount you spend on insurance policies. For example, you can:
- Eliminate home warranties by planning to pay for repairs on your own.
- Avoid costly collision coverage on older vehicles with limited value by paying for smaller repairs yourself.
- Reduce add-ons to your homeowner’s policy, such as jewelry coverage, if you can afford to replace the items yourself.
Must I Notify Dmv Before I Cancel My Insurance
Yes. To prevent a vehicle registration suspension, you must notify DMV before you cancel your insurance. If you are not operating your currently registered vehicle, and it is not parked on a California roadway, you may submit an Affidavit of Non-Use form to DMV online at dmv.ca.gov, by calling the automated voice system at 1-800-777-0133, or by mail to one of the addresses at the end of this brochure.
You may remove the ANU during the same registration year online at dmv.ca.gov, by calling 1-800-777-0133, or by mailing evidence of insurance to the DMV-VIP Unit at the address at the end of this brochure.After filing the ANU, the vehicles insurance may be cancelled. However, if the vehicle is still not in use when registration renewal fees are due, you must pay renewal fees or request the vehicle be placed on planned nonoperation status. You are not eligible to file an ANU once the registration expires. You can obtain additional PNO information at dmv.ca.gov.
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States That Allow Self Insurance
Many states will allow you to self insure your car, though you will often have to display a certificate of self insurance to operate your vehicle legally. To receive a self insurance certificate, you will need to live in a state that permits it and also be able to prove you have enough money to cover the damages and injuries that may occur if you are found at fault for an accident.
It’s important to note that some states will only allow self insurance if you have a fleet of vehicles. Below are some of the states where you may be able to obtain a self insurance certificate for a small number of vehicles.
Alaska allows drivers to be uninsured if they reside in low-traffic volume areas or on property not connected to a highway. Residents in these areas only have to carry insurance or self insure if they have had a violation within a five-year period.
According to 4autoinsurancequote.com, in New Hampshire, drivers do not need to have insurance at all but will have to prove they can cover the financial responsibility if they are in an accident.
What Are The Types Of Financial Responsibility
- Motor vehicle liability insurance policy.
- Cash deposit of $35,000 with DMV.
- DMV-issued self-insurance certificate.
- Surety bond for $35,000 from a company licensed to do business in California.
For information regarding cash deposits or self-insurance, contact the DMV Financial Responsibility Unit at 657-6520.
To locate a company that issues surety bonds, contact the Department of Insurance at insurance.ca.gov or by calling 1-800-927-4357.
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How To Self Insure Your Car
To self insure your vehicle, you will need to either leave a cash deposit with your state’s Department of Motor Vehicles or Department of Insurance or purchase a surety bond. Before choosing this option, Motor1 recommends you will also want to make sure that:
- You have enough money to cover any losses, even significant ones
- You have a self insurance reserve or emergency fund in place to cover the payouts.
*california Law Requires Proof Of Financial Responsibility
Under§ 16020 of the California Vehicle Code,“All drivers and all owners of a motor vehicle shall at all times be able to establish financial responsibility and shall at all times carry in the vehicle evidence of the form of financial responsibility in effect for the vehicle.” In addition to showing financial responsibility when a law enforcement officer requests it, drivers must show proof of insurance when they are in an accident, or they are renewing a vehicles registration.
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Ways To Save Money On Insurance
If self-funding insurance is not an option in your state and you still want to save money, you can consider the following when shopping for insurance:
- Opt for higher deductibles
- Check for usage-based discounts or insurance programs
- Look for additional discounts you may qualify for
- Bundle your auto insurance with other policies
You should always check rates and have your policy requoted every six months to a year to make sure that you are getting the best rate. Check for additional discounts or other bundling options that may help you save more of your premium payment.
If you think self insurance may be a good option for you, and it is offered in your state, make sure you are ready and able to take on the financial responsibility that may come with an accident. Otherwise, you may find that the money saved on your premiums was not the savings you anticipated.
Check this out if you need additional information, resources, or guidance on car insurance.
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The primary reason that a driver may choose this option is to lower their insurance costs. Instead of the driver paying the insurance company and the company paying for repairs, the driver will absorb all costs related to an accident, theft, or liability.
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Are Cash Reserves Enough
While there may be some benefits to large companies who decide to self-insure their auto fleets, the drawbacks far outweigh the benefits for most individual drivers and small businesses. To begin with, it’s not easy to prove financial responsibility without an auto insurance policy.
Getting a certificate of self-insurance in most states requires you to meet specific qualifications, and surety bonds or deposits require you to tie up far more money than you’d pay out to an insurance company.
Despite that, the judgment from a single accident could wipe out your entire fund, and leave you owing more.
Even if you prove that you were not at fault in the accident, you may still have to cover the expenses of defending yourself in court. If you have auto insurance, that’s an expense your insurance company will likely pick up.
Financial Responsibility At The Dmv
What is Financial Responsibility? In 1974, the California State Legislature came to the startling realization that California was leading the Nation in the number of traffic collisions. The numbers of people injured in was staggering and the monetary loss in property damage was in the hundreds of millions of dollars. More disturbing was the fact that large numbers of the people who suffered these injuries and property losses were not being compensated because so few drivers carried liability insurance.
In response to this problem, the California State Legislature passed a series of laws designed to compel drivers and owners of motor vehicles to maintain and prove proper liability coverage for their vehicle at the scene of a traffic collision.
Today, it is unlawful for any person to drive or own a motor vehicle that is operated on a public street or highway, if it is not covered by proper insurance .
In short, Californias compulsory auto insurance laws demand that all vehicles be insured otherwise the driver and/or owner of a motor vehicle may have their driver license suspended.
What forms of Financial Responsibility does the DMV recognize?
California Vehicle Code section 16021
This section of the Vehicle Code identifies four acceptable forms of Financial Responsibility:
What happens if I cant show proof of Financial Responsibility at the scene of an accident?
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When To Show Proof Of Auto Insurance In Ca
There are only a few specific times when you are required to show proof of insurance:
If you fail to provide proof of financial responsibility, especially after a car accident, you may have your drivers license suspended.
Self Insurance Car: Everything You Need To Know
Self insurance car is an option in some states that allows the vehicle owner to assume all of the responsibility for protecting their car. Self insuring also means that you will take responsibility for any of the financial risks resulting from the losses.
Self insurance car is an option in some states that allows the vehicle owner to assume all of the responsibility for protecting their car. Self insuring also means that you will take responsibility for any of the financial risks resulting from the losses.
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What Do I Do If My Vehicle Registration Is Suspended
If you have received a letter from DMV stating your vehicle registration will be suspended in the near future or has already been suspended, submit your insurance information and/or reinstatement fee:
- Online at dmv.ca.gov . The Vehicle Registration Suspensions and Insurance Program pages provide up-to-date vehicle registration insurance suspension status and options to submit a reinstatement fee payment electronically, submit insurance information, submit/remove an Affidavit of Non-Use , and frequently asked questions .