California state law requires all drivers to purchase auto liability insurance. This insurance pays for damages injuries you may cause while driving. Even people with excellent driving records are required to carry this type of car insurance, mainly because the law recognizes that anyone can make a mistake.
But what if you have difficulty obtaining insurance? The law actually does make provisions that allow you to opt out of liability auto insurance coverage, but they aren’t cheap or easy to negotiate.
You can perform one of the following three actions as an alternative to auto liability insurance in California:
- Make a cash deposit of $35,000 with the California Department of Motor Vehicles. This money will be used to cover damages or medical bills if you cause an accident.
- You can also purchase a $35,000-dollar surety bond from a company licensed to do business in California. The bond acts as your insurance in the event of an accident.
- If you own a fleet of 25 or more vehicles, you can apply for self insurance. This means that you become personally liable for any damages caused by your or the other drivers of your vehicles. Essentially this means that you will be paying for any damages that may occur. This offer can be tempting for business owners who don’t want to pay for commercial auto insurance, but keep in mind that one accident and the resulting lawsuit could cost you your business.
Obviously, all three of these options are out of reach for the average person. If you can afford to take advantage of one of them, think carefully about your decision. It might seem like a good way to save a little money, but you’re gambling with a potentially large sum. Anyone can make a mistake while driving. That mistake could cost you thousands of dollars, result in loss of personal property, or even cause wage garnishment if you’re subject to a large settlement.