When Must I Show Proof of Insurance?
The Legislature passed a law requiring motorists to produce proof of insurance before the Department of Motor Vehicles renews vehicle registration.  The new legislation also requires motorists to display proof of insurance when they are stopped by a police officer for traffic violations.  Drivers who can’t do so may be subject to fines and other penalties.

What Happens If I Don’t Carry Insurance?  In California, driving without insurance is a serious offense.  Failure to show proof of insurance when requested may result in fines or a suspended license. Remember, driving is a privilege … not a right.  If you are stopped by a police officer and asked for proof of insurance and you can’t produce it, you may receive a citation.  You can have the ticket nullified by showing proof of insurance in court. You could, however, be assessed an administrative fee for expenses.

What Are the Penalties for Driving Without Liability Insurance?  Judges can impound the vehicles of frequent, flagrant violators.  If you provide false evidence of insurance coverage and your driver’s license is suspended, the suspension cannot be lifted until you demonstrate genuine proof of insurance.

How Do I Prove I Have Insurance?  Your insurance company will send you a proof of insurance card listing the covered automobiles and drivers and showing the policy number and expiration date.  Your policy or a temporary binder also is acceptable evidence of insurance.

When Must I Show Proof of Financial Responsibility?  Proof of financial responsibility must be shown when you:

• Are asked for it by a law enforcement officer;
• Have an accident,
• Register your car or renew its registration,or
• Get your car inspected.

Now that you know what the California Law requires, you should determine whether you need coverage above the legal minimum in order to protect your assets.  "How much is this going to cost me?" should not be the only question in deciding how much insurance you need.  There are a variety of options regarding types of coverage and policy limits so you should shop carefully.

Do I need higher limits?  Since you may be personally responsible for damages above the policy limits, you should consider purchasing liability insurance with higher limits than the minimum required by law.  With the increased cost of hospital stays, medical care, and car repair, it may be well worth considering the extra premium to purchase higher limits of coverage.

Why Should I Shop Around for Automobile Insurance?
Under California’s premium rating law, each insurance company is allowed to calculate its own rates based on its past loss experience and expenses.  Since each company’s experience will differ, even within the same geographic area, the rates will therefore differ. By calling several companies, or brokers/agents for a rate comparison, you can potentially save money.  You will then be able to choose the company with the best available price and coverage to suit your individual needs.  There are many sources you can contact to evaluate policies and premiums.  Your local telephone directory and the Internet can provide names and telephone numbers for the following organizations:

• Independent insurance brokers/agents;
• Company agents who represent one company;
• Direct writers: insurance companies that sell direct to the public;
• Web sites.

It is important to get quotes from different companies.  You may not realize it, but the insurance rates you pay for your car can vary dramatically depending on the insurance company you choose.  You should always compare before deciding on a policy.

What If I Can ’t Find a Company That Will Insure Me?

Some insurance companies specialize in the non-standard auto market for what they consider to be high-risk drivers.  Should you decide to buy in one of these markets, be sure to shop carefully because eligibility requirements and rates vary.

If you can’t find a company that will insure you, you can get liability coverage through the California Automobile Assigned Risk Plan (CAARP). This plan is designed for drivers who do not qualify as good drivers and are unsuccessful in obtaining insurance from non-standard or approved surplus lines insurance companies.  To apply for the plan, find a CAARP certified insurance agent or call CAARP direct.  

The plan works by taking your application and assigning it to an insurance company. All insurance companies licensed in the state must accept CAARP applicants. The amount of CAARP assignments is based on insurance company marketshare.  The more automobile policies an insurance company issues, the larger the portion of CAARP assignments they are required to take.

The rates used by the plan are the same no matter what insurance company issues the policy. The plan also offers installment options.  After three years with a clean driving record, consumers underwritten through CAARP can move from the program to a standard lines insurance company.  No broker’s fee can be charged in connection with a CAARP policy.