If you drive an automobile in California, laws California auto insurance dictates that you must be financially responsible for your actions. All drivers must show their ability to pay for damages or injury to others resulting from the ownership or operation of a motor vehicle. California's Compulsory Financial Responsibility Law requires every driver and owner of a motor vehicle to be financially responsible for his or her actions. In accordance with auto insurance law of the state, the statutory minimum limits of automobile liability insurance go like this: for bodily injury: $15,000 for death or injury of any one person, any one accident and for Property Damage, it’s $5,000 for any one accident.

There are four ways to accomplish financial responsibility under laws California auto insurance: Coverage by a motor vehicle or automobile liability insurance policy; A cash deposit of $35,000 with the Department of Motor Vehicles (DMV); A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or a surety bond for $35,000 obtained from an insurance company licensed to do business in California. Under the auto insurance law, all California drivers and owners must have at least the statutory limits of minimum auto liability insurance or an approved alternative way to pay for injury or property damage they may cause. Penalties are very severe for non-compliance with this section of the vehicle code.

When your car is in an accident for which you are found legally liable, Bodily Injury liability covers your liability to others for injuries to them. Property Damage liability covers your liability for damage to someone else’s property. The most common way drivers choose to comply with the financial responsibility requirement mentioned in laws California auto insurance is by purchasing an automobile liability insurance policy. If you have an accident not covered by insurance, then your license may be suspended. Under the auto insurance law, it is your responsibility to provide liability insurance for any vehicle you own regardless of whom is operating the vehicle. It is illegal for those vehicles to be operated without meeting the requirements of this law.