What They Don't Teach You in High School

4 Insurance may not be at the top of your priority list right now, but soon it will be. If you have been lucky enough to be on your parents’ automobile insurance policy, you may never have even considered what automobile insurance is all about. If you have a driver’s license, in the near future, it is going to be up to you to get automobile insurance because you can’t stay on your parents’ policy forever. So, why do you need auto insurance anyway? Well, the first answer is simple: it’s the law. The Department of Motor Vehicles (DMV) requires that you take financial responsibility for owning and operating an automobile in California. Evidence of financial responsibility must be carried at all times in the vehicle. Most licensed drivers in California satisfy their financial responsibility through automobile insurance companies, who provide the policyholder with an identification card to be used as evidence of coverage. The card must state the insurance company’s name and address, the period of coverage and the policy number. Your insurance company notifies the DMV when you buy auto insurance or if you stop paying your premium. Minimum Liability Coverage Liability insurance protects you when you cause property damage or bodily injury to someone else when driving your car. Bodily injury liability limits must meet the minimum of $15,000 for injury or death of 1 person per accident, $30,000 for injury or death of 2 or more persons per accident and $5,000 for any property damage per accident. If you are caught driving without auto liability insurance in California you will be charged hefty penalties. Violators can face up to hundreds of dollars in fines for a first time offense. Also, if you are involved in an accident and do not have liability insurance, your license may be suspended whether or not you are at fault. When parents or guardians sign for a minor to get a driver’s license, they are stating that they will accept financial responsibility for that minor. Evidence of financial responsibility must be carried at all times in the vehicle. Why Should You Care About Auto Insurance?