California is well known for its high cost of living. Because of this, some drivers might be tempted to cut costs by eliminating their auto insurance coverage while continuing to drive, risking the chance of penalties if they are caught.
Canceling your car insurance to save some money can be a great idea—as long as you’re thinking of simultaneously ceasing all driving, opting instead for public transit or a local carpool. Driving without insurance puts not only yourself but other drivers at risk, and it’s not something you should chance.
While driving without insurance in California has less severe penalties than it does in other states, it’s still illegal unless you have a lot of money lying around to self-insure, and it is very much not worth the small amount you will save to go without insurance otherwise. Let’s look at the severe penalties and costs you could incur if you dare to drive in California without auto insurance.
Legal Penalties for Driving Without Insurance
Often, California is seen as a leader when it comes to new and severe penalties for any number of criminal or civil violations. Not so in the area of uninsured drivers, however. Compared to the nation as a whole, California’s penalties are rather tame. But that does not mean that you won’t feel the sting.
In lieu of a traditional insurance policy, California drivers have the option of obtaining a self-insurance certificate from the Department of Motor Vehicles (DMV), which usually requires providing evidence of a $35,000 cash deposit either directly with the DMV or through a surety bond with a business.1
Drivers (residents and those from out of state merely driving through California) that are caught operating a vehicle without valid insurance or a self-insurance certificate will be fined anywhere from $100 to $200 for a first offense and between $200 and $500 for a second offense. While $100 may not sound like much, with additional penalties and fees, that $100 penalty may end up costing you closer to $450.
Additionally, your vehicle may be impounded and towed away, in which case you will not be able to get it back until you obtain insurance and pay all towing and storage fees, which can be substantial.2
Legal Penalties for an Accident
An auto accident can be traumatic no matter how severe or who is injured. If you are involved in a crash in California, pull off the road, stop, and immediately call 911 to report the accident to the police or the California Highway Patrol. When the police arrive, you will be required to show them your driver’s license, vehicle registration card, and proof of insurance.
If you don’t have valid insurance (or proof of financial responsibility), you’re going to have some trouble. In California, your license will be suspended, possibly for up to four years. Bear in mind that this can happen whether or not you are at fault for the accident.3
If you get caught driving without insurance, you will also be required to get an SR-22 Proof of Financial Responsibility certificate and carry an additional high-cost SR-22 insurance policy on top of your regular one.4
Civil Costs for an Accident Without Insurance
Legal penalties are one thing. What about the cost of the accident itself? If you are the party at fault, then you are responsible for the cost of all resulting damage. And that means everything: damage to all vehicles involved and all medical costs for injuries to yourself, the other driver, and any third-parties. You are also responsible for damage to other public and private property such as street signs and lights, bus stop fixtures, and storefronts.
You should not rely on the other driver having uninsured motorist coverage to make up for you being uninsured, either. If you have assets, the other driver’s insurance company is likely to sue you to recover their costs. For example: suppose you get into an accident that is your fault resulting in tens of thousands of dollars in damage. If you have no vehicle insurance, but own a home with $100,000 in equity, the other party’s insurance company is likely to sue you to recover the thousands it paid out to their client. If you can’t pay up, you may lose your home.
The Bottom Line
If you’re caught driving without insurance in California, it may be a good idea to contact an attorney for advice on how to proceed and avoid stiffer penalties. But the bottom line is, if you’re considering driving in California without valid insurance, don’t do it. The risk is too high and the penalties too severe. If you are looking to save money, you may be able to reduce some of your coverage or increase your deductible. Just don’t risk driving uninsured.