We all know that you are required, by law, to maintain valid auto insurance in California. Did you know that if your auto insurance cancels, an automatic notice is sent to the Department of Motor Vehicles, and the DMV will suspend your registration?
However, the biggest reason to carry auto insurance coverage is not because California Law says you must. The biggest reason to have auto insurance is to make sure that if you cause a car accident, you can afford to pay for the damage you caused. This coverage is called liability, and if you don’t have it, or have it, but carry low coverage limits, you could be setting yourself up for a financial disaster. Don’t believe the myth that if you don’t have anything they (other party, lawyers, and court) can’t get anything. The truth is in a court settlement, future wages can be attached; properties can have liens placed against them, and more.
In addition to liability coverage, you will want to protect yourself from other drivers who carry no or low liability insurance by purchasing uninsured/underinsured motorist coverage at limits matching your liability coverage. You may also want to protect your vehicle by purchasing physical damage coverage for your car called collision and comprehensive coverage.