Financial Responsibility Hearings
Every person who owns or operates a motor vehicle in the State of California, is mandated to maintain appropriate liability insurance on that vehicle. This insures that any persons injured, or any property damaged, as a result of an automobile accident or incident can be compensated for that injury or damage. It is the goal of this law to make sure that victims of accidents are “made whole” to the extent possible.
California’s Compulsory Financial Responsibility Law, mandates that those owning or operating motor vehicles, maintain the ability to financially compensate victims who sustain injury or property damage as a result of vehicle accidents or incidents, without regard to negligence, liability, carelessness or culpability.
California Vehicle Code Section (CVC), 16020, states, “Every driver and every owner of a motor vehicle shall at all times be able to establish financial responsibility pursuant to Section 16021, and shall, at all times, carry in the vehicle evidence of the form of financial responsibility in effect for the vehicle.”
CVC Section 16070, provides for a one-year suspension of the driver license for the driver or owner who fails to prove that he or she had appropriate auto insurance in effect at the time of a reportable accident.
CVC Section 16000(a), mandates that every driver involved in an accident or a public street or highway, to report the accident within 10 days to the Department of Motor Vehicles. The report is required if anyone was killed or injured, or of the damage to any single person’s property exceeds $750.
CVC Section 16000.1(a), also directs that certain “off-road” accidents be reported if, the accident occurred off-road, if the vehicle is subject to State Vehicle Registration, if the damage to any single person’s property exceeds $750; and, if there was a death or any injury, however slight. If the accident was “off-road,” any damage was confined to that of the owner/driver, and if there were no injuries; the accident need not be reported.
CVC Section 16075(c), mandates that the Department of Motor Vehicles, provide the opportunity for a driver/owner to conduct an Administrative Hearing before the DMV suspends that person’s driver license.
Proving Financial Responsibility
The California Vehicle Code provides several different means by which a driver or owner may prove compliance with the Compulsory Financial Responsibility Law.
CVC Section 16021, states……. “Financial Responsibility is established if the driver or owner is:
- an insured person or principal under a form of liability insurance or surety bond. This normally the standard “Proof of Insurance” certificate issued by a person’s insurance company.
- Is the holder of a DMV issued certificate of self-insurance. This normally involves privately owned companies with more than 25 registered vehicles, who are financially capable of satisfying the requirements of financial responsibility.
- The United States of America, State of California, or any County or Municipality.
- Is a depositor pursuant to CVC Section 16054.2(a).
- Is in compliance with the law by any other means.
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