California Driver’s Handbook

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Section 28 of 28


Financial Responsibility

The California Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. There are 4 forms of financial responsibility:

  • A motor vehicle liability insurance policy.
  • A deposit of $35,000 with DMV.
  • A surety bond for $35,000 obtained from a company licensed to do business in California.
  • A DMV-issued self-insurance certificate.

You must possess evidence of financial responsibility whenever you drive, and show it to a peace officer after a traffic stop or collision when asked to do so. You may have to pay a fine or have your vehicle impounded if you do not comply with this law.

Insurance Requirements

The law states that you must be financially responsible for your actions whenever you drive and for all the motor vehicles you own. Most drivers choose to have a liability insurance policy as proof of financial responsibility. If you have a collision not covered by your insurance, or you do not have insurance, your DL will be suspended. If the driver is not identified, the owner of the motor vehicle involved in a collision will have their DL suspended.

The minimum amount your insurance* must cover per collision is:

  • $15,000 for a single death or injury.
  • $30,000 for death or injury to more than one person.
  • $5,000 for property damage.

* Low cost automobile policies are available in Alameda, Contra Costa, Fresno, Imperial, Kern, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara, and Stanislaus counties. Please contact your insurance agent.

Call 1-800-927-HELP before you purchase insurance to confirm that your agent/broker and insurer are licensed by the California Department of Insurance.

If you are visiting California or have just moved here, be aware that not all out-of-state insurance companies are authorized to do business in California. Before you drive here, ask your insurance company if you are covered in case of a collision. If you have a collision in California, all 3 of the following conditions must be met to avoid the suspension of your driving privilege:

  1. Your liability policy must provide bodily injury and property damage coverage which equals or exceeds the required limits stated in this section.
  2. Your insurance company must file a power of attorney allowing DMV to act as its agent for legal service in California.
  3. You must insure the vehicle before you come to California. You cannot renew the out-of-state policy once the vehicle is registered in California.

Collisions On Your Record

DMV retains information on every collision reported to DMV by:

  • Law enforcement, unless the reporting officer states another person was at fault.
  • You or another party involved in the collision, if any one person has over $1,000 in damage, or if anyone is injured or dies.

It does not matter who caused the collision; DMV must keep this record.

Collisions, Insurance, and Minors

If you are under 18 years old, your parent(s) or guardian(s) must sign your DL application and assume financial responsibility for your driving. When you reach age 18, your parent(s) or guardian(s)’ liability automatically ends.

If you are involved in a collision, your parent(s) or guardian(s) may be liable for civil damages and you may also be fined.

Exception: Your parent(s) or guardian(s) can have your DL cancelled at any time while you are a minor.

Getting a Ticket

If you are stopped by a peace officer and cited for a traffic law violation, you sign a promise to appear in traffic court. When you go to court, you may plead guilty or not guilty, or you may forfeit (pay) the citation fine. Paying the fine is the same as a guilty plea.

If you ignore the traffic ticket and do not keep your promise to appear in court, the failure to appear (FTA) goes on your driver record. Even a single FTA can cause DMV to suspend your DL. To end the suspension, you must clear all FTAs with the court, and pay a DL reissue fee of $55.

Legislation effective June 27, 2017, no longer allows courts to notify DMV if you fail to pay a fine (FTP). Failing to pay a fine will no longer result in the suspension of your driver license. To get more information about the new law, visit DMV’s website at

Each time you are convicted of a moving traffic law violation, the court notifies DMV and the conviction is placed on your DL record. Convictions reported by other states are also added to your driver record.

Evading a Peace Officer

Any person, while operating a motor vehicle, who willfully flees or attempts to evade a peace officer performing their duties is guilty of a misdemeanor punishable by imprisonment in a county jail for not more than 1 year (CVC §2800.1).

If a person is convicted of causing serious bodily injury during the course of a police pursuit (CVC §2800.3(a)), they are subject to:

  • Imprisonment in a state prison for 3, 5, or 7 years or in a county jail for not more than 1 year.
  • A fine that is not less than $2,000 or more than $10,000.
  • Both a fine and imprisonment.

When a person is convicted of manslaughter resulting from evading police during a pursuit, they are subject to imprisonment in a state prison for a minimum of 4 to 10 years (CVC §2800.3(b)).

Points on the Driver Record

Your traffic convictions and collisions stay on your record for 36 months, or longer, depending on the type of conviction.

The Negligent Operator Treatment System (NOTS) is based on negligent operator points and consists of a computer generated series of warning letters and progressive sanctions against the driving privilege.

You may be considered a negligent operator when your driving record shows one of the following “point count” totals:

  • 4 points in 12 months.
  • 6 points in 24 months.
  • 8 points in 36 months.

The point count may vary for commercial drivers. For detailed point count information, refer to the California Commercial Driver Handbook (DL 650).

Traffic Violator School Convictions

When a noncommercial driver is cited for a 1 point traffic violation, the judge may offer the driver the opportunity to attend a traffic violator school once in any 18-month period to have the citation masked from their driving record. Completion of the course is reported electronically to the court by the school; however, the student will receive a completion receipt from the school.

When a commercial driver is cited in a noncommercial vehicle, the driver may be eligible to attend traffic school. Refer to DMV’s website for further information at

Suspension or Revocation

If you get too many negligent driver points, DMV will place you on probation for 1 year (which includes a 6 month suspension) or revoke your driving privilege (refer to the topics included in the “Administrative” section). Your suspension or revocation order informs you of your right to a hearing.

At the end of the suspension or revocation period, you may apply for a new DL and must show proof of financial responsibility.

DMV will revoke your DL if you are convicted of a hit-and-run or reckless driving that resulted in injury.

Courts have the authority to suspend a person’s DL.

Record Confidentiality

Most information in your DL record is available to the public. Your residence address may only be viewed by authorized agencies. Your mailing address, if different from your residence, is less restricted.

Records on the physical or mental condition of a driver remain confidential.

You may obtain a copy of your driving record at any DMV field office for a fee with valid ID.

Vandalism/Graffiti—All Ages

California law allows the courts to suspend the DL for up to 2 years of a person convicted of engaging in vandalism, including graffiti. If you are convicted and do not have a DL, the courts can delay the issuance of your DL for up to 3 years from the date you are legally eligible to drive.

Speed Contests/Reckless Driving

A person convicted of driving recklessly or engaging in a speed contest which causes bodily injury to another person is subject to:

  • Imprisonment.
  • A fine.
  • Both a fine and imprisonment (CVC §23104(a)).

Possessing Firearms

The court will:

  • Suspend or revoke the driving privilege of any minor convicted of possessing a concealable weapon or live ammunition.
  • Impose DL sanctions for minors convicted of misdemeanors involving firearms.

Vehicle Registration Requirements

The following is a brief summary of California’s vehicle registration requirements. To obtain detailed information, visit

California Vehicles

When you purchase a new or used vehicle from a licensed California dealer, the dealer collects use tax fees to register and title the vehicle. The use tax is forwarded to California Department of Tax and Fee Administration (CDTFA).

The transfer and registration fees and documents are submitted to DMV which gives you temporary operating authority. Usually within 6 to 8 weeks after the purchase date, you will receive a registration card, license plates, stickers, and a California Certificate of Title, as appropriate.

If the dealer participates in the Business Partner Automation (BPA) program, the dealer or their registration service will process DMV documents and issue the registration card, license plates, and stickers to the customer.

If you obtain or purchase a vehicle from a private party, you must transfer the ownership within 10 days. Submit the following to DMV:

  • A properly endorsed and completed California Certificate of Title or Application for Duplicate or Paperless Title (REG 227) form.
  • Smog certification, if required.
  • Use tax payment, if required.
  • Vehicle/Vessel Transfer and Reassignment (REG 262) form, if applicable.
  • Appropriate vehicle registration fees.

When you sell or transfer a vehicle, report it to DMV within 5 days.

You can complete the Notice of Transfer and Release of Liability (REG 138) form online, download and mail the completed form, or call DMV at 1-800-777-0133 to request the form be mailed.

Out-of-State Vehicles

Vehicles registered in another state or foreign country must be registered in California within 20 days after you become a resident or get a job (refer here for information regarding additional residency criteria).

If you are a California resident and acquire a new vehicle, truck, or motorcycle (this includes certain diesel-powered vehicles) from another state, ensure that it meets California smog laws; otherwise, it might not qualify to be registered here. DMV cannot accept an application to register the vehicle in California when the vehicle does not qualify for registration (CHSC §§43150–43156).

Nonresident military personnel and their spouses may operate their vehicles in California with their valid home state license plates or until the plates issued from the state of their last assigned duty station expire. They may renew the registration in their home state before it expires or register the vehicle in California.

The items needed to register any out-of-state vehicle are:

  • Completed and signed Application for Title or Registration (REG 343) form.
  • Verification of the vehicle completed by DMV, law enforcement agent, or an auto club employee.
  • Out-of-state title and/or last issued out-of-state registration card, if the title is not submitted.
  • Smog certification, if required.
  • Weight certificate for commercial vehicles only.
  • Appropriate vehicle registration fees and use tax, if applicable.
  • Completed Odometer Mileage Disclosure Statement, if applicable.

If the vehicle is purchased from a dealer enrolled in the BPA program, the documentation may be submitted by the dealer to DMV.

Vehicle Theft Prevention Tips

Here are some tips you can use to help avoid becoming the victim of vehicle theft.

  • Never leave:
    • Your vehicle running and unattended, even to dash into a store.
    • The keys in the ignition.
    • Keys inside a locked garage or a hide-a-key box.
    • Valuables, such as purses, laptops, etc., in plain view even if your vehicle is locked. Place them out of sight.
    • Personal ID documents, such as the vehicle title or credit cards in the vehicle.
  • Always:
    • Roll up your windows and lock your vehicle even if it is parked in front of your house.
    • Park in high-traffic, well-lit areas whenever possible.
    • Immediately report a stolen vehicle to local law enforcement.
  • Suggestions:
    • Install a mechanical device that locks the steering wheel, column, or brakes.
    • Think about purchasing a vehicle theft tracking/security system, especially if you own one of the frequently-stolen model vehicles.
    • When you must leave your key with a valet, attendant, or mechanic, only leave the ignition key.
    • Copy your license plate and vehicle information on a card, and keep that information with you and not in the car. The police will need this information if your vehicle is stolen.