According to California's Compulsory Financial Responsibility Law, all vehicles that are operated or parked on California roadways must carry financial responsibility (commonly known as insurance). This law has been enacted so if you make a mistake (which we all may do at some point) and hit another driver or pedestrian, insurance coverage is available to pay for the injury and damage to the other person or vehicle.
Below are the different types of acceptable financial responsibilities for a vehicle (you are only required to have one of the below financial responsibility types):
Needless to say, the most common financial responsibility option is carrying liability insurance.
In California, you are required to have the following minimum liability insurance coverage: