Liability Insurance

• Liability insurance helps to cover the costs of any injuries or damage to property a driver might cause to a third party with a vehicle. That's all it covers, however. It will not pay for the driver's injuries or any damage the driver does to his own property. Liability insurance usually covers any vehicles the policy holder owns, as well as any vehicle he drives as long as he has the owner's permission.
  
  

Liability Minimum Requirements

• California requires at least $15,000 coverage in the case of injury or death to one person, $30,000 for injury or death caused to more than a single person, and $5,000 to cover property damage. It's prudent to shop around to get the best price, and to consider more than the minimum coverage. An auto accident can result in more than $5,000 worth of damage, but the liability insurance won't pay any more than that, leaving the policy holder responsible for any excess damages.
  
  

Proof of Insurance

• After buying a policy, you may be required to show proof of insurance. Often, simply carrying the insurance document or ID card is enough, but in some instances California requires additional proof. Some drivers may be required to submit their document or ID card to the DMV, and will have to get a second one from their insurance company.
  
  

Lack of Coverage Penalties

• Failure to maintain insurance coverage can result in the suspension of vehicle registration. A driver who can't show proof of insurance if she's pulled over may receive a traffic ticket for $1,000 or more. Vehicles can be impounded, fines may apply, and the driver will be responsible for any damagesshe causes in an accident.