Article 3. Financial Responsibility of California Public Utilities Code >> Division 9. >> Part 5. >> Chapter 3. >> Article 3.
A policy or bond is not effective under Article 2 unless:
(a) Issued either (1) by an insurer or surety company authorized
to do business in this state, or (2) by an insurer or surety company
not authorized to do business in this state but which is found by the
department to afford adequate protection and which has filed or
shall file with the department a power of attorney authorizing the
department to accept service on his behalf of notice or process in
any action upon the policy or bond arising out of such accident.
(b) If the accident results in bodily injury to or death of a
person not a passenger, the policy or bond provides coverage of not
less than fifty thousand dollars ($50,000) because of bodily injury
to or death of one person in any accident and one hundred thousand
dollars ($100,000) because of bodily injury to or death of two or
more persons in any one accident.
(c) If the accident results in damage to or destruction of
property, the policy or bond provides coverage of not less than fifty
thousand dollars ($50,000) because of damage to or destruction of
property in any one accident with the exception of the following
property which is exempted from the security required under this
part: property owned, rented, occupied or used by, or in the care,
custody or control of the owner or operator or carried in or on the
The policy or bond need not cover:
(a) Any liability on account of bodily injury to or death of any
employee of the owner or operator while the employee is engaged in
the duties of the person's employment.
(b) Any obligation for which the owner or operator or the insurer
of the owner or operator may be held liable under any workers'
(c) A guest, or any other person, riding in or upon any aircraft
without giving compensation.
(d) (1) Any liability for bodily injury or death of any occupant
riding in or upon an aircraft or exiting an aircraft for purposes of
skydiving or sport parachuting when that occupant's injury or death
is solely related to hazardous risks associated with skydiving or
sport parachuting activities.
(2) Any person described in paragraph (1) who is not afforded the
protection of liability insurance in connection with skydiving or
sport parachuting activities shall be provided a notice in at least
14-point type that discloses the fact that no liability insurance is
in effect that provides coverage for the skydiving or sport
parachuting activities that are being undertaken.
Any person may at any time apply to the department for a
certificate of self-insurance, whether or not there has occurred an
accident as a result of which he might be affected by some other
provision of this part.
The department may in its discretion issue a certificate of
self-insurance when satisfied that the applicant is possessed and
will continue to be possessed of ability to pay judgments against him
within the limits provided in this part.
Upon not less than 10 days notification of a self-insurer
the department may for reasonable cause cancel a certificate of
self-insurance and shall cancel such certificate upon failure to pay
any judgment within 30 days.
The security required under this part shall be cash or
securities permissible under state law as security for deposit of
state funds and in such amount as the department may require but in
no case in excess of the limits specified in Section 24350 in
reference to the limits of a policy or bond. If at the time of the
accident there is in effect a liability policy or a bond meeting the
requisites of this part other than in the amount of coverage set
forth in Section 24350, the department may consider such policy or
bond in fixing the amount of security. The person depositing security
shall specify in writing the person or persons on whose behalf the
deposit is made and, at any time while such deposit is in the custody
of the state agency with which the deposit is made the person
depositing it may, upon approval of the department, amend in writing
the specification of the person or persons on whose behalf the
deposit is made to include an additional person or persons; provided,
however, that a single deposit of security shall be applicable only
on behalf of persons required to furnish security because of the same
Upon 10 days notification of the parties concerned, the
department may reduce, or, within the limits specified in Section
24350, increase the amount of security ordered in any case if in its
discretion the amount ordered is excessive or insufficient. In case
the security originally ordered has been deposited, the excess shall
be returned to the depositor notwithstanding the provisions of
Section 24357. Substitution of security shall be permitted.
Security deposited in compliance with the requirements of
this part shall be delivered to the department. The department shall
deposit all cash received as security in a special account in the
Special Deposit Fund provided by Article 2 (commencing with Section
16370) of Chapter 2, Part 2, Division 4, Title 2 of the Government
Code, shall record the receipt of all securities received by it and
deposit such securities with the State Treasurer, and shall retain in
its custody all original insurance policies or copies thereof
delivered to it. Security deposited with any agency other than the
department shall be released only:
(a) Upon certificate of the department in the payment of a
judgment rendered against the person or persons on whose behalf the
deposit was made, for damages arising out of the accident in a civil
action, begun not later than one year after the date of the accident
or within one year after the date of deposit of any security under
subdivision (c) of Section 24330 or in the payment of a settlement,
agreed to by the depositor and all the claimants, of a claim or
claims arising out of the accident.
(b) Upon certificate of the department issued after 10 days
notification of all claimants upon evidence satisfactory to the
department that all claims arising from such accident have been
satisfied by either (1) a release from liability, or (2) a judgment
of nonliability, or (3) a written agreement in accordance with
subdivision (h) of Section 24327, or whenever, after the expiration
of one year from the time of the accident or from the date of deposit
of any security under subdivision (c) of Section 24330 the
department is given evidence satisfactory that there is no such
action pending and that no judgment rendered in any such action is
(c) Upon the certificate of the department that other security
complying with Section 24355 and satisfactory in form, character and
amount, has been deposited with it in lieu of the original security
(d) Upon the death of the person on whose behalf such proof was
(e) In the event of the permanent incapacity of such person to
operate an aircraft if the department is furnished proof of such
The department shall not release such proof: (1) if any action for
damages upon a liability referred to in this part is then pending,
or (2) if any judgment upon any such liability is outstanding and
An affidavit of the applicant of the nonexistence of such facts
shall be prima facie evidence thereof.
Any security deposited with the department shall be released by it
for any reason authorizing it to issue a certificate pursuant to
subdivision (a), (b) or (c) when security is in the custody of
another state agency.
Such security shall be available for the following purposes:
(a) Payment of a final judgment or judgments in any amount for
bodily injury or in excess of four hundred dollars ($400) for
property damage, rendered against the owner or operator on whose
behalf the deposit was made, for damages arising out of the accident
in an action at law, begun not later than one year after the date of
(b) Payment of any settlement agreement covering any claim arising
out of the accident.
(c) Payment of any final judgment rendered as a result of default
under any duly acknowledged settlement agreement.
Every distribution of funds from the security deposit shall be
subject to the limits of the department's evaluation on behalf of a
claimant but not in excess of the maximum amounts provided in this
part for bodily injury and for property damage.
Every judgment shall for the purposes of this part be deemed
(a) When fifty thousand dollars ($50,000) has been credited, upon
any judgment in excess of that amount, or upon all judgments,
collectively, which together total in excess of that amount, for
personal injury to or death of one person as a result of any one
(b) When, subject to the limit of fifty thousand dollars ($50,000)
as to one person, the sum of one hundred thousand dollars ($100,000)
has been credited upon any judgment in excess of that amount, or
upon all judgments, collectively, which together total in excess of
that amount, for personal injury to or death of more than one person
as a result of any one accident.
(c) When fifty thousand dollars ($50,000) has been credited upon
any judgment in excess of that amount, or upon all judgments,
collectively, each of which is in excess of fifty thousand dollars
($50,000), and which together total in excess of fifty thousand
dollars ($50,000), for damage to property of others as a result of
any one accident.
Whenever any evidence of proof of ability to respond in
damages filed by any person under the provisions of this part no
longer fulfills the purpose for which required the department shall,
for the purpose of this part, require other evidence of ability to
respond in damages as required by this part.
No insurance policy meeting the requirements of Section
24350 shall be canceled unless 30 days' prior notice is given to the
department by either the insured or the insurance company.
Every person permitting another person to operate an
aircraft under the terms of any rental agreement or lease which
provides for any remuneration for the use of such aircraft shall
deliver either of the following to the person renting the aircraft:
(a) A written certification that an aircraft liability policy of
insurance exists for the operator thereof, specifying the name of the
insurance company providing such coverage, the policy number, the
expiration date of such policy, the nature and extent of coverage,
and a statement that such coverage complies with the financial
responsibility laws of California applicable to the operation of an
aircraft. Such certification shall be furnished and signed, by
facsimile or otherwise, by a California licensed insurance agent,
broker, or insurance carrier. The person delivering the written
authorization provided for herein shall certify as to the accuracy
thereof as of the date of delivery.
(b) A written statement that no insurance coverage exists for the
operator of the aircraft. Such statement shall be delivered to the
person renting the aircraft prior to entering into any binding rental
agreement and shall substantially conform to the following text:
"NOTICE TO AIRCRAFT OPERATOR
"You are hereby notified that no insurance coverage is being
provided to cover your liability for bodily injury and property
damage you may cause as an operator of any aircraft covered by our
"You are further notified that the Uniform Aircraft Financial
Responsibility Act (Part 5 (commencing with Section 24230) of
Division 9 of the Public Utilities Code) requires that you be able to
post security in an amount up to $50,000 because of bodily injury or
death to one person in any one accident, up to $100,000 because of
bodily injury or death to two or more persons in any one accident,
and up to $50,000 in the event of damage to or destruction of
"Failure to furnish sufficient security or failure to furnish
evidence of proof of ability to respond in damages as required under
Section 24325 and Section 24360 of the Public Utilities Code is a
(c) No insurance agent, broker, or insurance carrier shall have
any liability as a result of the failure to deliver the certificate
specified in paragraph (a).