Chapter 4. Commercial Vehicles of California Vehicle Code >> Division 7. >> Chapter 4.
Every owner of a vehicle used in the transportation of
passengers for hire, including taxicabs, when the operation of the
vehicle is not subject to regulation by the Public Utilities
Commission, shall maintain, whenever he or she may be engaged in
conducting those operations, proof of financial responsibility
resulting from the ownership or operation of the vehicle and arising
by reason of personal injury to, or death of, any one person, of at
least fifteen thousand dollars ($15,000), and, subject to the limit
of fifteen thousand dollars ($15,000) for each person injured or
killed, of at least thirty thousand dollars ($30,000) for the injury
to, or the death of, two or more persons in any one accident, and for
damages to property of at least five thousand dollars ($5,000)
resulting from any one accident. Proof of financial responsibility
may be maintained by either:
(a) Being insured under a motor vehicle liability policy against
(b) Obtaining a bond of the same kind, and containing the same
provisions, as those bonds specified in Section 16434.
(c) By depositing with the department thirty-five thousand dollars
($35,000), which amount shall be deposited in a special deposit
account with the Controller for the purpose of this section.
(d) Qualifying as a self-insurer under Section 16053.
The department shall return the deposit to the person entitled
thereto when he or she is no longer required to maintain proof of
financial responsibility as required by this section or upon his or
(a) Except as specified in subdivision (b), the owner of
the following commercial vehicles shall maintain proof of financial
responsibility in the amount required by the director:
(1) A vehicle used to carry passengers for hire, except taxicabs
as defined in subdivision (c) of Section 27908.
(2) A vehicle having an unladen weight of over 7,000 pounds which
is used in the transportation of property in the conduct of a
(b) Subdivision (a) does not apply to the following vehicles:
(1) A schoolbus.
(2) A motor vehicle used by a farmer exclusively in the
transportation of his or her livestock, implements of husbandry, and
agricultural commodities or in the transportation of supplies to his
or her farm.
(3) A motor vehicle used by a resident farmer of this state to
occasionally transport from the place of production to a warehouse,
regular market, place of storage, or place of shipment the farm
products of neighboring farmers in exchange for like services, farm
products, or other compensation.
(4) A vehicle used in for-hire transportation which is subject to
regulation by the Public Utilities Commission.
(5) A rented vehicle used for noncommercial transportation of
(c) The director shall establish the amounts which are determined
adequate to cover damages resulting from the ownership or operation
of a commercial vehicle or vehicles subject to this section arising
by reason of personal injury to, or death of, any person or damage to
property, or both. The director shall establish the amounts at
levels equal to those prescribed by the Public Utilities Commission
for owners and operators of for-hire vehicles subject to its
jurisdiction and control.
(d) Proof of financial responsibility may be maintained by any of
(1) Being insured under one or more motor vehicle liability
policies against that liability.
(2) Obtaining a bond of the same kind, and containing the same
provisions, as those bonds specified in Section 16434.
(3) By depositing with the department five hundred thousand
dollars ($500,000), which amount shall be deposited in a special
deposit account with the Controller for the purpose of this section.
(4) Qualifying as a self-insurer under Section 16053.
(e) The department shall return the deposit made pursuant to
paragraph (3) of subdivision (d) to the person entitled thereto when
the owner is no longer required to maintain proof of financial
responsibility as required by this section or upon the owner's death.
(f) An insurer, agent, or broker who has been incorrectly informed
by an owner of a vehicle or his or her representative that the
vehicle is 7,000 pounds or less unladen weight, or is incorrectly
informed by the owner or his or her representative that the vehicle
is exempt from the requirements of subdivisions (a) and (c) pursuant
to the exemptions set forth in subdivision (b), may issue a policy of
motor vehicle liability insurance in any amount less than that
required by the director but not less than the amounts required under
Section 16451. The policy of motor vehicle liability insurance when
issued shall not be deemed to provide liability coverage amounts
greater than that specifically set forth in the policy
notwithstanding that the vehicle weighs in excess of 7,000 pounds
unladen weight or is subsequently used in a manner which would have
required the vehicle to be insured in the amounts established by the
director pursuant to subdivision (c).
The provisions of this chapter shall not prevent local
authorities, within the reasonable exercise of the police power, from
adopting rules and regulations, by ordinance or resolution,
licensing and regulating the operation of any vehicle for hire and
the drivers of passenger vehicles for hire.
(a) An owner shall not use, or with his or her consent
permit the use of, a vehicle used in the transportation of persons or
property in the conduct of a business, without maintaining proof of
financial responsibility as required by this chapter.
(b) A motor vehicle from another country in which there is no
evidence of financial responsibility required pursuant to this
chapter or Part 387 (commencing with Section 387.1) of Title 49 of
the Code of Federal Regulations shall be denied entry into the state.
The department shall suspend the registration of all
vehicles used in the transportation of persons or property in the
conduct of a business, except vehicles subject to regulation by the
Public Utilities Commission, which are registered in the name of any
person convicted of violating Section 16502 immediately upon receipt
of a duly certified abstract of the record of the court in which the
person was convicted.
The suspension shall remain in effect and no such vehicle shall be
registered in the name of the person until he or she gives the
department proof of his or her financial responsibility as required
by Section 16500.