Which forms of financial responsibility are accepted?

Coverage by a motor vehicle liability insurance policy is an accepted form of financial responsibility because it provides the necessary legal protection for drivers against claims stemming from bodily injury and property damage that they may cause while operating a vehicle. In California, having valid liability insurance is a requirement for registering a vehicle and obtaining a driver's license.

Additionally, liability insurance ensures that a driver has the ability to cover costs associated with accidents, which can include medical expenses and vehicle repairs for the other party involved. This requirement is in place to protect all road users by ensuring that drivers can take responsibility for their actions.

While other options may seem viable, they either do not meet the legal requirements or pertain to financial responsibility in other contexts. For instance, a deposit with the DMV is an alternative option but not the primary or most common method drivers use to show financial liability. Liability insurance serves as the mainstay for financial responsibility, making it essential for lawful driving in California.