Commercial Vehicles - - CA Vehicle

Section § 16500

This law is about the financial responsibility required for vehicle owners who transport passengers for hire, like taxicabs, when they aren't regulated by the Public Utilities Commission. Vehicle owners must have insurance or bonds that cover personal injury or death and property damage in accidents. Starting January 1, 2025, there are specific minimum amounts: $30,000 for injury or death to one person, $60,000 for injuries or deaths to multiple people, and $15,000 for property damage per accident. Alternatively, owners can deposit $75,000 with the department or qualify as self-insured.

In 2035, these minimums will increase: $50,000 for injury or death to one person, $100,000 for injuries or deaths to multiple people, and $25,000 for property damage. The deposit requirement will also rise to $125,000. This law will start being enforced on January 1, 2025.

(a)

(1) 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 the owner may be engaged in conducting those operations, either of the following:

(A) 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.

(B)

(i) Notwithstanding subparagraph (A), 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 thirty thousand dollars ($30,000), and, subject to the limit of thirty thousand dollars ($30,000) for each person injured or killed, of at least sixty thousand dollars ($60,000) for the injury to, or the death of, two or more persons in any one accident, and for damages to property of at least fifteen thousand dollars ($15,000) resulting from any one accident.

(ii) The proof of financial responsibility limits required by clause (i) shall apply to a motor vehicle liability policy, described in subparagraph (A) of paragraph (2), or bond, described in subparagraph (B) of paragraph (2), issued or renewed on or after January 1, 2025.

(2) Proof of financial responsibility may be maintained by any of the following:

(A) Being insured under a motor vehicle liability policy against that liability.

(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 seventy-five thousand dollars ($75,000), which 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.

(b) The department shall return the deposit to the person entitled thereto when the person is no longer required to maintain proof of financial responsibility as required by this section or upon the person’s death.

(1) The minimum liability coverage shall be increased by twenty thousand dollars ($20,000) for bodily injury or death for one person, by forty thousand dollars ($40,000) for bodily injury or death for all persons, and by ten thousand dollars ($10,000) for property damage.

(2) The minimum liability coverage required by paragraph (1) shall apply to a motor vehicle liability policy, described in subparagraph (A) of paragraph (2) of subdivision (a), or bond, described in subparagraph (B) of paragraph (2) of subdivision (a), issued or renewed on or after January 1, 2035.

(3) The deposit requirement in subparagraph (C) of paragraph (2) of subdivision (a) shall be increased by fifty thousand dollars ($50,000).

(d) This section shall become operative on January 1, 2025.

proof of financial responsibility vehicle owner requirements passenger transportation hire vehicles taxicab insurance Public Utilities Commission exemption personal injury coverage death coverage property damage coverage motor vehicle liability policy financial responsibility bond self-insurance qualification insurance deposit requirements 2025 enforcement date 2035 coverage increase

(Amended (as added by Stats. 2022, Ch. 717, Sec. 11) by Stats. 2023, Ch. 204, Sec. 21. (AB 1140) Effective January 1, 2024. Operative January 1, 2025, by its own provisions.)

Section § 16500.5

This law requires the owners of certain commercial vehicles to maintain proof of financial responsibility, meaning they must have insurance or other financial means to cover damages if their vehicles cause injury, death, or property damage. Vehicles that carry passengers for hire, except taxis, and those over 7,000 pounds used for business property transport must meet this requirement.

However, school buses, vehicles used by farmers for specific farm-related tasks, and vehicles regulated by the Public Utilities Commission, among others, are exempt. The law lays out several ways to prove financial responsibility, including insurance policies, bonds, a $500,000 deposit, or qualifying as a self-insurer. If certain vehicles are misrepresented in terms of weight or exemptions, an insurance policy may be issued with lower coverage, but it won't cover more than specified even if needed.

(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 business.

(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 property.

(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 the following:

(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).

commercial vehicle insurance proof of financial responsibility passenger transport vehicles property transport vehicles vehicle weight exemption school buses exemption farmer vehicle exemption Public Utilities Commission regulation insurance policy limits self-insurance vehicle liability bonds financial responsibility deposit insurance misrepresentation commercial vehicle requirements vehicle exemption criteria

(Amended by Stats. 1989, Ch. 1157, Sec. 24.)

Section § 16501

This law section allows local governments to create their own rules and regulations regarding vehicles for hire and their drivers. It means they can issue licenses and set regulations for operations within their area, as long as they act within a reasonable use of their authority.

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.

local authority regulations vehicles for hire driver licensing ordinance or resolution passenger vehicle regulation local government control vehicle operation regulation police power driver regulation vehicle licensing local rules for vehicles hire vehicle operation local ordinances for vehicles passenger transportation regulations

(Amended by Stats. 1965, Ch. 1554.)

Section § 16502

This law emphasizes that if you own a vehicle used for business purposes, such as transporting people or goods, you must have proof of financial responsibility, like insurance. Additionally, vehicles coming from another country must also show this proof or they will not be allowed into the state.

(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.

vehicle insurance business vehicle requirements financial responsibility transportation of persons transportation of property proof of insurance foreign vehicles entry denial business conduct vehicle ownership international vehicle entry Code of Federal Regulations financial proof vehicle regulation cross-border vehicle regulation

(Amended by Stats. 2006, Ch. 288, Sec. 5. Effective January 1, 2007.)

Section § 16503

If someone is convicted of violating Section 16502 while using a vehicle for business purposes, the state will suspend the registration of all their business vehicles, unless those vehicles are regulated by the Public Utilities Commission.

This suspension will remain until the person provides proof of financial responsibility, as required by another law, Section 16500.

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.

vehicle registration suspension business vehicle violation proof of financial responsibility Public Utilities Commission exception conviction Section 16502 transportation of persons transportation of property certified court record business vehicle regulation financial responsibility requirements Section 16500 compliance

(Amended by Stats. 1989, Ch. 1157, Sec. 26.)