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There are four ways to accomplish financial responsibility in California:

Coverage by a motor vehicle or automobile liability insurance policy;

A cash deposit of $35,000 with the Department of Motor Vehicles (DMV);

A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or

A surety bond for $35,000 obtained from an insurance company licensed to do business in California.

Personally I feel those requirements are much too weak. If you cause a bad accident, hospital bills alone for the party you hit can easily exceed $1 million.

If having a certain amount of money in your bank account was an option, then that would mean that most people would never be able to drive until they are at least in their 30s or 40's, since your average teen or 20 something doesn't have thousands and thousands of dollars in the bank. I missed a stop sign (I have no memory of the accident so dont know how that happened) and hit a truck with landscaping equipment. I hit my head and was knocked out but the guy I hit just had minor scratches even though his truck flipped. Total cost for his ambulance and the damage to his landscaping equipment was around $60,000. I was 18, I dont know how many 18 year olds would have that kind of money in the bank. Because I was payin $150 a month or whatever it was in insurance, they covered it. I wouldnt call that a scam.

Actually you can have a certain amount of money and self insure. You don't have to purchase insurance.

Most Financial Responsibility Laws don't require insurance. They require a minimum amount of financial responsibility and insurance is the easiest way to do that.

But in many states -if you can prove that you have the cash to meet the minimum limits -you can file a bond and be self insured.

So....in NC where the limits are 30/60/25. You would have to prove that you have $85,000 to pay claims (60,000 for bi's and 25,000 for pd).

So...if you have 85K lying around (or what ever amount your state requires) that you don't need and that you can leave in a bank go file the bond with the state and self insure.

But most people don't have that kind of cash. So purchasing insurance is how we meet that requirement.

In California, you can buy a special type of bond that the state holds if you don't want to pay insurance. The drawback is that you need something like $45,000 to buy this bond. Thus, it is expensive to acquire, and doesn't produce any return on your money, so it's not a very good idea.

There are other options. You can self insure, but it's typically not worth it.

insurancers advertise every day to collect money, but if something really happen, they deny the claim ,only in no out, you can have your own bank accounts of $35K to set aside as your own insurance with DMV especiall when you drive less and very carefully