Did not have correct insurance

Matthew, I'm sorry for your bad experience.  I'm wondering if you purchased your insurance through an agent, online, or over the phone.  Normally, you get a price for each piece of the insurance coverages you are purchasing, such as $350 for collision, $150 for comprehensive, $500 for liability, etc., so you know exactly what you are buying, how much of each and what you're deductibles are.  If the insurer or their representative told you that you were getting "full coverage", i.e., liability, med pay, collision, comprehensive, etc., and only liability was included in the policy, you could possibly have a case against the representative, but here is why it would be a weak case.  You would have gotten a "Dec Sheet" which shows what coverages you have and how much you're paying for each, and you are responsible for reading it and understanding what you bought.  If you got less than you asked for or are paying for more than you actually got, you would have noted that and contacted the insurer right away, right?    The only time you don't have, what you refer to as "correct insurance" is when you don't carry the minimum level of liability coverage that meets your state's requirements.  All other coverages are optional. I think you're going to have to deal with this one on your own.  And if you want to add collision or any other coverage to your policy, contact your insurer and do so and you'll be covered in the future.

You should talk to a California attorney about this, and one who practices personal injury law for auto accidents should be able to give you detailed advice.  One place to find that attorney is our website, http://attorneypages.com

I very much doubt that your insurance policy was not at least the minimum required by state law, so the DMV doesn't care.  It's a very slight surprise, that the bank did not notice that you didn't have collision and comprehensive coverage, but they had no duty to notice it and tell you, since they required full coverage to protect your car as their collateral on the loan, not as your transportation.

If there is anyone who you might be able to hold responsible for this, it would be whoever sold you the insurance policy in the first place.  Whether you can get anywhere with that depends on a number of things, and it can be tricky -- which is why I'm telling you to talk to a lawyer!