just fyi... when a cop runs your plate, if it's a car/truck/suv etc. it will tell them the status of your insurance. when they run a moped, this information is not on there.
cvc 16028(A) requires that every person that drives a motor vehicle upon a highway is required to provide evidence of financial responsibility to a police officer or traffic collision investigator upon demand.
a moped is defined as a motor vehicle in california. you NEED insurance here.
keep in mind that in the motorcycle handbook that everyone refers to, on page 1 or 2 has a disclaimer saying that it is NOT the law, and that the california vehicle code supersedes anything written in there. a lenient judge might let you slide if you provide that and cite confusion, however... it's only going to work once at the most.
as far as majtom's scenario, i wonder if the dmv fucked up and registered it as a motorcycle? i can't see how they could expect you to insure a vehicle that you are no longer using. what if you kept the bike, but were just no longer using it? it's not like a car.... there is no provision for a planned non-operation. i'd call the dmv and explain the situation.
when calling dmv, i'd cite the following vehicle code:
cvc 4020 - a motorized bicycle operated upon a highway is exempt from registration.
remember... the dmv is nothing more than a fee collecting agency. they do not do anything to provide any type of service for anyone, all that they are there for is collecting registration fees, processing fees, and their cut of parking and traffic citations. all they see is green.