Car Insurance
Auto Insurance Financial Responsiblity Law?
When referring to auto insurance, financial responsibility is the ability of a driver to pay for any damages when involved in an accident. The law related to financial responsibility is that no driver in any state can operate a vehicle without proving financial responsibility. There are different ways to prove financial responsibility so that a driver may operate his/her vehicle. Each state has their own requirements as to what is an acceptable proof of financial responsibility.
Financial responsibility is necessary for all drivers. By accepting financial responsibility as a driver, you are agreeing to pay for any accidental damages you cause to another person’s body or property. State law requires this for protection to each driver. Although you may be secure in your own ability to drive carefully, you cannot predict the actions of others.
The most and easiest popular method of obtaining and proving financial responsibility is by purchasing an auto insurance policy. There are many auto insurance companies around the country that are willing to provide insurance to drivers. These drivers are charged premiums based on the kind of car they will be driving, where they live, and their driving history. This method can also be referred to as a motorist liability insurance policy.
If you do not have auto insurance and find that this method will be the easiest way to show your financial responsibility, we can help you find an auto insurance company that will provide their services. Simply type in your zip code and give us the required information, and we will in turn provide you with quotes from these companies. You can review the quotes at your leisure without any obligation to purchase a policy and without any fees to even obtain the quotes. It is an easy way for drivers to compare auto insurance companies without having to directly contact the companies themselves.
A surety bond is another form of financial responsibility that is accepted by some states. A surety bond is a three-party contract. The surety, or a specific person, agrees to be held responsible for any financial damage incurred by the driver to another person who has been injured or experienced property damage. This bond is in the required amount by the state in which the driver resides. It must be issued by an authorized surety or an insurance company.
A state Motor Vehicle Department bond held by real estate equity of a set amount is applicable to financial responsibility in some states. This equity money can be used to pay for damages incurred in an accident.
There are 2 certificates that could be accepted by your state, the first is namely a state Motor Vehicle Department certificate for money or government bonds. This certificate is regarding a set amount of money required by the state that is on deposit with the State Treasurer. Another certificate that might be allowed by the state is a certificate of proof of financial responsibility that has been signed by an insurance agent. This certificate is part of a form that is given by your state’s Motor Vehicle Department.
The third certificate of bond is one that is issued by the state’s Motor Vehicle Department and is in a set amount, which can be covered by two separate people.
The examples are types of bonds that can be used to show proof of financial responsibility; only one is usually required. Most states require to show this proof of financial responsibility upon registration of a vehicle or to obtain or renew a driver’s license. The driver must show that either they have maintained financial responsibility in the past or that they currently hold financial responsibility. The driver must not operate a vehicle without such proof of financial responsibility, as doing so is breaking the law.
When you will need to show proof of financial responsibility, such as when involved in an accident or when stopped by a police officer. Failure to show an insurance card or certificate of bond because you do not have one will result in heavy penalties. These penalties can include fines, suspension of a driver’s license or vehicle registration, or even jail time. When you receive your proof of financial responsibility, it is best to keep it in the vehicle so it readily available in the event you need to show it to a police officer. In some states, your vehicle can be randomly selected to check whether or not you are presently holding financial responsibility.
There could be a situation where a driver would need an SR-22, another type of proof of financial responsibility. This form is designated for high risk drivers, or those drivers who have been convicted of driving under the influence or have been involved in a large number of automobile accidents or traffic tickets. They are considered high risk because there is a “high risk” that these drivers will be filing a claim with their insurance company to pay for any damages for reckless driving. These drivers pay substantially more than a driver who is cautious and is considered to be a low risk.
An SR-22 is a type of proof that you have insurance. This form is filed by your auto insurance company to your state’s Motor Vehicle Department that will state your auto insurance is in effect. It is typically issued to a driver who was previously unable to show proof of financial responsibility, and is used as an extra way to make sure the driver now holds financial responsibility.
To avoid any legal action taken against you as a driver, always have and carry proof of financial responsibility. No matter what sate you live in, there are options for every driver to maintain financial responsibility. If you have the assets available and are financially sound enough to not carry auto insurance, look there. However, it may be more beneficial and less of a risk to look into using an auto insurance company to see what they can do for you as a policyholder.
