Proof of Financial Responsibility

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Rachel Bodine graduated from college with a BA in English. She works as an associate editor and writer for for over a year and enjoys creating content that offers expert advice on car insurance topics.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs...

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Reviewed byLeslie Kasperowicz
Former Farmers Insurance CSR

UPDATED: Mar 13, 2020

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Financial responsibility, when it comes to auto insurance, basically refers to ability for a driver to pay for damages in the event of an accident. Different states have different laws when it comes to financial responsibility. Because of the costs that could result from an auto accident, it is very important for you to be in the bounds of the law at all times when you are behind the wheel.

In the United States, losses from auto accidents are estimated to exceed $150 billion each year. This is why we all need auto insurance. In fact, the most common way to prove financial responsibility in the US is to have auto insurance.

All states in the US have laws regarding auto insurance coverage. Most require liability coverage. Some states require medical expense coverage. Some even require uninsured/underinsured motorist coverage. Click the following link to see your state’s auto insurance coverage requirements and laws.

Other states, however, allow you to prove your financial responsibility in other ways. Some common ways they allow you do to this are:

  • Keeping a cash deposit with your state
  • Keeping a surety bond or real estate bond with your state
  • Filing a government bond with your state
Continue reading below to learn more about how you can prove financial responsibility in your state.

proving financial responsibility

Proving Financial Responsibility (By State)

Different states have different financial responsibility laws.  View the laws in your state below.  Click on the left link for auto insurance information in your state.  Click on the right link to read about your state’s financial responsibility laws.

Although there are several different ways to prove financial responsibility with your state, the best way is to go ahead and purchase a car insurance policy. Not only will a car insurance policy cover costs associated with an auto accident, it can also cover expensive legal and medical costs. To get equipped with an affordable policy, compare quotes with by filling out our form (above or below).

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