A
"financial responsibility" law requires you to prove your
financial ability to pay for damages at the time you are involved in
an accident or are convicted of a traffic violation. This type of law does
not require that you have insurance or other proof of financial responsibility
at the time of vehicle registration. However, failure to demonstrate the required
level of financial responsibility at the time of an accident or traffic
violation can result in suspension of your driver's license or revocation of your
vehicle registration. Under these laws, the requirement to demonstrate financial
responsibility is not based on fault. All parties involved in an accident must
show the necessary proof or face the penalties imposed by the law. Maintaining
an automobile insurance policy is the most common way to comply
with a financial responsibility law.
