Financial Responsibility Law

A law which requires an individual to prove that he or she is able to pay for damages resulting from an accident. A financial responsibility law does not specifically require the individual to have insurance coverage; instead, the law requires the individual to be able to demonstrate the financial capacity to pay, even if the individual is not at fault. This type of law is commonly associated with automobiles.

Financial responsibility laws exist because not all states have a compulsory insurance law. However, many states consider an individual with an insurance policy to be compliant with a financial responsibility law, since most insurance policies have a minimum coverage that meets the state standard.


Investment dictionary. . 2012.

Look at other dictionaries:

  • financial responsibility law — n: a law that requires a driver involved in an accident to provide proof of the ability to pay a judgment obtained against him or her Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • financial responsibility acts — State statutes that require owners of motor vehicles to produce proof of financial accountability as a condition to acquiring a license and registration so that judgments rendered against them arising out of the operation of the vehicles may be… …   Law dictionary

  • financial responsibility — Term commonly used in connection with motor vehicle insurance equivalents. See also financial responsibility acts …   Black's law dictionary

  • financial responsibility clause — Provision in automobile insurance policy stating that the insured has at least the minimum amount of coverage required by state financial responsibility laws …   Black's law dictionary

  • Financial Security Law of France — The Financial Security Law of France (known in France as LSF or Loi de sécurité financière), signed by the Minister of Finance, Francis Mer, was adopted by the French Parliament on July 17, 2003 in order to strengthen the legal provisions… …   Wikipedia

  • financial responsibility acts — State statutes which require owners of motor vehicles to produce proof of financial accountability as a condition to acquiring a license and registration so that judgments rendered against them arising out of the operation of the vehicles may be… …   Black's law dictionary

  • personal financial responsibility counseling — A class intended to teach budgeting and debt management skills to those who have filed for bankruptcy. Under the 2005 bankruptcy law, someone who files for bankruptcy must get personal financial responsibility counseling before he or she can… …   Law dictionary

  • financial — fi·nan·cial adj: relating to finance or financiers fi·nan·cial·ly adv Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. financial …   Law dictionary

  • Financial Accounting Standards Board — Independent board with responsibility to establish and interpret Generally Accepted Accounting Principles …   Black's law dictionary

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