Financial Responsibility Laws

Definition

  • Laws that require an individual or entity to be able to pay damages if a claim is filed. Commonly used in conjunction with automotive insurance, financial responsibility laws do not necessarily require that an individual have insurance coverage, but rather that the individual has the financial means to pay a potential claim.

Synonyms
financial obligation laws, culpability laws, financial accountability laws, financial liability laws

Related Terms and Acronyms

  • Collision Insurance Definition,
    • Auto insurance that provides coverage for damages to the policyholder's vehicle in the event that the policyholder is at fault in a traffic collision.
  • Comprehensive Insurance Definition,
    • Auto insurance that covers damages not resulting from a collision, and for vehicle theft.
  • Injunction Definition,
    • A court order that prohibits a party from taking a specific course of action.
  • Self Insurance Definition,
    • Setting aside money or assets for a potential future loss.
  • Specific Performance Definition,
    • A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff.
  • Standard Automotive Insurance Definition,
    • Auto insurance that covers those with average driving records.
  • Underinsured Motorist Coverage Definition,
    • Auto insurance that covers damages when the other driver in a collision is at fault but does not have sufficient insurance coverage.
  • Uninsured Motorist Coverage Definition,
    • Auto insurance that covers collision damages caused by a driver without auto insurance.
  • Unisex Legislation Definition,
    • Laws that prevent insurers from using gender as a factor when calculating premiums.
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