BizTerm Definition
Financial Responsibility Law
Full Definition

(1) A state law under which a person involved in an automobile accident may be required to furnish security up to certain minimum dollar limits. (2) A state law which may require motorists to furnish evidence, either before or after involvement in an auto accident (depending on the individual state's law), of ability to pay for damages up to certain minimum dollar limits. These requirements commonly are met by carrying auto liability insurance with specified minimum limits or more.

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