It is illegal in all states to drive a vehicle without sufficient financial responsibility; most states specifically require proof of insurance. While there is no uniform insurance law, there is a uniform law of financial responsibility. That is, while not all states require drivers to have automobile insurance, all do require some proof of financial responsibility should they be involved in an accident (or convicted of a traffic violation). Drivers must carry proof that they have the financial ability to pay for damages, up to an established amount. Insurance is required in most states, and in states that do not require it, insurance is the most common way of dealing with a financial responsibility law. The other legal proofs of financial responsibility (in states that do not require insurance) include:
- Certification of self-insurance
- Certificates of deposit
- Surety bonds
Most states view driving an uninsured vehicle (or without sufficient financial responsibility) as a different violation than driving a legally insured vehicle without the proof that it is insured. Penalties for driving an uninsured vehicle can vary, depending on the state, from a simple fine to the suspension of the driver’s license. Because of this, it is strongly advised that you know the insurance laws of your jurisdiction.