Certificate of Financial Responsibility (COFR) 2024
What is proof of financial responsibility? Proof of financial responsibility guarantees that a driver can afford to cover the expenses associated with an auto accident. Carrying your state’s minimum auto insurance requirements acts as evidence of financial responsibility. In some states, a cash deposit, surety bond, or a government bond also suffices. To see the financial responsibility requirements or coverage minimums in your state, check out our list below.
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Brandon Frady
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Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...
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UPDATED: Nov 4, 2024
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Nov 4, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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When it comes to auto insurance, proof of financial responsibility refers to the ability of a driver to pay for damages in the event of an accident the driver is found liable for. Different states have different financial responsibility law requirements.
In the United States, losses from auto accidents are estimated to exceed $150 billion each year. Without insurance, most drivers would fall into bankruptcy or financial hardship after a major vehicle accident. This is why the most common way to prove financial responsibility in the U.S. is to carry your state’s legal minimum auto insurance requirements.
Because of the costs that could result from an auto accident, understanding auto insurance requirements and laws in your state is extremely important. Read through our complete guide to learn the auto insurance requirements by state and how you can legally comply with the financial responsibility law requirements.
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What is proof of financial responsibility?
What is proof of financial responsibility? Financial responsibility means you are able to pay for any damages you are liable for should you ever cause an accident. It is a form of financial obligation that is required to show that you can cover associated costs of a car accident.
Think about it. If you hit another vehicle, do you have the funds available to pay for the damages and medical expenses for the other driver? Not to mention you also must pay to fix your own vehicle, and any medical needs you or your passengers might have.
Without auto insurance, most Americans would struggle to financially survive a major car accident. To prevent citizens from falling into bankruptcy or financial hardship from an accident, states require all drivers to prove a certain level of financial responsibility in order to legally drive on the roads. Even if you have a clean driving record you still have a financial obligation to meet financial responsibility requirements.
In most states, you can meet the financial responsibility requirements by carrying a certain level of liability auto insurance, known as a basic auto insurance policy. In other states, you can keep a cash deposit, a surety bond or real estate bond, or even file a government bond with your state to act as evidence of financial responsibility.
What is financial responsibility insurance? Find the level of auto insurance you legally need to carry in your state to prove financial responsibility in the table below.
Minimum Legal Auto Insurance Requirements by State
State | Minimum BI & PD Liability Limits | Required Insurance Policies |
---|---|---|
Alabama | 25/50/25 | BI + PD Liability |
Alaska | 50/100/25 | BI + PD Liability |
Arizona | 15/30/10 | BI + PD Liability |
Arkansas | 25/50/25 | BI + PD Liability, PIP |
California | 15/30/5 | BI + PD Liability |
Colorado | 25/50/15 | BI + PD Liability |
Connecticut | 25/50/20 | BI + PD Liability, UM, UIM |
Delaware | 25/50/10 | BI + PD Liability, PIP |
District of Columbia | 25/50/10 | BI + PD Liability, UM |
Florida | 10/20/10 | BI + PD Liability, PIP |
Georgia | 25/50/25 | BI + PD Liability |
Hawaii | 20/40/10 | BI + PD Liability, PIP |
Idaho | 25/50/15 | BI + PD Liability |
Illinois | 25/50/20 | BI + PD Liability, UM, UIM |
Indiana | 25/50/25 | BI + PD Liability |
Iowa | 20/40/15 | BI + PD Liability |
Kansas | 25/50/25 | BI + PD Liability, PIP |
Kentucky | 25/50/25 | BI + PD Liability, PIP, UM, UIM |
Louisiana | 15/30/25 | BI + PD Liability |
Maine | 50/100/25 | BI + PD Liability, UM, UIM, Medpay |
Maryland | 30/60/15 | BI + PD Liability, PIP, UM, UIM |
Massachusetts | 20/40/5 | BI + PD Liability, PIP |
Michigan | 20/40/10 | BI + PD Liability, PIP |
Minnesota | 30/60/10 | BI + PD Liability, PIP, UM, UIM |
Mississippi | 25/50/25 | BI + PD Liability |
Missouri | 25/50/25 | BI + PD Liability, UM |
Montana | 25/50/20 | BI + PD Liability |
Nebraska | 25/50/25 | BI + PD Liability, UM, UIM |
Nevada | 25/50/20 | BI + PD Liability |
New Hampshire | 25/50/25 | Financial Responsibility only |
New Jersey | 15/30/5 | BI + PD Liability, PIP, UM, UIM |
New Mexico | 25/50/10 | BI + PD Liability |
New York | 25/50/10 | BI + PD Liability, PIP, UM, UIM |
North Carolina | 30/60/25 | BI + PD Liability, UM, UIM |
North Dakota | 25/50/25 | BI + PD Liability, PIP, UM, UIM |
Ohio | 25/50/25 | BI + PD Liability |
Oklahoma | 25/50/25 | BI + PD Liability |
Oregon | 25/50/20 | BI + PD Liability, PIP, UM, UIM |
Pennsylvania | 15/30/5 | BI + PD Liability, PIP |
Rhode Island | 25/50/25 | BI + PD Liability |
South Carolina | 25/50/25 | BI + PD Liability, UM, UIM |
South Dakota | 25/50/25 | BI + PD Liability, UM, UIM |
Tennessee | 25/50/15 | BI + PD Liability |
Texas | 30/60/25 | BI + PD Liability, PIP |
Utah | 25/65/15 | BI + PD Liability, PIP |
Vermont | 25/50/10 | BI & PD Liab, UM, UIM |
Virginia | 25/50/20 | BI + PD Liability, UM, UIM |
Washington | 25/50/10 | BI + PD Liability |
West Virginia | 25/50/25 | BI + PD Liability, UM, UIM |
Wisconsin | 25/50/10 | BI + PD Liability, UM, Medpay |
Wyoming | 25/50/20 | BI + PD Liability |
As you can see, most states require drivers to carry some form of liability coverage. But some states also require medical expense coverage, and some even require uninsured/underinsured motorist coverage.
Of course, not every driver on the road chooses to follow the law. According to the Insurance Information Institute, despite financial responsibility laws existing in all 50 U.S. states, as many as 13 percent of drivers on the road are still uninsured.
The top three states with the most uninsured motorists are Florida, Mississippi, and New Mexico. The three states with the least amount of uninsured motorists are Maine, New York, and Massachusetts.
To combat the economic hardships associated with getting hit by an uninsured motorist, some states require drivers to purchase uninsured or underinsured motorist coverage. This type of policy will help cover damages to you and your property that an at-fault, uninsured driver cannot pay for.
Can proof of financial responsibility replace auto insurance?
In most states, auto insurance will act as your proof of financial responsibility. However, in a few rare states, you can hold a surety bond, cash deposit, estate bond, or even a government bond with your state to act as financial responsibility evidence.
For example, in the state of Virginia, you can pay an uninsured motorist fee and forgo car insurance coverage. In California, you can take out a bond for $35,000 to use as a replacement for an auto insurance policy.
However, watch the following video from eHowFinance to learn why it is easier to just purchase a basic auto insurance policy than it is to take out a bond, even if you live in California.
As you can see, purchasing a bond in California might seem like a good way to forgo auto insurance fees, but in reality, it could end up costing you more than if you simply bought a basic policy in the first place.
Another car insurance exception is the state of New Hampshire. If you live in New Hampshire, auto insurance is not legally required at all. However, you must deposit money or other securities with the New Hampshire state treasury if you choose to not purchase an insurance policy.
You will still be held financially responsible for damages if you cause an accident in any of the states that allow alternatives to auto insurance unless you live in a no-fault state. In a no-fault state, you’re responsible for damages regardless of who is at fault.
How to Prove Financial Responsibility in Your State
Carrying an auto insurance policy is just one way to prove that you are financially capable of paying for damages caused by an accident you are found at fault for. Some states allow you to keep a minimum amount of money in a surety bond with your state or DMV to use for damages in the event you cause a car accident.
Remember, proof of financial responsibility in Texas may be different from proof of financial responsibility in California, so always be aware of your state auto insurance requirements to avoid any major issues. This is especially true for folks moving to a new state.
Some other common ways states allow you to prove financial responsibility are by:
- Keeping a cash deposit with your state.
- Keeping a surety bond or real estate bond with your state.
- Filing a government bond with your state.
You can find forms for showing your proof of financial responsibility at the DMV.
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When are you required to provide proof of financial responsibility?
Almost anytime an authority figure asks for your auto insurance information, they are looking to verify your proof of financial responsibility.
Therefore, you will be required to provide proof of financial responsibility whenever you are pulled over for a traffic violation or if you are ever involved in a car accident or moving violation.
If you fail to provide proper proof, you can face fines of anywhere between $500 to $5,000, your license and registration may be revoked, and depending on the state, you could face potential jail time.
All around, it’s easier and safer to simply carry your state’s most basic auto insurance requirements rather than risk getting caught without valid proof of financial responsibility.
Depending on your budget and what company you use, you can build a customized auto insurance policy to meet your needs. Consider adding comprehensive or collision insurance, roadside assistance programs, or even additional medical protections.
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Proof of Financial Responsibility and SR-22 or FR-44 Certificates
In some states, you may be required to fill out an SR-22 certificate, an FR-44 certificate, or both, as a means of proving financial responsibility to your state’s DMV. These certificates primarily allow you to register or re-register your vehicle after you’ve committed some type of violation. (For more information, read our “Affordable FR-44 Auto Insurance“).
When it comes to an SR-22 form, what is it and why do you need it? An SR-22 certificate is forwarded to your state’s DMV in real-time when you sign up for an auto insurance policy that meets or exceeds your state’s minimum legal requirements. FR-44 certificates, on the other hand, are most often required after committing an alcohol or other substance-related OUI in either Florida or Virginia.
Remember, these forms are not auto insurance policies, but are instead from your insurance company guaranteeing that you are carrying a policy that meets your state’s minimum requirements.
Frequently Asked Questions
What is a Certificate of Financial Responsibility (CFR)?
A Certificate of Financial Responsibility (CFR), also known as an SR-22, is a document that verifies a driver’s ability to meet the minimum liability insurance requirements set by their state’s motor vehicle department or regulatory authority.
When is a Certificate of Financial Responsibility required?
A Certificate of Financial Responsibility is typically required in situations where a driver has been involved in certain traffic violations or has had their license suspended or revoked. It is often mandated as a condition for reinstating a suspended or revoked driver’s license.
What does a Certificate of Financial Responsibility show?
A Certificate of Financial Responsibility demonstrates that a driver has obtained the minimum amount of liability insurance coverage required by their state. It shows proof that the driver is financially responsible and can cover the costs associated with potential accidents or damages caused by their vehicle.
How can I obtain a Certificate of Financial Responsibility?
To obtain a Certificate of Financial Responsibility, you must contact an insurance company authorized to issue these certificates in your state. You will need to purchase an auto insurance policy that meets the minimum liability insurance requirements set by your state. The insurance company will then file the necessary paperwork, including the CFR, on your behalf.
How long do I need to maintain a Certificate of Financial Responsibility?
The duration for which you need to maintain a Certificate of Financial Responsibility varies depending on the requirements of your state and the reason for needing the certificate. In most cases, it is required for a specified period, such as three years, but this can vary.
What type of insurance coverage can satisfy financial responsibility requirements?
Financial responsibility can typically be satisfied by having auto insurance coverage that meets or exceeds the minimum requirements set by your state.
How long must you provide proof of financial responsibility?
The duration for which you must provide proof of financial responsibility varies by state and the circumstances of the violation that led to the requirement. It can range from several years to indefinitely.
What does proof of financial responsibility mean?
Proof of financial responsibility demonstrates that a driver is capable of covering the costs associated with damages or injuries resulting from auto accidents they may cause.
What is the financial responsibility unit of the DMV?
The financial responsibility section of the DMV, or Department of Motor Vehicles, is the government agency responsible for enforcing laws related to vehicle registration, and driver licensing, and ensuring that drivers meet the financial responsibility requirements in their state.
What is proof of financial responsibility for the DMV?
Proof of financial responsibility for the DMV refers to the documentation or evidence provided by drivers to demonstrate their ability to cover costs associated with potential accidents, as required by state law.
What does failing to maintain financial responsibility mean?
Failing to maintain financial responsibility means that a driver does not have the necessary insurance or other means to cover damages or injuries resulting from accidents they may cause, violating state laws.
What is a certificate of financial responsibility?
A certificate of financial responsibility, also known as an SR-22 or FR-44 certificate in some states, is a document provided by an insurance company to verify that a driver has obtained the minimum required auto insurance coverage.
What is a financial responsibility filing?
A financial responsibility filing is a documentation process by which an insurance company submits proof of a driver’s insurance coverage directly to the state’s Department of Motor Vehicles.
What is a financial responsibility form?
A financial responsibility form is a document used to provide proof of a driver’s ability to cover the costs associated with potential accidents, typically through auto insurance coverage.
What is proof of financial responsibility?
Proof of financial responsibility refers to any documentation or evidence that demonstrates a driver’s ability to cover the costs of damages or injuries resulting from an auto accident they may cause.
What is evidence of financial responsibility?
Evidence of financial responsibility is any form of documentation or proof that shows a driver’s ability to meet the financial obligations associated with owning and operating a vehicle.
What is failure to maintain financial responsibility?
Failure to maintain financial responsibility occurs when a driver does not have the required insurance or other means to cover damages or injuries resulting from accidents they may cause, leading to legal consequences.
What is failure to provide proof of financial responsibility?
Failure to provide proof of financial responsibility happens when a driver is unable to present the required documentation or evidence of their ability to cover the costs associated with potential accidents, resulting in legal penalties.
When are the three times you must provide proof of financial responsibility?
The three times you must provide proof of financial responsibility are typically during a traffic stop, after an accident, or when requested by the Department of Motor Vehicles (DMV) for various reasons such as license renewal or vehicle registration.
When are you required to show proof of financial responsibility?
When must a driver show proof of financial responsibility? You are required to show proof of financial responsibility whenever requested by law enforcement during a traffic stop, after being involved in an accident, or during interactions with the Department of Motor Vehicles for purposes like license renewal or vehicle registration.
Where should you keep proof of financial responsibility?
You should keep proof of financial responsibility, such as your insurance card or other relevant documentation, readily accessible in your vehicle at all times to present when requested by law enforcement or the DMV.
Who is required to have insurance or other proof of financial responsibility?
All drivers and vehicle owners must typically have insurance or other proof of financial responsibility to cover damages or injuries resulting from accidents they may cause while operating a vehicle.
Why is financial responsibility important?
Financial responsibility is important because it ensures drivers can cover the costs associated with potential accidents, protecting themselves and others from financial hardship and legal consequences.
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Brandon Frady
Licensed Insurance Agent
Brandon Frady has been a licensed insurance agent and insurance office manager since 2018. He has experience in ventures from retail to finance, working positions from cashier to management, but it wasn’t until Brandon started working in the insurance industry that he truly felt at home in his career. In his day-to-day interactions, he aims to live out his business philosophy in how he treats hi...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.