# Financial responsibility law > What a financial responsibility law is, how states require drivers to prove they can pay for crashes they cause and how insurance meets that rule. Canonical page: https://statecover-guide.com/glossary/financial-responsibility-law/ Last reviewed: October 28, 2026 by the StateCover Guide editorial team General information, not legal or insurance advice. ## Quick answer A financial responsibility law is a state law that requires drivers and vehicle owners to show they can pay for injuries and damage they cause in a crash. Most drivers meet it by carrying at least their state's minimum liability insurance. ## How it works 49 states and the District of Columbia require drivers to buy liability insurance. New Hampshire is the exception: its laws do not require you to carry auto insurance, but after an at-fault accident you must be able to meet the state's financial responsibility requirements. If you cannot, your driving privileges may be suspended, and a court could order your assets used to pay for the damage. Financial responsibility laws are also behind proof filings. After certain violations, such as driving uninsured or a DUI, a state can require your insurer to file a certificate showing you carry the required coverage, such as an SR-22 or, in Florida and Virginia, an FR-44. Driving without the required coverage or proof can lead to license and registration penalties. Each state sets its own minimums and rules, so check your state's page or its insurance department and DMV. ## Related terms - [Liability insurance](https://statecover-guide.com/glossary/liability-insurance/) - [Proof of insurance](https://statecover-guide.com/glossary/proof-of-insurance/) - [SR-22](https://statecover-guide.com/glossary/sr-22/) - [FR-44](https://statecover-guide.com/glossary/fr-44/) - Guide: [SR-22 insurance](https://statecover-guide.com/drivers/sr-22/) ## Sources - [NAIC, Glossary of Insurance Terms](https://content.naic.org/glossary-insurance-terms) — financial responsibility law definition - [New Hampshire Insurance Department, Automobile Insurance Consumer Frequently Asked Questions](https://mm.nh.gov/files/uploads/nhid/documents/nh-auto-guide.pdf) — no insurance mandate, financial responsibility after an at-fault accident - [Insurance Research Council, Uninsured and Underinsured Motorists: 2017–2023 (press release)](https://www.businesswire.com/news/home/20250220231032/en), as of February 20, 2025