Ohio's Financial Responsibility Law
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Ohio's Financial Responsibility Law
- Ohio's Comparative Negligence Law
- Child Safety Restraint Laws
- Ohio's Safety Belt Law
- Auto and Homeowners Insurance Cancellation Laws
- Speed Limit Laws
- Ohio's Point System for Traffic Violations
- Graduated Licensing Law
- Ohio's Inspection Law for Salvage and Self-Assembled Vehicles
- Banking Issues/Privacy Provisions of Gramm-Leach-Bliley
- The McCarran-Ferguson Act: Regulating the Industry
Chapter 7
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Ohio’s financial responsibility (FR) law was enacted in October, 1953. The FR law applies to owners of Ohio registered vehicles, motorists leasing vehicles from licensed dealers and those applying for any type of drivers license, including a probationary license. The law states that “no person shall operate or permit the operation of a motor vehicle unless proof of financial responsibility is maintained with respect to that vehicle, or in the case of a driver who is not the owner, with respect to his or her operation of that vehicle.”

The purpose of the FR law is to assure compensation to victims when injuries or damages are sustained in a crash. Under Ohio’s FR law, motorists are required to sign a separate form acknowledging financial responsibility upon application for a new or renewed drivers license and when vehicle license plates are purchased or renewed.

Financial responsibility requirements

There are several ways a motorist can meet FR law requirements. Only one of the following proofs of financial responsibility must be maintained:

  • An auto liability insurance policy. Motorists choosing to comply through insurance will receive ID cards from their insurance company that indicate FR requirements have been met.
  • A surety bond of $30,000 issued by an authorized surety or insurance company
  • A certificate issued by the Ohio Bureau of Motor Vehicles (BMV) indicating that money or government bonds in the amount of $30,000 is on deposit with the Treasurer of the State
  • A certificate issued by the BMV showing a bond secured by real estate having equity of at least $60,000
  • A certificate of self-insurance issued by the BMV, available to those with more than 25 vehicles registered in their name or a company’s name

FR proof requirements

Proof of FR is required for motorists:

  • Involved in a violation requiring a court appearance
  • Involved in a crash causing injury, death or more than $400 in property damage and you choose to file a Motor Vehicle Crash Report with the BMV
  • Upon request by law enforcement when stopped for a traffic violation, a vehicle safety inspection or involvement in a traffic crash
  • When contacted by mail through the BMV’s random FR verification process

One method of proving FR is by showing an “auto insurance identification” card. ID cards are provided by insurers upon issuance or renewal of an auto insurance policy. The card should be kept with the insured vehicle so it will be readily available upon request.

Ways to prove FR

When law enforcement officers request FR proof and motorists don’t have it available, they are given a notice explaining the options to provide such proof. The options include:

  • Sending a copy when paying the fine
  • Bringing FR proof when appearing in traffic court
  • Sending FR proof when requested by the BMV

Failure to comply initiates the BMV’s suspension process.

FR satisfaction via insurance

If a person satisfies the law by carrying insurance, the minimum liability limits allowable by law are: bodily injury liability, $12,500 per person and $25,000 per accident; and property damage liability, $7,500 per accident.

Since some irresponsible drivers may choose to ignore the FR law, the inclusion of Uninsured and Underinsured Motorists (UM/UIM) auto insurance coverages should be considered. UM/UIM coverages provide protection for injuries caused by out-of-state drivers, at-fault uninsured motorists, hit-and-run drivers and at-fault drivers whose policy limits are insufficient to cover losses.

Violator penalties

Penalties are listed in the chart below. Since September, 1997, first-time FR law violators are given occupational driving privileges after serving 30 days of the 90-day license suspension period, as long as they have obtained FR compliance and paid reinstatement fees. First-time offenders accruing 12 points under Ohio’s point system for traffic violations or convicted of a serious moving violation are ineligible for occupational driving privileges. This law change was included in Am. Sub. HB 261.

Report filing optional for crash victims

Drivers involved in a motor vehicle crash resulting in bodily injury, death or causing more than $400 in property damage should consider filing a Motor Vehicle Crash Report with the BMV, FR Division, if they suspect that the others involved in the crash were uninsured.

This report is different from reports taken by law enforcement officials at the accident scene. This optional filing process can be done within six months of the crash date. Once filed, the report provides the BMV with necessary information to contact the alleged driver(s) for FR proof. If proof cannot be provided, the license suspension process begins. Ohio Motor Vehicle Crash Report forms are available from Ohio Highway Patrol posts, insurance agents or companies, other law enforcement agencies or the Ohio Insurance Institute. Form 3135 is also available from the BMV’s website at www.state.oh.us/odps/division/bmv/frm_dnld.html.

FR Task Force update

The Task Force on the Enforcement of the Financial Responsibility Laws of Ohio released its final report to the Governor during 1998. The task force was organized to review the effectiveness of Ohio’s FR law and to make future recommendations. The task force reported that, in general, Ohio’s FR laws are working as intended and accomplished the goals set out in the original legislation. Modifications in the law based on the task force’s review included a simplification in the insurance verification process, the creation of a better system for monitoring compliance, and working with law enforcement to improve its efforts in confirming compliance during routine stops for vehicle traffic violations.

The law passed in 1995 called for the formation of this task force to seek ways to verify FR compliance, which is where the FR random verification program got its start. The pilot program began on December 7, 1998.

Random verification program

This process includes mailing letters to a random selection (5%) of registered Ohio vehicle and noncommercial truck owners—about 5,400 notices per week (280,000 notices each year).

Recipients of letters are given 21 days to respond to this first request for FR proof. The BMV then allows up to 10 days before the first “Notice of Suspension” is mailed. This “Notice” allows a 60-day grace period in which the individual may still provide FR proof prior to the suspension taking effect.

A second “Notice of Suspension” is sent via certified mail 42 days before the start of the suspension. This is to ensure that the BMV has the proper mailing address for the registered vehicle owner. Considering this, there is actually a three-month period for an individual to prove FR compliance prior to being placed under suspension.

For answers to questions regarding the random verification program, contact the FR hotline at 1-800-636-9825.

Recent random verification action

Questions and concerns have been raised regarding the process and cost of the FR random verification program. Some concerns centered around the inconvenience of completing the verification form and paying for its return postage.

A study committee was appointed by the Governor in late 2000 to research the program. ODPS has suggested this committee may discuss the creation of an electronic link between insurers and the BMV to check FR compliance, and an evaluation of the current random verification process. This committee is required to report its findings back to the General Assembly by September 2001.

According to Mothers Against Drunk Driving (MADD), a driver at .08 BAC is 11 times more likely to be involved in a fatal crash than a sober driver.