What is the Definition of Compulsory Auto Insurance?

What is the Definition of Compulsory Auto Insurance?

The minimum amount of auto liability insurance that meets a state law. Financial responsibility laws in every state require all automobile drivers to show proof, after an accident, of their ability to pay damages up to the state minimum. In compulsory liability states this proof, which is usually in the form of an insurance policy, is required before you can legally drive a car.

Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/

Label: Insurance
Theme: Dictionary of Insurance Terms

Other Questions: What is the definition of Insurance?

What is the Definition of Compulsory Auto Insurance?

What is the Definition of Compulsory Auto Insurance?

Check out other definition of insurance terms below:


What is the Meaning of CHARTERED PROPERTY/ CASUALTY UNDERWRITER/CPCU In Insurance Terms?

A professional designation given by the American Institute for Chartered Property Casualty Underwriters. National examinations and three years of work experience are required.


What is the Meaning of CLAIMS MADE POLICY In Insurance Terms?

A form of insurance that pays claims presented to the insurer during the term of the policy or within a specific term after its expiration. It limits liability insurers’ exposure to unknown future liabilities. (See Occurrence policy)


What is the Meaning of COBRA In Insurance Terms?

Short for Consolidated Omnibus Budget Reconciliation Act. A federal law under which group health plans sponsored by employers with 20 or more employees must offer continuation of coverage to employees who leave their jobs and their dependents. The employee must pay the entire premium. Coverage can be extended up to 18 months. Surviving dependents can receive longer coverage.


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