Some states do not require an individual to demonstrate the ability to pay an automobile liability claim until after the individual has been involved in an accident or has been convicted for certain offenses,such as driving under the influence of alcohol.This approach to dealing with compensating innocent auto accident victims is called a(n)
A)unsatisfied judgement fund.
B)financial responsibility law.
C)uninsured motorist law.
D)compulsory insurance law.

Question

Quizplus · Accepted Answer

The approach of requiring an individual to demonstrate the ability to pay an automobile liability claim after being involved in an accident or convicted of certain offenses is known as a financial responsibility law. This law aims to ensure that innocent auto accident victims are compensated for their losses. Option A, unsatisfied judgement fund, refers to a fund established in some states to provide compensation to those with unsatisfied court judgments against uninsured motorists. Option C, uninsured motorist law, requires insurance companies to offer uninsured motorist coverage as an option to policyholders. Option D, compulsory insurance law, mandates that all drivers carry a minimum amount of liability insurance coverage. None of these options accurately describes the approach described in the question.

Some States Do Not Require an Individual to Demonstrate the Ability