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Ohio’s Financial Responsibility Law

Ohio’s financial responsibility (FR) law was enacted in October 1953. The FR law applies to owners and operators 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.

Click here for "2005 FR Suspensions by County."

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. SB 123 (effective January 1, 2004) provides that a person under suspension may file for limited driving privileges in a court of record in the residing county, 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 (point suspension details at www.bmv.ohio.gov/driver_license/12point.htm) or convicted of a serious moving violation are ineligible for occupational driving privileges. This law change was included in Am. Sub. HB 261 (effective September 3, 1997).

¹ Effective January 1, 2004 (SB 123), the requirement to maintain insurance changed to three years. A five-year requirement applies to those with violations prior to 1/1/2004.

Note: Vehicle owners who knowingly allow someone whose license is suspended to operate their vehicle may also be subject to these penalties.

Crash report filing optional

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 3303 is also available from the BMV’s Web site at www.bmv.ohio.gov/pdf_forms/3303.pdf.

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).

Letter recipients are given 21 days to respond to this first request for FR proof (letters sent via US mail to recipient’s last address filed with the BMV). Owners may submit evidence that a vehicle is exempt from FR proof if:

• Used on a seasonal basis only and FR proof date specified is out of season
• Inoperable or out of service for at least 30 days immediately prior to the FR proof date
• Exempt for another reason prescribed by the BMV

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

In 2000 the Governor appointed a study committee to research the program. Members discussed the creation of an electronic link between insurers and the BMV to check FR compliance, and conducted an evaluation of the current random verification process.

The FR study committee presented its findings to the Governor in October 2001. The committee recommended maintaining the current random verification process. Following a review of electronic reporting systems used in other states, the committee found that states using electronic reporting do so at a greater cost to taxpayers compared to Ohio’s random verification process. The committee also reported that Ohio’s current program was just as effective as the more costly electronic reporting systems used by some states to weed out those who are driving without insurance or other means of compliance. Committee members did see a need to refine Ohio’s program, especially in the situations involving seasonal or inoperable vehicles, military personnel, medical cases and sold vehicles.

For questions regarding the random verification program, contact the BMV at 614-752-7500 or at www.bmv.ohio.gov/financial_responsibility/fr_requirements.htm#Random

Source: Ohio Bureau of Motor Vehicles, Safety Responsibility Division

Source: Ohio Bureau of Motor Vehicles

Cleveland ranks the highest in the state for losses associated with uninsured motorist claims, according to the Insurance Services Office Inc. (ISO).  ISO said the companies it represents, one-third of the insurance companies doing business in Ohio, paid out $22.2 million in 2003.  Insurance companies factor in an average of $28.22 per insured vehicle in Cleveland for these losses. The average is $10.87 per insured vehicle in Akron, Toledo, Youngstown and some Cleveland suburbs. The average in Columbus, Cincinnati and Dayton is $6.87. (Cleveland Plain Dealer, 8/21/05)