Policies and bonds issued by out-of-state insurers offered as proof of financial responsibility after a motor vehicle accident (suggested as remedial legislation by the Department of Transportation)

What it does

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

Under current law, a motor vehicle liability insurance policy or bond, offered as proof of financial responsibility to avoid the deposit of security after an accident or following entry of judgment arising from an accident, must generally be issued by an insurer authorized to do an automobile liability or surety business in this state.

However, if the vehicle involved in the accident was not registered in this state when the most recent policy or bond period commenced or the judgment is entered against a nonresident, the policy or bond covering the vehicle is acceptable proof of financial responsibility, even if it is not issued by an insurer authorized to do an automobile liability or surety business in this state, if it meets certain liability limits and the insurer that issued the policy or bond executes a power of attorney authorizing the Department of Transportation (DOT) to accept service of process in any action upon the policy or bond arising out of the accident or another accident in this state.

Who's behind it

Law Revision Committee is its author⁠.