The state requires you to carry an acceptable amount of vehicle liability insurance if you own a car. Accidents are common, and too often lead to enormous bills, and sometimes even lawsuits.

That's why the Department of Motor Vehicles (DMV) demands car owners prove they're financially responsible enough to take care of the possible costs involved.

Ways to Establish Financial Responsibility

While some states give a variety of choices when it comes to addressing financial responsibility matters, you only have one option: having bodily injury and property damage liability insurance that meets the state's minimum requirements.

Connecticut Liability Insurance Requirements for Private Passenger Vehicles

You must have at least the following types and levels of insurance coverage to comply with the mandatory requirements:

• $20,000 bodily injury coverage for injuries or a death occurring to one person in an accident.

• $40,000 bodily injury coverage for injuries or deaths occurring to more than one person in an accident.

• $10,000 property damage coverage for an accident.

This represents the minimum coverage that's required. Most insurance professionals advise having much more protection than this. Learn why by visiting our Types of Coverage section, where you can also develop a better understanding of the sorts of protection available.

Of course, extra protection costs more money. But, you can easily try to contain your expenses by comparison shopping online for the best rates and coverages available. Or, just call the toll-free phone numbers provided by insurance companies to obtain the information you need.

Proof of Insurance and Financial Responsibility

If you let your policy lapse or cancel your insurance, your carrier will notify the DMV.

Despite this, there are still occasions when you'll be asked to show your proof of insurance, and you may legally do so by presenting your:

• Insurance identification card.

• Policy's declaration page.

Remember to keep your proof of insurance in the vehicle.

Penalties for Failure to Maintain Financial Responsibility

What if you have no proof of insurance, and your insurance company reports your lack of coverage to the DMV?

You'll receive a warning notice from the state, detailing what you need to do to be in compliance with the law. Basically, though, if you respond promptly, obtain the proper coverage, complete the consent agreement, and pay a $200 penalty, you'll be fine.

Failing to respond to the letter within 30 days, however, means you'll receive a suspension notice, and a hearing may be requested. Depending on the outcome of the hearing, your registration could be suspended, and then you won't be able to renew the registration of any vehicle, or even register another car.

To reinstate your registration, you must show that you now have acceptable liability coverage, and pay at least $200 in fines.