Establishing financial responsibility is a requirement that you must meet before you can even register your car. For Delaware residents, this means purchasing liability insurance.

Ways to Establish Financial Responsibility

Financial responsibility means that you have a way to pay for damages in case you’re involved in an accident. Some states allow residents to self-insure or leave a bond to satisfy financial responsibility requirements, but in Delaware you must buy automobile liability insurance to meet the financial responsibility standard.

Delaware Liability Insurance Requirements for Private Passenger Vehicles

To meet the liability insurance requirements, you must have a minimum of:

• $10,000 for property damage

• $15,000 for bodily injury or death of one person

• $30,000 for bodily injury or death of two or more people

These are the minimum amounts required. Everyone’s particular situation is different and will result in a different premium.

If you have assets to protect―for example, a home―you might want to buy more coverage so you don't lose your house in the event of a bad accident. This could happen if you cause damages that cost more than $10,000 and do not have the cash to cover it; the injured party could sue you and cause you to liquidate your assets.

If you haven’t yet bought a car, it’s always smart to get insurance quotes before you buy. Some cars have substantially higher premiums than others; you'll have to add this amount to your monthly car payment budget.

Additional types of coverage are available as well; research the different types, talk to insurance agents, and get several quotes to make a decision.

Proof of Insurance and Financial Responsibility

Once you buy insurance, the insurance company will give you a proof of insurance card. Carry this in your car and remember to switch it out for the most current edition as needed.

If you haven’t yet registered your car and you haven’t gotten your insurance card in the mail, you can take your actual policy to the Division of Motor Vehicles (DMV) in lieu of the card. Just make sure it’s not older than 30 days.

Penalties for Failure to Maintain Financial Responsibility

Driving with no proof of insurance is never a good idea. Even if you have kept up your insurance premium payments, you’ll still need to show your proof of insurance card if a peace officer pulls you over or you're involved in an accident―failure to do so will result in fines.

Getting caught with no insurance on file at all is a much more serious matter. Fines include:

• Automatic license suspension for six months.

• Fines of at least $1,500.

Additionally, if you cancel your auto insurance, the company will notify the DMV. If you are merely switching companies, ask your new insurance company for new proof of insurance (such as Form FR-19) to show the DMV that you are still covered; the DMV will only know that you canceled, and not that you got new insurance.

DMV Audits

Occasionally, the DMV conducts random checks, or audits, of people to make sure they have insurance. The DMV will notify you of an audit, at which point you'll need to get certification of insurance from your company (a Form FR-19) and provide the DMV with the form.

Ignoring the audit request will result in license and registration suspension and fines of $75 or more. Remember to notify the DMV of any changes of address that you make; otherwise, you may miss your audit notification and get fined.