Financial Responsibility

Q.  What is a financial-responsibility judgment?

A.  If someone is driving a vehicle without insurance and is at-fault in an accident, the injured party may file a suit against the uninsured motorist in court for damages. The court may award a judgment for damages to the injured party against the uninsured motorist. If the uninsured motorist cannot pay the judgment, their driver license is suspended until the judgment is paid in full.

Q.  My driver license is suspended due to a financial responsibility judgment. What can I do?

A.  You may apply for a financial-responsibility restricted driver license. This is a no-photo license that limits the holder to driving only the vehicles stated on the license. In order to receive a financial-responsibility restricted driver license, you must file a partial-payment agreement and proof of  financial-responsibility insurance with:

Michigan Department of State
Driver Record Activity Unit
formerly the Action Processing Unit
7064 Crowner Drive
Lansing, Michigan 48918-0001

The telephone number is 517-636-6406, and their fax number is 517-636-7515.

Q.  What is a partial-payment agreement?

A.  A partial-payment agreement is an agreement that is signed by the injured party and the at-fault uninsured motorist, wherein the at-fault uninsured motorist agrees to make payments toward the judgment. It states a specified amount to be paid, when it is to be paid, and to whom it is to be paid.

Q.  I am trying to set up a partial-payment agreement, but the injured party refuses to sign a partial-payment agreement with me. What can I do?

A.  The at-fault, uninsured motorist has the option of requesting the court to enter an Order Regarding Installment Payments. The at-fault, uninsured motorist may request that the court clerk file a motion requesting said action, and upon a hearing being held on the motion, the judge may enter an Order Regarding Installment Payments. A certified or attested true copy of this order from the court must be filed with the department of state at the address above.

Q.  What is financial responsibility insurance?

A.  Financial-responsibility insurance is Michigan no-fault insurance that meets the special requirements of the financial responsibility situation. There are two types of acceptable insurance:

1. Owner's, which insures any vehicle registered in the name of the responsible party.

2.  Operator's, which insures the responsible party in any vehicle not registered in the subject's name.

The subject may carry just owner's or operator's insurance or may carry both, whatever meets the subject's needs. The subject applies for the financial-responsibility insurance at an insurance agent of their choosing. The application is sent to the home office of the issuing company, and the home office supplies the State of Michigan with the necessary certificates of insurance. This process may take between two and four weeks to complete. An application for insurance is not acceptable. 

Q.  I have a financial-responsibility driver license and I want to purchase another vehicle. What do I have to do?

A.  You are responsible for applying for a new financial-responsibility insurance policy on the new vehicle. Your insurance company will supply the State of Michigan with a copy of the new insurance certificate. Once the State of Michigan has received the certificate of insurance (not the application) for the new vehicle, another financial-responsibility restricted driver license will be issued to you. Until a new driver license is issued, you are not licensed to drive the new vehicle.