-3- 



Under certain circumstances, farmers may also be held liable for the negli- 

 gence of others vfhom they permit to drive. In general, the liability of an owner 

 is extended to cover the liability of any person Vfho is legally using the auto- 

 mobile with the permission of the ovmere 



Automobile Kesponsibility Laws 



All states have motor vehicle safety and financial responsibility la\Ts, These 

 lav;s were passed to reduce traffic accidents by controlling irresponsible drivers. 

 Under these lav/s, the driving permits and registration plates of financially ii-re- 

 sponsible drivers may be withdravm under certain conditions. 



Ordinarily the most satisfactory way to satisfy the financial responsibility 

 law is to secure automobile liability insurance, 



In most states, the financial responsibility lavrs require security of ',,-5*000 

 for injuries or death to one person and 010,000 for injuries or death of two or 

 more persons with a limit of <i?^fOQO for any one person. The requirement for pro- 

 perty damage is frequently $5,000, These security requirements are knovm as 5/10/5 

 limits. Several states have increased their requirements for injuries or death 

 to SlO,000 and 020,000 respectively, A few states have set their requirements for 

 property damage at a minimum of :,p2,000 and others to ■;p5>000« The 12 states that 

 require higher amounts of security than 5/lO/2 are Connecticut, Liaine, Vermont, 

 New York, Maryland, Mnnesota, Mississippi, J/Iissouri, Ohio, South Dakota, Texas, 

 and Vfisoonsin, 



Che of the more important advantages of using insurance to prove financial 

 responsibility is that payments are guaranteed v^hen loss or damage covered by a 

 policy occurs. Usually the company is not relieved of its obligation under the 

 policy, even if an agreement is reached between Policyholder and claimant or if 

 the insured becomes bankrupt. The intent of the law is to make sure that the 

 innocent injured victim is compensated. But it should be remembered that the right 

 of states to legislate is limited to their 'highways. For example in fessachusetts 

 legislation is limited to "the accepted ways of the Commonvrealth" , 



Coverage 



A company issuing a standard automobile liability policy agrees to pay up to 

 the limits of the policy such claims as the insured may become obligated to pay 

 because of liability imposed upon him by law. In addition, if a case goes to 

 court, the insurance company furnishes the lawyer and pays all court costs. Lia- 

 bility must be clearly recognized or proved before the company is obligated to 

 pay,- If the insured motorist is found \7ithout fault in an accident, there can be 

 no liability against him or his company, but any claim or suit will be defended 

 by the company, 



Standard automobile liability insurance policies provide two types of coverage; 



(1) Bodily injury 



(2) Property damage 



