Financial Responsibility Through Auto Insurance

Whether it be for the purposes of a Failure to Maintain Financial Responsibility (FMFR) charge or to determine eligibility for a driving safety course (DSC), municipal courts in Texas are frequently presented with paperwork that a defendant believes shows their financial responsibility through motor vehicle liability insurance. At the TMCEC Central Texas Regional Judges and Clerks Seminar in Austin last month, multiple discussions broke out about best practices for municipal courts to validate whether such paperwork indeed shows that the defendant was or is covered. Courts generally need to assess the provided evidence of motor vehicle liability insurance on a case-by-case basis as the policies defendants present to courts vary greatly. Thankfully, there is statutory authority to guide these assessments.

Subchapter D of Chapter 601 of the Transportation Code (“Establishment of Financial Responsibility Through Motor Vehicle Liability Insurance”) lays out the requirements. The policy must be either an owner’s policy or an operator’s policy. An owner’s policy is tied to a specific vehicle and covers the vehicle’s owner and anyone operating that vehicle with the owner’s permission. An operator’s policy is tied to an individual and covers the policyholder in any vehicle they operate. Operator’s policies are usually held by individuals that do not own a vehicle. There is no requirement in Subchapter D that the policy be “in the defendant’s name.” Owner’s policies cover people whose names are not listed on the policy. Courts should confirm, however, that a defendant is not expressly excluded from coverage in the specific policy.

TMCEC recognizes the difficulty municipal courts face when a defendant provides an owner’s policy that covers a vehicle that the defendant does not own. In these cases, follow-up questions may be warranted, such as whether the covered vehicle is owned by a family member of the defendant or whether the policy covers the vehicle that the defendant most regularly uses. Section 601.076 of the Transportation Code includes within the required terms on an owner’s policy that it cover a vehicle and pay on behalf of the named insured or another person who uses the vehicle with express or implied permission. Additionally, Section 601.054 states that evidence from an owner shall be accepted for a driver that is an employee of the owner or that is a member of the owner’s immediate family or household.

Recent legislation might also help. H.B. 1693 (2021) gave municipal courts authorization to access TexasSure, which is the program law enforcement typically uses to determine a motorist’s insurance status during a traffic stop. TexasSure is limited, however, in that it cannot provide a person’s insurance status on a previous date. Thus, TexasSure might prove most helpful for the purposes of DSC where courts need only ascertain the defendant’s insurance status at the time of the request. Its utility may be limited in the context of FMFR charges where the question is whether the defendant was insured at the time they were cited.

Published by markgoodner

General Counsel & Director of Education, TMCEC

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