For what reason must insureds provide proof of financial responsibility?

The requirement for insureds to provide proof of financial responsibility is primarily to satisfy legal requirements. In many jurisdictions, including Hawaii, drivers are mandated by law to demonstrate they can cover costs associated with potential liabilities that may arise from vehicle operation, such as property damage and bodily injury caused to others in the event of an accident. This proof often takes the form of insurance policies or bonding, ensuring that individuals can be held accountable for damages without burdening the public or government resources.

This legal framework is put in place not only to protect individuals but also to ensure greater accountability on the roads, fostering safer driving practices. While there may be other contexts in which proof of financial responsibility is needed, such as for claims processing or obtaining new insurance policies, the foundational purpose is to adhere to legal obligations that serve public interest.