Car Insurance Liability Coverage: A Mandate in 48 States
In a car accident, a bodily injury liability policy is designed to compensate a victim for his/her physical injuries, while a property damage liability policy is designed to pay for damaged properties owned by the victim. This is how things work in tort states where the tort car insurance coverage is required of drivers.
In tort states, where a lawsuit is usually filed by an accident victim to specifically determine who is at fault in an accident and how much the compensation should amount to, compensation is paid by the liable driver’s insurance provider. There are currently 38 US states where the tort coverage is legally required.
In contrast to the tort coverage is the no-fault car insurance, where payment of compensation is made by the drivers’ respective insurance providers, regardless of who is at fault in an accident. Due to this, filing of a lawsuit by a victim is no longer necessary, making payment of compensation much faster.
There are 9 states where the no fault insurance coverage is in effect: Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah. The states of Kentucky, New Jersey and Pennsylvania, meanwhile, give drivers the option to choose between no-fault car insurance and full tort coverage.
In New Hampshire, rather than mandate the carrying of car insurance, the state simply requires drivers to demonstrate capability to provide sufficient funds in case of an accident due to their fault; this can be done by posting a bond. In the state of Virginia, on the other hand, drivers can either have insurance coverage or pay a significant fee to the state to be able to register a car as uninsured.
Not all drivers, however, comply with the mandate to carry car liability insurance, also called the Financial Responsibility law. In fact, 1 in every 8 drivers in the US, according to the Insurance Research Council, continues to drive despite being uninsured. What these drivers do is purchase a car insurance policy, but only for the purpose of having their car registered and their license renewed; as soon as they are able to do this, they cancel the policy.
The high cost of premiums is what makes thousands of drivers risk driving uninsured than continue paying premiums. According to Habush Habush & Rottier S.C.®, however, not being insured can prove to be much more expensive that being insured; drivers also face the possibility of having their license suspended, their driving privileges lost, and costly fines.
For the best insurance deal, regardless of a driver’s driving history and driving experience, he or she can always ask quotes from independent car insurance companies, which also provides assistance to drivers to help them find a policy that will work best for them and which is within their budget.