When searching for an insurance firm for car liability coverage, drivers need to know and understand a number of important things which may help them end up choosing the firm that will be best for their specific situation, need and budget: in short, an insurance firm that will provide great coverage without really hurting their pocket.
Rather than a federal mandate, carrying auto insurance liability is rather made compulsory by the state. Due to this, laws vary with regard to the maximum amount of coverage and the type of insurance that drivers should have. Below are some vital information regarding car insurance coverage:
- Types of coverage
With regard to auto insurance coverage, states are identified based on the type of coverage that they require; thus, there are those called “tort” states and there are those identified as “no-fault” states.
In tort states, the full tort insurance coverage is the mandate. In the event of an accident, the driver, who claims to be a victim, can file a civil lawsuit against the at-fault driver to seek compensation for all the damages he or she has been made to suffer. This compensation, which will be paid by the at-fault driver’s car insurance provider to the victim, may cover cost of medical treatment, lost wages due to absence from work, and pain and suffering, among others.
In states where the no-fault insurance coverage is required (this type of coverage is also known as personal injury protection or PIP), there is no need to determine whose fault the accident is, thus, no lawsuit needs to be filed. In the event of an accident, the drivers involved are compensated by their respective car insurance providers, regardless of who is at fault in the accident. The states where the no-fault coverage is required are Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah. In the states of Kentucky, New Jersey and Pennsylvania, drivers are allowed to choose either the full tort or the no-fault coverage.
- States that do not require car insurance coverage
The states of New Hampshire and Virginia are the only ones identified as having no insurance liability coverage mandated on drivers. In New Hampshire, drivers can simply show capability of providing sufficient funds in case of an “at-fault” accident, while in Virginia, drivers are required to pay a significant fee to be able to register their uninsured car. The states of Washington, New Hampshire, Montana and Hawaii, meanwhile, do not require carrying of liability insurance coverage on motorcycle riders.
Despite being required by the law in 48 states, 1 in every 8 drivers, according to the Insurance Research Council, continues to drive despite being uninsured. One consequence of this driving violation is being required by the court to file an SR-22, a certification that your car insurance provider will have to send to your state’s Department of Motor Vehicles (DMV), proving that you already have liability coverage. SR-22s usually last for three years and causes a little addition to your insurance premium, making a bit more expensive.
Many drivers rather risk driving without coverage, rationalizing that they cannot afford to pay premiums. In its website, however, the firm Insure on the Spot clearly explains why not being insured may prove to be much more expensive than carrying insurance. Furthermore, said firm urges drivers to seek the help of independent car insurance companies when it comes to their insurance needs. These companies are able to provide drivers with an insurance quote which can best fit their situation (if they have committed traffic violations in the past), needs and, most specially, budget.