Whatever driving history you have, whether you have already been involved in an accident or have been convicted of a DUI/DWI, there is one law that you will need to comply with: the Financial Responsibility law. This law requires drivers to prove their ability to pay for damages due to accidents wherein they are at fault. Non-compliance with this law can result to suspension of your driving privileges, fines and higher cost of insurance premiums. In the event that you do cause an accident, then you may also face a civil lawsuit wherein you would be legally required to compensate your victim for his/her losses and damages.
Proof of financial responsibility may be demonstrated by carrying auto liability insurance, by posting a bond or depositing cash with the state, or by paying the state’s Department of Motor Vehicles (DMV) the required uninsured motor vehicle fee.
Carrying auto liability insurance is the common and cheapest way of proving financial responsibility; this is why as many as 48 states mandate it. New Hampshire and Virginia are the only states where having car insurance is not a requirement, but an option.
The car insurance law was first made compulsory 1925 in the states of Massachusetts and Connecticut. The introduction of this was a result of the obvious signs government officials saw during those times: that cars would crash and cause injuries to people and damages to properties. In these crashes, however, the ones who were really made to suffer were the victims, many of whom were not compensated by the at-fault driver, thus leaving them burdened with the cost of medical treatment and inability to earn wages in addition to their physical and emotional pains and suffering. Thus, to make sure that at-fault drivers will never default on paying their victims, the solution was the car insurance law made compulsory.
Presently, there are two major types of car liability insurance coverage available and the type of coverage that a driver needs to have depends on whatever is mandated by his/her state. In 38 states, the type of insurance required is the tort system, which is actually a system based on “fault.” The at-fault driver is held responsible for all the damages sustained by the victim; however, it is this driver’s insurance provider which will pay the compensation that the victim is qualified to receive.
The other type of coverage, which is mandated in nine states, is the “no-fault” coverage, wherein the drivers involved in an accident would receive compensation or benefits from their own insurance providers, regardless of whose fault the accident is. The nine states where this “no-fault” coverage is mandated are Utah, North Dakota, New York, Minnesota, Michigan, Massachusetts, Kansas, Hawaii and Florida. In the states of Pennsylvania, New Jersey and Kentucky (these are identified as “choice states), drivers have the option to carry either the tort insurance coverage or the no-fault coverage.
Regardless of the type of coverage a state mandates, the basic grievance of drivers is the high cost of premiums that need to be paid. The solution to this, according to the website of Insure on the Spot, is asking for free insurance quotes. These quotes are intended to help drivers find the policy that will best suit their individual coverage needs without hurting their pocket.