If You do not Have Car Insurance, Then You Can Be in as Much Danger as Someone You may Injure in an Accident that is Due to Your Fault

Aug 7, 2016 by

In all 50 states in the U.S., proving financial responsibility is a basic requirement for people who want to drive legally. This financial responsibility law specifically requires drivers to prove their capability in paying for damages in accidents wherein they are at fault. Financial responsibility may be proven by:

  • Carrying auto liability insurance, which is the requirement in all U.S. states, except in New Hampshire; or,
  • Depositing securities or money with the state treasurer or filing an SR-22 in lieu of purchasing an auto insurance policy – this is allowed in New Hampshire. A driver, however, may still choose to be insured if he or she prefers so.

(In the state of Virginia, drivers may instead pay the state’s Department of Motor Vehicles the required uninsured motor vehicle fee as an alternative to carrying auto liability insurance)

It is necessary for drivers to show proof of financial responsibility in four different instances:

  • When they get pulled over by a police officer;
  • When they get involved in an accident;
  • Upon renewal of their driver’s license; and,
  • When they renew their vehicle registration.

Carrying auto liability insurance remains to be the most common way for drivers to demonstrate proof of financial responsibility. The type of insurance coverage that drivers need to carry depends on the liability system existing in the state where they reside. In 12 states (Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah) the “no-fault” auto liability coverage is the system recognized. Under this “no-fault” system, payment for losses and damages, which includes cost of medical treatment and lost wages, comes from each driver’s insurance provider, regardless of who was at fault in the accident.

Thirty-eight other states recognize the “tort” or “fault” liability coverage. Under this system, victims are compensated by the at-fault driver’s insurance provider; an accident victim may, however, file a civil lawsuit against the at-fault driver for further claims. This usually happens if the compensation paid by the insurance company does not fully cover the all losses and damages suffered by the victim.

Though a requirement, the Insurance Research Council (IRC) says that uninsured drivers in the U.S. still exceed more than 29 million. This is due to the high cost of insurance policies. According to the website of Second Gear Magazine, through some independent car insurance agencies, drivers can get insurance coverage that best fit their specific needs but without paying more than what they should. Independent car insurance firms have made it their business to help drivers and car owners find the best insurance deals at the lowest prices. They do these by offering different free online insurance quotes from major insurance providers. These quotes will allow customers to compare deals and prices, and get the policy that they really need.

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