Auto Liability Insurance

Most people don’t have extensive knowledge of the different types of car insurance available when they first start driving, and this can make choosing a plan that works for them difficult.

A lot of insurance companies require new drivers and car owners to have full coverage insurance, the most inclusive option when they purchase their first plan. Other types of insurance, like liability-only, only cover accidents caused by the holder of the insurance. Rental insurance covers cars rented by people who have liability covered through a private insurer; usually, the policy is a type of full coverage insurance for the rental car. Collision insurance only applies to cars involved in a collision. Comprehensive, or “other than collision” insurance covers damages caused by incidents other than a collision, such as attempted theft or an ‘Act of God’ like a hurricane or natural disaster. These insurance types are just a few of many; there are many other types of highly-specialized coverage plans available for interested parties. Most of these are highly dependent on who is at fault, whether that be the policyholder or the other party.

One type of insurance that does not rely on who is at fault is Personal Injury Protection, or PIP. Commonly referred to as “no-fault coverage,” this insurance will cover the policyholder, even if they were the party responsible for the damages. To a certain dollar amount, PIP covers the medical and/or funeral expenses of everyone involved. This means that the insured party, the other people in the vehicle at the time, and pedestrians (if they were struck by the vehicle) will all have some or all of their expenses paid for by the policy holder’s insurance. It also potentially covers lost wages that occur as a result of the collision, but pain and suffering are not covered by PIP. Personal Injury Protection isn’t available in every state. Many states have auto medical payments, or AMP coverage, as a substitute. However, AMP is not generally required in the states that it is offered in the same way that PIP is. A few states offer both types of coverage and they work together to best benefit the policyholder.

Only around twelve states currently have some form of mandatory PIP coverage available to drivers. Other states like South Carolina offer PIP yet don’t make it a mandatory form of coverage. For personal injuries caused by vehicular accidents, law firms like the Hammack Law Firm will fight insurance claims and seek damages on behalf of the injured. Personal injury lawyers can work as a substitute for PIP coverage for those without the policy.

Regardless of the policy you choose, it’s important to have a way to cover medical expenses and lost wages in the case of an emergency! If you find yourself struggling to pick a form of coverage, try to find a plan that offers a no-fault option. This can come in handy if you end up in a situation where other policies aren’t responsible for covering the collision.

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In the US, there are about four instances when a driver needs to show proof of financial responsibility: when they get pulled over by a traffic enforcer, if they get involved in an accident, when they renew their car registration, and when they renew their driver’s license.

Financial responsibility is the law that requires individuals (in all 50 states) to prove that they are capable of paying for damages in case of an accident that is due to their fault. Proving financial responsibility may be done by carrying auto liability insurance, 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, in lieu of insurance.

Carrying auto liability insurance is the most common way of demonstrating proof of financial responsibility. In fact, it is mandated on all drivers in 48 US states. In 38 of these states, the type of insurance coverage recognized is the tort system, wherein victims of accidents have the option to file a civil lawsuit against the at-fault driver and wherein compensation is paid to the victim by the insurance provider of this at-fault driver.

Nine states, on the other hand, require drivers to purchase the “no-fault” insurance coverage. This insurance coverage no longer requires the filing of any lawsuit since payment for losses (cost of medical treatment, lost wages, etc.) is made by each driver’s insurance provider. In the remaining three “choice states,” Pennsylvania, New Jersey and Kentucky, the ‘no-fault” system is, likewise, recognized; however, drivers are also free to rather purchase the tort insurance coverage. The 12 states where the “no-fault” auto insurance coverage is required are Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah.

(The state of New Hampshire does not mandate the carrying of auto liability insurance, while the state of Virginia allows drivers to register their cars as uninsured if they pay the uninsured motor vehicle fee to their state’s Department of Motor Vehicle. If drivers, in both states, rather choose to purchase auto insurance, however, then the policy they will need to have is the tort coverage).

More than 29 million drivers, according to the Insurance Research Council (IRC), continue to drive on US roads and highways without insurance, though, because so many drivers find car insurance policies an added burden to their budget. According to the website of Habush Habush & Rottier S.C.®, not carrying auto liability insurance can be more costly for driver as they can face suspension of their driving privileges and much more expensive financial obligations in case they get involved in an accident. To find the best insurance deal that will fall within their respective budget, drivers can ask for free auto insurance quotes from an independent car insurance company.

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