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Special Types Of Auto Insurance Only Offered In Certain States

One of the largest misconceptions about auto insurance is that it is all created equal. There are many auto insurance coverage types based on how extensive the actual coverage in the event of an accident actually is. Furthermore, different states often have different qualifications, rules, and protocols for insuring drivers. Here are just a few of the special auto insurance regulations that differ between states.

Most states require at least a minimal amount of insurance be purchased for a vehicle, although one that doesn’t is New Hampshire. In lieu of insurance, drivers there can simply pay a $500 waiver fee to the state. It is a risky venture, however, to go without insurance, as it could end up costing a lot more in the event of an accident.

North Carolina stands out because it requires that drivers hold at least basic liability insurance before they will issue you a driver’s license. The reasoning behind this is more to protect other drivers that you might have an accident with to ensure they can receive compensation if you do cause them damage to their car or person. North Carolina also does not require that drivers carry proof of insurance, but it is mandated that drivers must be able to trade insurance information in the event of an accident. Again, such rules are in place not to protect yourself, but anyone you might happen to injure.

Other states, such as Michigan, have what is called “no fault” insurance. This means that compensation from the insurance company cannot be withheld or altered, regardless of whether or not the accident was your fault. California and New Jersey are two states that have enacted driver responsibility acts. In these states, a driver can only pursue economic damage in the event of an accident if they lack liability insurance. In short, this means that without liability insurance, a wronged driver can only seek the cost of damage to physical property, such as the car itself. They cannot further seek damages for personal injuries, or more abstract damages like pain and suffering. This pressures drivers to obtain liability insurance lest they be injured and unable to obtain damages for that.

It is important to research what special auto insurance rules and regulations exist in your own state, because they are not all the same. Knowing what your state specifically requires is important for motorists, as it can protect them from high costs in the event of an accident, as well as state fines for not being in compliance. Know what auto insurance coverage types are available and required in your state, and you can be protected from the risks associated with auto accidents.

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