Car Insurance : Auto Insurance : Ins & Outs
The main types of insurance in the U.S. are life insurance and car insurance. Car insurance is a type of insurance required in most U.S. states.
If the car is not insured, it can not be registered. The concept of “compulsory insurance” was born in America in the early 20th century and is constantly evolving. Car insurance is governed by the laws of each state separately. In New Hampshire, Tennessee and Wisconsin, it is not mandatory.
The differences in the laws of other states are reduced mainly to the accepted types of mandatory insurance policies out there, as well as to the minimum amount of insurance coverage. Insurance policy starts at about the same: an understanding of automobile insurance is an important part of your training as a driver. In most states, it is impossible to buy a car without a car insurance. The car without an insurance can’t be sold.
Insurance in the United States are handed over completely to the states, which may set their own requirements. In most states, an auto insurance in the United States is mandatory (liability insurance) in case of injury to health or property of third parties.
Although there are exceptions – for example, in the State of New Hampshire liability insurance is not required.
And in one of the oldest states in the country – Virginia – instead of insurance you can pay $ 500 to the budget, which is not at all analogous to the insurance, but simply allows you to register a car without insurance policy.
And in North Carolina driver’s license generally can not be obtained before you present a valid insurance.
Two Approaches To Auto Insurance
There are two opposite models that respond to the question of who should compensate damage in the event of an incident. According to the “model of the stadium» (ballpark model), practiced in New Hampshire, each party involved covers their own expenses.
That is, no matter what happens, all costs associated with the restoration of health or property, will be covered by you, even if what happened is not your fault. The idea prevalent in the country filled with baseball stadiums, where visitors are often injured by baseballs and where the administration is not responsible for any injuries and can not be held responsible. In fact, unless you can predict where a tiny ball will fly, who is?
In contrast, a “Disneyland model” binds to compensate damages caused to third parties by the guilty parties involved in the incident. It owes its name to the model of Disneyland amusement park, where the management is responsible for any accident, which occurred with visitors.
The highest expression of this model is the idea to give the duty to register your car to the insurance companies that also must insure them. Luckily today government structures in each state are involved in the issuance of license plates.
Who Is Insured?
As a rule, the U.S. insurance protects any person that controls the insured vehicle, except for family members of the car’s owner – they must be specifically set in the policy. That is, when you are driving your friend around – sadly he is not protected by your insurance, only you.
You can also exclude from coverage any individuals you want.
There is a market and a special type of auto insurance coverage for those who have not ever owned a car, but who for some reason, still need to drive – “Named Operator Policies”. Such insurance is useful to those who have been deprived of their driving license and to restore it need to show that they have a car insurance.
Variety Of Car Insurance Policies
Generally, insurance in the U.S. is very flexible and a large set of insurance products are present.
Thus, the responsibility can be insured without a distinction between “life and property» (combined single limit), and the division can be made (split limits): in the latter case for each type you can set a liability limit.
And “insurance against accidents» (collision) is one of the options as well.
A special kind – a “comprehensive coverage», which is, in fact, is not, protects the car from the risks that are not included in the collision – such as theft, fire, collision with animals and so on.
There are special types of insurance needed in the rare but still possible situations:
> If you are faced with uninsured drivers – “uninsured / underinsured coverage”;
> If a renting company will request from you a payment for the financial losses for the time it won’t be able to rent out the car you damaged, that is, insurance against loss of profit – “loss of use”;
> If you took a loan for an amount exceeding the actual cost of the car, the rest can also be insured (loan / lease payoff). Insurance companies, in order to avoid fraud, typically insure cars only for their actual value, but in this case, having the confirmation you received from your bank, your insurance company can insure your car for a larger amount then the actual cost;
> If you need towing, not as a result of an accident (mechanical problems, car is out of gas, etc.). In conventional coverage such risks are not included, so there might be a special fee for towing;
> If you want your personal belongings that are in the car were insured (personal property).