Similarities and Differences in Car Insurance Laws by State Auto insurance in the US is largely influenced by the state laws. If you are planning to move states or if you will be making trips across different states People should understand how the laws in the various states are similar or different from your own. This allows you to make the necessary adjustments and avoid being on the wrong side of the law in a new state. Here are the major areas where the different states have similar or different approaches to auto insurance.
1.The requirement of compulsory car insurance
All states with the exception of New Hampshire require one to have car insurance and they set out the minimum amount required. While New Hampshire does not have a mandatory car insurance requirement, should you be found to be in the wrong, you will be charged liability for up to $50,000 and property damage for up to $25,000. Should you not be able to meet the charged damages in case you or your car causes an accident you can risk losing your registration or license suspended.
The state of Virginia offers the option of paying the state $500 annually if you want to opt out of having mandatory insurance. This will however not act as coverage of any kind and one is still required to meet caused damages should he or she be held responsible for an accident. However, for many drivers in these two states opt to have car insurance as it is cheaper than the risk of paying up liability suits.
2. Proof Financial Responsibility as Alternative to Insurance
Proof of financial responsibility is an option used as an alternative to insurance. It allows an individual to show the ability to meet the minimum liability costs as required by the state in another form than car insurance, this could be in the purchase of a bond or deposit the cash with the state. Should there be an accident, this amount will cater for the expenses and then you have to pay back the money in full plus interest in the case of a bond to get a new proof. States which allow you to have proof of responsibility option include;
- New Mexico
3. Tort and No-fault insurance States
There are two main car insurance systems used to categorize approaches by different states. These are Tort and No-fault insurance systems. A tort state is one which insists on finding the party responsible for the accident and penalizing the party for the damages suffered by the other party. In this type of States, parties in an accident are paid for sustained damages by regardless of the person at fault. In return for the guaranteed compensations, the parties forfeit a portion of their rights to sue the other driver in the accident. This is very important to note.