Yes, drivers must have at least minimum liability auto insurance to be able to drive legally. Federal laws require every driver to have liability insurance to protect the interest of pedestrians, other road users, vehicle and property owners against damages and injuries caused by an at-fault driver. Every state implemented federal laws into their state legislations but implementations, liability coverage limits, other coverage required and penalties for noncompliance vary.
All states have implemented financial responsibility laws that hold drivers responsible for damages caused to third parties. In 48 states and the District of Columbia, it is explicitly prohibited to operate a vehicle without the mandatory liability automobile insurance coverage and other state-required insurance provisions. However, Virginia offers an alternative option whereby motorists can pay an uninsured motor vehicle fee of approximately $500, but this does not offer them any insurance benefits. Considering most motorists in Virginia can buy minimum liability car insurance for a similar amount, it is a no brainer to buy insurance since drivers are responsible for the damages they cause. On the other hand, in New Hampshire, drivers must still demonstrate their ability to meet financial responsibility requirements if they choose not to purchase insurance.
In order to comply with regulations, drivers are obligated to possess valid proof of insurance at all times to present when requested by enforcement agencies. Failure to provide such proof can lead to the issuance of a ticket. Vehicle owners are required to purchase insurance for their vehicles. A significant number of states have implemented a system where vehicle registration is contingent upon having insurance, and they electronically monitor the insurance status of cars through the Department of Motor Vehicles (DMV). Consequently, it is possible to be identified as uninsured even without being caught driving without insurance.
There are severe penalties for driving without insurance, including fines, license suspensions, vehicle impoundment and jail sentences in some cases, depending on the state.
Virtually every state has a minimum level of liability vehicle insurance coverage requirements imposed on vehicle owners. This coverage usually comes in two parts. Bodily Injury Liability coverage pays for injuries caused to pedestrians, passengers and drivers when the driver of the insured vehicle is at-fault in an accident. Property Damage Liability Damage covers other people’s monetary losses in the same situation.
For example, they are expressed as $25,000/$50,000/$10,000, in which $25,000 is the maximum coverage offered to one injured person, $50,000 is for total injuries and $10,000 is maximum payable for property damages. Every state sets their own limits but most insurers offer higher levels of coverage in their standard policies and many people buy higher levels.
No fault and few other states require Personal Injury Protection coverage as well. Twenty states include Uninsured Motorist Coverage in their minimum coverage requirements too. If not, UMC and PIP can be arranged as optional additions. And few states require Medical Payments coverage.
By law, drivers who are responsible for causing an accident are obligated to provide compensation for the injuries and damages incurred by others. If the at-fault driver has liability car insurance, the insurer may cover the losses of third parties, effectively settling claims against the driver, as long as there is adequate coverage. However, if the driver did not purchase insurance for any reason or if their insurance had expired at the time of the accident, they will be personally responsible for paying for the damages and injuries out of their own pocket.
Furthermore, when motorists take out a loan or lease a car, they are typically contractually obligated to purchase Collision and Comprehensive coverage. If they fail to maintain this insurance policy, the lender may step in and purchase Force-Placed auto insurance on their behalf. The costs of this insurance will then be added to the monthly loan or lease payments. This measure ensures that the vehicle is protected against damages and losses, as required by the lender.
The majority of motorists understand the potential consequences and risks associated with driving an uninsured vehicle, extending beyond the legal implications. They recognize the financial burden they may face if they are unable to cover the costs of damages and injuries resulting from an accident. As a result, most individuals choose to insure their vehicles with full coverage rather than settling for basic coverage mandated by law. While compliance with legal requirements is important, many people prioritize the usefulness and protection provided by a comprehensive car insurance policy.