Why Is Car Insurance Mandatory?

Driving on public roads and streets isn’t an automatic right given to anyone after certain age but it is a privilege for people who comply with the necessary requirements like having a driver license, vehicle registration and insurance. When this point is accepted it is easier to answer the question of why is auto insurance mandatory?

It is state authorities responsibility to make sure citizens are sufficiently protected from harm. Every state must make sure that other road users, pedestrians and anyone else must be covered against injuries and damages caused by a car accident.

The easiest way of ensuring that drivers have financial provisions to meet the costs of injuries and damages they caused to third parties due to accidents is to make them buy auto insurance. Actually, buying sufficient liability coverage is the easiest way of doing the right thing after causing other people suffer vehicular accident injuries and damages because no decent person would want to cause people suffer financially as well.

That is why every state in the US has mandatory auto insurance requirements. In some states, depositing certain amount of money with state authorities, buying bond or providing proof of financial responsibility can discharge you from the requirement of buying liability automobile insurance. However, 9/10 it is easier and cheaper to buy car insurance to comply with the requirements of your state than alternatives.

What makes the insurance the cheapest solution that pays for damages and injuries suffered by innocent bystanders and other motorists is its joint nature. Every vehicle owner is required to purchase it and contribute to the premium pool. Then, these moneys are used to cover the losses suffered by a few unfortunate people. There would be a huge void in the economy without this collective and obligatory system.

When Did Car Insurance Become Mandatory?

It was first imposed by the laws of Connecticut in 1925 and Massachusetts in 1927. Although these requirements were in basic form, these states were first to require liability insurance to cover injuries, deaths and property damage resulting from a vehicle accident. Mandatory automobile insurance as we know today was enforced by most states by 1970s. From then onwards, it is almost always compulsory in the US. It is the most effective way of ensuring the damages suffered by third parties as a result of an auto accident are paid. Also, it is a simple solution for drivers to protect their driver licenses against suspension due to driving without insurance in most states.

Although it isn’t the subject of this post it may be helpful to answer why isn’t health insurance mandatory when vehicle insurance is? The answer is simple because it is for your own and your family’s health benefit. Remember that only minimum liability cover is required by laws and this is the part that pays for other people’s damages. It is voluntary to insure your own car and other losses.

What Is Voluntary and Mandatory Vehicle Insurance?

Sometimes, basic requirements in their states can confuse drivers. Some motorists may take these minimum requirements as all they need to worry about in terms of insuring their automobiles. So, it is best to define what is involuntary car insurance and what are voluntary covers you can buy on top of basic liability coverage. In other words, we should answer to questions like what is the cheapest vehicle insurance I am required to buy and how much protection do I need?

Mandatory Car Insurance

First of all, every state in the US determines the level of liability or compulsory auto insurance coverage. You will have to buy the minimum coverage required by your state if you want to drive a vehicle. It is illegal to drive a motor vehicle without such coverage and there are serious consequences if you do. You can buy cheap liability cover right here. States are not interested if you insure your automobile or not. But they have to make sure that anyone who drives a vehicle has some sort of liabilities coverage. These policies pay for property damages and injuries you may cause to other people. Every state has some level of liability coverage requirements enforced by laws.

Voluntary Auto Insurance

Also, there may be questions about how to decide the level of voluntary car insurance coverage. Any other coverage you buy on top of basic legally required coverage is voluntary. For example, it is up to you to insure your automobile with collision and comprehensive coverage. They will pay for most damages that may come to your automobile due to crashes, theft, vandalism, weather damages and any other accidental losses. Also, buying higher than compulsory cover would be optional but highly recommended. About 2/3 of motorists buy full coverage. Again you can get cheap full coverage auto insurance quotes on this website.

Even though it may be voluntary most people would not be comfortable without having sufficient coverage to protect their investments on cars and their other assets. If you don’t have sufficient liability coverage you will have to pay for the damages and injuries you caused to other people. They won’t just go away because you don’t have coverage. Instead they will sue you for whatever you have got. Insurance is a serious matter and you should consult a broker if you are not clear about any aspects of it. Not knowing is never a good excuse. You have got to learn and make a decision for yourself.

Even further many drivers want monetary protection from uninsured motorists. It may sound like it is their problem to insure their autos or not. However, it becomes your problem if they cause any damages to your auto because they offer no compensation to third parties and probably no means on paying your damages.

Luckily there is a solution that can protect you against such motorists and that is called Uninsured Motorist Coverage. This cover may come already included in your compulsory car insurance policy depending on the state you live. Otherwise, you can add onto your policy. This is something you need to check when you are buying your policy. Basic state required coverage is what every automobile owner should buy in case they cause damages and injuries to others. In case they don’t, you have Uninsured Motorist Coverage to fall back to providing you have the cover included.

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