Auto Insurance Laws

Everyone has auto insurance laws to follow, the one who purchases the insurance as well as the one who sells it. Sometimes, drivers aren’t the ones who are making the decisions on what type of coverage they are purchasing because the state makes the requirement that they buy it in order to drive. Also, if insurance companies don’t follow the rules set for insurance carriers, their customers can bring lawsuits against them.

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State Auto Insurance Laws

There has been a problem. When drivers collide with each other on the roads and the highways, they have been in the habit of taking each other to court. These collisions can cause extensive bodily injuries and damage to the vehicles. These many lawsuits were meant to force the person responsible for causing the accident to pay for all of these medical bills and auto repair bills.

To reduce all of these car collision-related lawsuits, every state in the U.S. has written their own auto insurance laws. Some states have remained tort states, but others have decided to become no-fault states.

Tort States

Most of the states are tort states which means that these drivers aren’t restricted by their state’s auto insurance laws in what they can sue another driver for if that person causes a car collision. These states still would like to reduce the incidences of lawsuits filed for this reason. In order to do this, they have all written into law the fact that their drivers need liability insurance.

The Meaning of Liability Insurance

Liability insurance, specifically bodily injury and property damage, are the two types of coverage that every state requires people purchase if they are to register their vehicles with the state’s Department of Motor Vehicles (DMV).

Bodily Injury Liability

The bodily injury liability coverage is what will lower the number of times that people sue each other for payment of their medical bills or funeral costs. The states set a minimum amount of how much insurance their drivers should have.

For example, Montana has set the minimum for bodily injury at $25,000 for one person who will need to file a claim for payment of his or her medical bills. As long as the bills remain under $25,000, they can be paid if the driver has purchased the minimum; if the bills are higher than $25,000, the injured can then take the driver who caused the accident to court.

These drivers also will need to purchase an amount of insurance that covers the entire accident. This number is always double the minimum for bodily injury for one person and in Montana, it would be $50,000. If two people have injuries that create medical bills for $25,000 each, there will be enough coverage to pay for everything.

Property Damage Liability

For all property damaged in the car accident, Montana has set a minimum amount of property damage liability coverage at $10,000. One person’s property repair bill may take the entire amount. If a second person also has property damage, this person won’t be able to file a claim with the insurance company, and the only recourse will be the lawsuit.

Purchasing More than the Minimums

The state’s minimum requirements are just that, only minimums. Drivers are entitled to purchase more insurance to cover the possibility that:

• The medical bills could come to more than the minimum amount for one person,
• More than two people could be injured and need to have their medical expenses paid,
• Property damage also exceeds the minimum,
• More than one person may need to file a claim for property damages.

Purchasing more than the minimums would mean that the premiums would be higher. People choose to purchase only the minimums when they need to keep their expenses down, but this isn’t the best way to keep premiums low. Drivers may also do a comparison search in which they will receive some low quotes from several auto insurance companies for extra liability coverage.

No Fault States

Not every state is a tort state, and these states have different auto insurance laws. No fault states do restrict the nature of people’s lawsuits because they don’t allow their drivers to sue for damages such as pain and suffering under every circumstance. Drivers in these states must purchase what is called PIP insurance.

Personal Injury Protection Insurance

Although these states are keeping their drivers from suing each other, they still need their drivers to be able to pay their medical bills. Under the no fault system, the auto insurance laws state that people must purchase PIP insurance which pays medical bills and funeral costs without regard to who caused the accident. Each driver, who must have PIP insurance for their own medical bills as well as their passengers’ bills, will file claims with their own insurance companies for their own PIP coverage.

The 12 States with No-Fault Laws

Currently, there are only 12 states that follow a partial no-fault system. They are:

• Florida,
• Hawaii,
• Kansas,
• Kentucky,
• Massachusetts,
• Michigan,
• Minnesota,
• New Jersey,
• New York,
• North Dakota,
• Pennsylvania and
• Utah.

Property damage isn’t included in the no-fault determination. Drivers may still sue each other for their damages if they exceed the limits set by the state. Seeking quotes from several auto insurance companies will help people in no fault states find the adequate amount of property damage liability insurance they will need at a good price.

Auto Insurance Laws For Insurance Companies

Every state has auto insurance laws for the drivers; they must purchase the type of coverage that has been described above. Because this is a requirement in order to exercise the privilege of driving, auto insurance companies must accommodate these people as much as possible.

Depending on the state, auto insurance laws require that auto insurance companies:

• Offer liability coverage at the minimums set by the state in every package,
• May only cancel a policy when allowed by their state’s laws,
• May cancel or refuse to renew a policy at the end of the policy’s term (six months or one year),
• Must send a letter to their clients at least a month prior to a cancellation or a non-renewal,
• May cancel a policy for any reason within the initial period of the first two months.

Staying Informed

No one has a choice whether their state is a tort state or a no-fault state, but auto insurance is a necessary expense if they are going to drive. Drivers will find the best prices for their liability coverage and any extra coverage they may need for free from this comparison website. If they have received their notices that their policies have been cancelled and they need insurance in a hurry, they will receive their quotes within seconds and have a new policy before the sun goes down.

Start comparing auto insurance quotes today by simply entering your zip code below!