What’s Important to Know About Auto Insurance Laws
To the average person, auto insurance laws seem pretty complex. To fully understand what the various auto insurance laws mean most drivers need a law degree. But most drivers don’t have one. So here are two very important things to keep in mind in regards to auto insurance laws.
1. Auto insurance laws vary from state to state
Auto insurance laws are determined at the state not the federal level. Basically, each state passes its own laws regarding the type of coverage motor vehicles operators must maintain. The states also specify the legal consequences for not maintaining state mandated minimum auto insurance coverage.
Your auto insurance agent can help you understand the auto insurance laws that are specific to your state. You can also contact the state department or bureau that oversees consumer auto insurance. Besides learning about a state’s mandatory auto insurance laws, most states agencies offer helpful guides to understanding the different types of mandatory and optional auto insurances coverage options.
2. Tort versus No- Fault
The other thing that’s important to know about auto insurance laws is that they’re based on one of two systems: the traditional “tort” or fault-based system, or a “No-Fault” system. There are benefits to both systems. But because of the way auto insurance laws are interpreted, there are also disadvantages.
Under the more common tort system, the motor vehicle operator’s insurer pays the costs associated with any bodily injury and/or property damage the operator’s negligent operation caused. Under a No-Fault system, which only 13 states have adopted, auto insurance laws require your insurer to pay for your damages regardless of fault. Under either system, auto insurance laws require auto insurers to pay only up to the operator’s chosen coverage limits.
As you can see, taking time to learn more about your state’s auto insurance laws is definitely in your best interest.