Know More About Auto Insurance
Auto insurance or vehicle insurance, as the name implies is an insurance coverage for cars, trucks and other automobiles. The main purpose of purchasing this insurance is to ensure policy protection against any kind of loss or damage incurred by the insured vehicle due to traffic accident. Auto insurance, also known as car insurance is one of the most popular insurance schemes opted for by people. Even though the basic terms of car insurance remain same throughout the country, some of its clauses may vary from one state to another depending on which category they fall into in terms of vehicle insurance.
For instance, the requirement of having an auto insurance covering liability for injuries and property damages is enforced differently in different states. To elaborate further, in the state of New Hampshire it is not an abiding law for motorists to carry liability insurance (the ballpark model). However, the state of Virginia necessitates an annual payment of $500 for motorists who have not bought car liability insurance. Moreover, the laws regarding vehicle insurance are relaxed in some states and quite binding in others. Accordingly, the penalty for not having car insurance varies from one state to another.
A US citizen's choice of auto insurance largely depends on the vehicle insurance laws in the state that he or she lives in. Depending on this, all the 50 states in the country can be classified into three main categories: Tort states, No-fault states and Add-on states. Tort States are those states in which a law suit can be filed against a person who has caused a motor accident and the guilty person is liable to pay for the losses incurred. In no-fault states if two parties get involved in an auto accident, the insurance company is liable to pay the cover amount to the insured as per the policy limits regardless of who was responsible for the accident. In such states there is no scope of blaming a party or filing a suit against them to recover the loss incurred.
However, in such a case you can only ask your insurance company for the compensation of your losses. Nonetheless, after your insurance company has settled your claim, it can pursue the insurance company of the other party to compensate the loss in case the latter is clearly at fault. Thus, neither parties are directly involved in making any direct payments to each other. The third category is the add-on states in which you can claim for compensation from your insurance company in case of an auto accident but this will not make you immune from law suits that can be filed by the other party. Whichever type of state you live in, it is always good to buy auto insurance.
