Why Vehicle Insurance is a must in United States?

The primary purpose of Vehicle Insurance is to provide monetary assistance against any loss/body injury resulting from a traffic collision.Also known with names such as auto insurance/motor insurance/car insurance, this insurance covers trucks, motorcycles, cars and many other road vehicles.

It is mandatory to have vehicle insurance when you use a vehicle on the public road.As it typically covers both property risk(loss or theft of vehicle) and liability risk(includes legal claims arising on account of accident).To get yourself insured and receive benefits in case of need, you have to comply with the terms and conditions of the insurance company.One such obligation of insured is to pay monthly fee often called as premium money.It must be regularly paid by insured to the insurer.The amount of premium can be determined through multiple factors involving the type of insured vehicle, age, and gender of covered driver, driving history, the location where the vehicle is generally stored and driven etc.Credit scores are also taken into account while determining premium money.In fact, most companies provide premium discounts to insured depending on these factors.


The regulation of vehicle insurance is different in each of the 50 US states and union territories.Each US the state has its own compulsory minimum coverage requirement.It is therefore required for each driver of US state to have the insurance coverage for the both body and property damage.However, minimum liability coverage varies from state to state.Like, minimum bodily injury coverage requirement range from $20,000 in Florida to $100,000 in Alaska and Maine, on the other side, minimum property damage range from $5000(4 states) to $25000 (16 states).

Vehicle Insurance is specially designed to offer coverage of financial or vehicular loss in case owner is faced with any accident/collision.Although, most states require vehicle owner to carry minimum level of liability insurance.But state like Virginia, don't require owner to be covered under vehicle insurance,here uninsured vehicle fee may be paid to the state.New Hampshire and Mississippi also offers the option to post cash bonds to vehicle owners.

According to Article IV of US Constitution,'The priveledges and immunities' clause protects the right of the citizen in their respective state when travelling to another.The insurance companies provide insured (vehicle owner) with an insurance card for a particular term of coverage that is to kept in the vehicle as a proof of insurance, in the case of an accident. Recent law passed by the states shows that electronic version of proof of insurance can now be accepted by authorities.

Under VEHICLE INSURANCE, consumers may be provided with different level of coverage depending on the type of policy they have brought.Coverage is sometimes watched as 100/300/100.In this the first two numbers shown are for medical coverage.That means policy will pay $100,000 per person up-to $300,000 total for all individuals.Whereas the last number indicates coverage for property damage.It may cover damage to another's personal vehicle or any other property that you hit as a result of the accident.

To get excellent coverage, you must choose the insurance provider that best caters to your needs.In United States, some of the best insurance providers in terms of market share include:
- State Farm Insurance
- Liberty Mutual Insurance
- Allstate Insurance
- Berkshire Hathaway
- The Travellers Company
- USAA Insurance
- Progressive
- Auto Owners Insurance and much more.


As per the motor vehicle act, every vehicle should be mandatory insured against third party risk.The foremost reason behind this is ever rising the number of accidents resulting in disability and fatalities among people.In the present era, we hardly find a day when we don't see or hear about an accident.It's all because of mismanagement and carelessness on the part of the vehicle driver or another person. Accidents are those Misfortunate happenings that can leave a tremendous burden behind if you are not insured.Thus, vehicular insurance provides enough coverage to both the parties(vehicle owner and injured).

Vehicle Insurance policies help victims and legal representatives of deceased victims to claim for Substantial compensation.That can only be possible if the vehicle involved in the accident was insured.In the case, if the vehicle is not insured, then recovery is a distinct possibility.After an accident, family member of the victim can claim compensation by showing proper documents to investigating officers and police machinery.In case of fatal compensation, the age and income proof of the victim needs to be shown.Whereas in the case of injury, medical paper/employment proof/income proof is required.The amount of compensatory money is based on several factors like who deserves the claim, age/ income of victim, also medical expenses and tenure of treatment determine the claim.In case of injury, resulting into permanent a disability that affects the earning of the victim is also considered and is paid according to it.

Although one may be very confident about his driving skills and may avoid buying insurance. As it pinches to pay premium money, especially in the case when you don't have to make any claim.But you will only realize the importance of insurance, when you met with an unfortunate situation and you need to claim money.Always remember that it doesn't matter how good driver you are, but you are always prone to risk of getting hurt by anybody's else mistake.Having motor vehicle insurance relieve you lot from monetary and mental stress.

  •  It covers for insured's liability against any third party.
  •  It pays for any vehicular damage that has caused due to the collision  /accident.
  •  The insurance company would also pay for replacement/repair cost to bring  your vehicle in the same condition as it was before the accident.
  •  Also provides compensation for personal injury to the occupant.
  •  It also offers you coverage for any legal action that may arise due to accident  to surrounding property/people
  •  Some policies also pay for the related loss of accident like transportation charges/towing charges.


Every year we spend hundreds or may be thousands on insurance and the chances are that we are paying too much.But here are some tips that help you to lower cost on vehicle insurance:

1.Ditch towing expenses: Towing also known as roadside emergency service is an easy cost to self-insure. (You likely pay $10 to $30 per year for coverage of towing expenses and one tow costs $100, which you can save by not paying for this insurance).Your car might break down but if it is well maintained, it doesn't happen often.Also, if you met with an accident, towing is generally covered under collision insurance.

2.Don't pay monthly charges: The insurance companies charge few bucks every month for monthly billing.In order to avoid such fees, if possible, pay every 6 months or even once in a year.If you want to pay Monthly, then use your company's auto-pay program which reduces the costs, as the company doesn't have to send you a paper bill.

3. Watch your credit: Nowadays, most insurance companies look at your credit reports to determine premium amount.Your credit history may correlate with what the company has to pay out.Company can't adjust your rate on your current vehicle, but as and when you add a new vehicle, its premium amount can be affected by your credit history.


Vehicle Insurance is the fastest growing segment in the insurance field as it is necessary to get insurance coverage when you buy a new vehicle.Motor vehicle /automotive insurance is an agreement between both the parties(insured and insurer), in which insurer agrees to indemnify the loss of operator of the vehicle that may occur as a result of an accident. If you understand the various types of vehicle insurance, then you can select the policy that best fulfills your requirement.Some of the categories of vehicle insurance is discussed below:

1.Liability coverage: Also know as Casualty Insurance, it is offered for both bodily injury and property damage when insured driver is responsible.Whatever the minimum amount, the insured can increase the coverage (before loss) for an additional payment.Let say, if insured driver hits the telephone poll and damages that poll, then liability coverage will pay for the loss.In this case, driver may also be held responsible for related expenses like loss of service claim(by the telephone company).And in case of bodily injury, if insured driver causes physical harm to the third party, he will be liable for this.
In a state like New Jersey, it is illegal to use a motor vehicle that is not covered under liability coverage.If an accident occurs that requires liability coverage, then both parties need to submit their insurance cards to court as an evidence of liability coverage.Liability coverage is available for insured either as:
- Combined single limit policy or
- Split limit policy

2.Collision Coverage: This coverage is provided to vehicles that are involved in collision/accident.This insurance coverage is basically designed to provide payment for repairing of the damaged vehicle or for cash payment of vehicle, if it is totaled/not repairable.

3.Comprehensive Coverage: Unlike collision coverage, this coverage provides compensation, subject to deductible,to vehicles damaged by fire/theft/vandalism/natural calamity/impact of animals.In short,it offers coverage for acts beyond human control.

4.Loss of use coverage: Also known as rental coverage, it provides reimbursement for rental expenses that are associated with the insured vehicle due to covered loss.

5.Uninsured/underinsured motor coverages:
Also called UM/UIM, it provides coverage if an at-fault party doesn't have insurance or doesn't have enough insurance.Then, the insurance company would pay the medical expenses of insured than would subrogate from at fault party.

SO,,,,,if I ask, Do you want to protect yourself and your family, surely your answer will be YES!!....Thus, People must think to go for such a beneficial insurance policy.As vehicle insurance is of great importance and getting covered under this will help you to mitigate your monetary as well as the mental burden in difficult situations.Such type of insurance safeguards general public from accident that might take place on road.

Why do i need Auto Insurance? Find Out Here .

One comment Add yours
  1. Hi Author,
    As a United States citizen this is a very much informative post for me.Whatever you are providing here about Vehicle Insurance is amazing.I really appreciate your research & efforts about Vehicle Insurance.After reading your post I have learned so many new things about Vehicle Insurance.Thank You & Best Of Luck for the future, will stay connected to your blog.

Leave a Reply

Your email address will not be published. Required fields are marked *