Why is Car Insurance Mandatory

Charles Goodman Group: Trusted Bedford Insurance Agents

Mandatory car insurance laws first went on the books in 1925. Massachusetts and Connecticut were the first states to make auto insurance compulsory, and the rest followed. Virtually everyone who drives these days has always taken mandatory auto insurance as a matter of course. Have you ever wondered why car insurance is required by law in most states? You can always ask your Bedford insurance agent, but the main reasons for compulsory auto insurance are fairly simple to grasp.

In the earliest days of the automobile, it didn’t take long for people to realize just how costly even minor fender benders could be. Cars are expensive, and repairing or replacing them can set a person back by huge amounts of money. As automobile usage became more widespread, allocating time and space in the local courts to handle lawsuits over damages and losses incurred in car accidents became progressively more difficult. Mandatory car insurance laws helped to alleviate these problems. Even as cars became safer and more reliable, accidents continued to occur. Even now, collisions and other incidents are a fact of life when it comes to driving.

Each state’s laws vary, but all of them with the exception of New Hampshire require drivers to carry auto insurance policies.

A trusted Bedford insurance agent from the Charles Goodman Group can assist you with any questions regarding automobile insurance or property insurance.

Different states have different requirements in terms of liability minimums and other details, but the fact remains that you must purchase and maintain auto insurance. Consequences of non-compliance include the suspension of your registration or driver’s license as well as various fines and fees.

The majority of U.S. states require drivers to carry no-fault insurance. This makes it easier to sort out legal issues following a car accident. Under this system, payments for damages, losses and injuries are dealt with much more quickly. As the term implies, fault is not assigned; each driver’s insurance company takes care of damages on the client’s behalf.

Though 49 states require drivers to carry auto insurance policies, there’s no federal mandate regarding car insurance. In New Hampshire, you still must be able to prove that you can cover damages in the event of an accident, and most people ultimately do so by purchasing car insurance policies.

Even if you carry enough insurance to remain on the right side of the law, it’s probably not enough. Most states only require liability coverage; collision insurance, which covers damages to your own vehicle, isn’t mandatory. If you only carry the minimum amount of coverage, you’ll be out of luck if your vehicle is damaged in a collision. Therefore, while it’s crucial to obey the law by having the right type of insurance, it’s also critical to go beyond that to avoid serious financial implications in the future.