United States edit
In the United States, automotive insurance covering liability for injuries and property damage is compulsory in most states, but different states enforce the insurance requirement differently. In Virginia, where insurance is not compulsory, residents must pay the state a $500 annual fee per vehicle if they choose not to buy liability insurance.[1] Penalties for not purchasing insurance vary by state, but often include a substantial fine, license and/or registration suspension or revocation, and possible jail time. Usually, the minimum required by law is third party insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.
California and New Jersey have enacted "Personal Responsibility Acts" which put further pressure on all drivers to carry liability insurance by preventing uninsured drivers from recovering non economic damages (e.g. compensation for "pain and suffering") if they are injured in any way while operating a motor vehicle. [2]
Some states, such as North Carolina, require that a driver hold liability insurance before a license can be issued.
Some states require that insurance be carried in the car at all times, while others do not enforce this law. For example, North Carolina does not specify that you must carry proof of insurance in the vehicle; however, North Carolina does state that you must have that information to trade with another driver in the event of an accident.
Arizona Department of Transportation Research Project Manager John Semmens has recommended that car insurers issue license plates and be held responsible for the full cost of injuries and property damage caused by their licensees under the Disneyland model. Plates would expire at the end of the insurance coverage period, and licensees would need to return their plates to their insurance office to receive a refund on their premiums. Vehicles driving without insurance would thus be easy to spot because they would not have license plates, or the plates would be past the marked expiration date.[3]
A recent study linked an increase in food stamp use to insurance premiums.[4]
Insurance for Financed Vehicles edit
One common misconception in the United States is that vehicles that are financed on credit through a bank or credit union are required to have "full" coverage in order for the financial institution to cover their losses in the case of an accident. While most states do require additional coverage to be purchased, some such as Pennsylvania only require Comprehensive and Collision to be purchased in addition to liability and not "full" coverage. Vehicles bought on cash or have been paid off by the owner are generally required to only carry liability. In some cases, vehicles financed through a "buy-here-pay-here" car dealership--in which the consumer (generally those with poor credit) finances a car and pays the dealer directly without a bank--also only require liability coverage. [CITATION]
Requirements by State edit
The tables below contain liability limits for almost all states within the United States. See the table to the right for an explanation.
Compulsory States edit
| State[5] | Insurance Requirements[5] |
|---|---|
| Alabama | 20/40/10 |
| Alaska | 50/100/25 |
| Arizona | 15/30/10 |
| Arkansas | 25/50/15 |
| California | 15/30/5 |
| Colorado | 25/50/15 |
| Connecticut | 20/40/10 |
| Delaware | 15/30/5 |
| Florida | 10/20/10 |
| Georgia | 15/30/10 |
| Hawaii | 20/40/10 |
| Idaho | 20/50/15 |
| Illinois | 20/40/15 |
| Indiana | 25/50/10 |
| Iowa | 20/40/15 |
| Kansas | 25/50/10 |
| Kentucky | 25/50/10 |
| Louisiana | 10/20/10 |
| Maine | 50/100/25 |
| Maryland | 20/40/10 |
| Massachusetts | 20/40/5 |
| Michigan | 20/40/10 |
| Minnesota | 30/60/10 |
| Mississippi | 25/50/25 |
| Missouri | 25/50/10 |
| Montana | 25/50/10 |
| Nebraska | 25/50/25 |
| Nevada | 15/30/10 |
| New Hampshire | 25/50/25 |
| New Jersey | 15/30/5 |
| New Mexico | 25/50/10 |
| New York | 25/50/10 |
| North Carolina | 30/60/25 |
| North Dakota | 25/50/25 |
| Ohio | 12.5/25/7.5 |
| Oklahoma | 10/20/10 |
| Oregon | 25/50/10 |
| Pennsylvania | 15/30/5 |
| Rhode Island | 25/50/25 |
| South Carolina | 25/50/25 |
| South Dakota | 25/50/25 |
| Tennessee | 25/50/10 |
| Texas | 20/40/15 |
| Utah | 25/65/15 |
| Vermont | 25/50/10 |
| Washington | 25/50/10 |
| West Virginia | 20/40/10 |
| Wisconsin | 25/50/10 |
| Wyoming | 25/50/20 |
Non-Compulsory States edit
| State | Insurance Requirements |
|---|---|
| Virginia | 25/50/20 or Surety Bond or $500 uninsured M/V fee.[1] |
Links edit
Mandatory Car Insurance Laws - Fines and Penalties for Not Insuring your Auto?
Why Do We Have Mandatory Auto Insurance?
"Most states mandate coverage, penalize those without insurance, and then lean on insurers to keep the rates low"
"Negative externality caused by uninsured motorists"
Economic Downturn May Push Percentage of Uninsured Motorists to All-Time High (PDF)
- ^ a b "Virginia Insurance Requirements". Virginia Department of Motor Vehicles. Retrieved 2011-03-10.
- ^ "Personal Responsibility Acts". ADI News. Retrieved 2011-03-23.
- ^ Semmens, John. "Improving Road Safety by Privatizing Vehicle and Driver Testing and Licensing". Street Smart: Competition, Entrepreneurship and the Future of Roads.
- ^ "Food Stamp Study". Retrieved 2011-03-29.
- ^ a b c "Insurance Requirements in the United States". Retrieved 2011-03-22.