Once you purchase a vehicle, it is mandatory that you get some form of auto insurance. Insurance provides a buffer in case your vehicle is involved in an accident with another vehicle or person resulting in injury or property damage.
In the US individual states have the power to legislate on insurance rules and regulations. States have the authority to fix the mandatory coverage levels. 49 states in the US require that you have at least a minimum level of auto liability. The minimum auto liability or auto insurance that you need is to cover damages caused by you in an accident or collision. Most drivers prefer to buy a higher level of coverage, including what is known as uninsured motorist insurance or UMI that provides financial compensation if you are hit by an uninsured motorist.
Auto insurance is essential to safeguard you from any financial loss for damages incurred during an accident. Some states penalize motorists found with no insurance coverage. The state of Virginia fines drivers a sum of $500 if they are caught having no auto insurance. The driver is further forced to purchase coverage. Money is used as a fund to cover damages by uninsured drivers.
Although mandatory in many states, there is a high incidence of uninsured drivers on the road. Statistics from 2009 indicate that as many as one in seven motorists have no coverage. With the failing economy the number of uninsured drivers on the roads can rise. Meeting with an accident caused by one of these uninsured drivers would leave you having to pay your own medical bills. To avoid financial losses and lost wages, you should take adequate coverage to cover expenses in case this should happen to you. With the high number of uninsured motorists on the road the possibilities are quite high.
If a driver has a history of accidents, traffic tickets or DUI, he or she might find it difficult to find insurers ready to provide coverage. Premium rates can be either mandated by the governing body or by the insurers. Insurers take a number of factors into consideration such as the age and gender. They will also screen the driving history and record of prior accidents and other incidents.
A points system is used to assess the drivers’ proficiency levels. The higher the number of points the more likely the driver is to incur future traffic violations and accidents. Insurers must be informed of all past accidents and violations when purchasing auto insurance California residents have to face stiff penalties if caught without insurance.