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Is Car Insurance Mandatory? CARCHEX Answers

Why is car insurance mandatory anyways? Except for a few exceptions (see below), car insurance is required for every motor vehicle. But not all types of insurance are mandatory. Let’s look at the details and some history.

Crashes Are Old News

No matter what, accidents happen. Even back in the early days of automobiles, lawmakers saw this as a potential problem. The damage caused by car crashes costs money. Insurances were set up as pools of money to cover these costs. In 1925, Massachusetts and Connecticut were the first states to implement compulsory insurance. By 1970 nearly every state adopted mandatory auto insurance laws.

Does It Make Sense To Have Car Insurance?

If you are involved in a serious accident, the costs can be very high. In the event of personal injury, the medical bills can total up to many thousands of dollars. Car insurance not only gives you financial protection, but also peace of mind. Get a free online auto insurance quote from CARCHEX now.

What Type Of Insurance Is Mandatory?

Liability insurance covers you when you are at fault – that is – it pays the bills for damages to the other party. Liability insurance is mandatory in most states by law.

Collision insurance protects you from fire, theft, vandalism, etc. Collision insurance is not mandatory if you don’t owe anything on the car. Cars that are leased or financed may be required to carry collision insurance. Most people carry some amount of collision insurance on their car.

Which States Don’t Require Car Insurance?

In Virginia, uninsured cars must pay an uninsured motor vehicle fee. Mississippi lets motor vehicle owners post cash bonds instead of carrying auto insurance. In New Hampshire, if you can prove that you can pay for damages then you can opt out of car insurance. In any case, car owners have to pay or show some money against the risk of accident. Even in states that do not require car insurance, the majority of motorists carry coverage.

Don’t Overpay, Reduce Your Premium

What doesn’t make sense is to pay too much for car insurance. Find the coverage that is right for your situation, and don’t be afraid to shop around. Plus, there are ways to reduce your insurance costs such as having a safe driving record. Also, added safety measures like airbags and anti-theft devices can lower your insurance premium. You can also opt for a higher deductible to reduce your monthly payments. Teen drivers that complete a driver’s education course can also enjoy lower car insurance rates.

Get A Quote Now

In most states, car insurance is required by law. Let CARCHEX find you the best car insurance for your needs. Get a fast, free online auto insurance quote now.

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