Drivers who get pulled over and caught without car liability insurance can be issued a traffic ticket for violation of their state’s mandatory insurance law. Besides a traffic ticket, they can also suffer suspension of their driving license, asked to pay costly fines and be required to carry an SR-22 filing to have their license and driving privileges reinstated.
Other than the need to be able to present their insurance card when asked by a traffic enforcer, drivers also need to show proof that they carry car liability insurance whenever they renew their license and car registration. What millions of drivers do, however, is immediately cancel their policy or stop paying premiums after they have accomplished their registration needs; thus, besides having their license renewed, they also free themselves from the burden of paying costly premiums and still get to keep the insurance card which they can always show to traffic enforcers whenever it is asked of them.
Except in the state of New Hampshire where drivers only need to show their capability to provide sufficient funds in case of an at-fault accident, or in Virginia, where a driver can register an uninsured car on the condition that he/she deposit cash or securities with the state’s Department of Motor Vehicles (DMV), all the other 48 US states mandate carrying car liability insurance.
Depending on the state where a driver resides, he/she must carry either tort car liability coverage in tort-states or the no-fault car liability coverage in no-fault states.
In tort states, the car accident victim can file a civil lawsuit against the at-fault driver. The amount of compensation that the victim is legally entitled to receive, which usually covers medical treatment, lost wages, pain and suffering, will be paid by the at-fault driver’s insurance provider. There are 38 states where this type of insurance coverage is mandated.
In no-fault states, which include of Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota, and Utah, the insurance provider pays its own policy holder in the event of an accident, regardless of whose fault the accident is. Due to this, the driver who claims to be the victim in the accident need not file any lawsuit against the at-fault driver, making payment of compensation faster. (The states of Pennsylvania, New Jersey and Kentucky allow their drivers to choose which coverage they would want to carry, either the no-fault car insurance or the full tort car insurance.)
For extra protection of those in tort states, however, due to the millions of uninsured drivers who continue to drive on US roads and highways, states also require their drivers to carry Uninsured/Underinsured Motorist Coverage.
Uninsured motorist coverage covers accident victims’ economic losses and damages in accidents wherein: the at-fault driver does not carry auto liability insurance; the vehicle used by the at-fault driver was stolen; or the accident is a case of hit-and-run. Underinsured motorist coverage, on the other hand, is designed to supplement the at-fault driver’s policy, the amount of which is not enough to cover costs of all covered losses.
Though states require only the minimum liability limit for auto insurance, millions of drivers still find insurance policies too costly to maintain. Insure on the Spot, an independent car insurance company, says, however, that drivers need not be tied to paying expensive premiums. Many firms like itself help drivers find the best insurance deal that is within their budget. Moreover, the auto insurance quote provided by these firms is comprehensive and perfectly helpful, besides being free; drivers can also ask for quotes online.