Auto Insurance Regulations

Driving without insurance is not a beneficial thing to do. Yet people continue to do it, despite the fact that practically every state in the U.S. requires proof of auto insurance. There are specific regulations that differ from state to state, regarding what insurance a driver needs. But at the very least, as Tennessee state law words it, proof of financial responsibility is required to roll out of the driveway.

This does not mean that driving without insurance is a crime punishable by prison. Its up to each state to determine how severely violators of the law will be prosecuted. The punishment may be a relatively small fine, though some fines can total $150.00-$500.00. In some states, it could lead to suspension of your drivers license and your car being impounded. Just because some states might be lenient on insurance offenders elsewhere doesnt mean your state will be lenient with you. The courts mercy is nothing bankable, so it is best to simply follow the regulations as they are. Some states require more than just proof of general insurance. Some require bodily injury as well as property damage liability. Others require the inclusion of personal injury protection and un-insured motorist coverage.

Liability minimums are also set by the state and when listed show three sets of digits such as 20/40/15 (as an example). This means that a minimum of $20,000 per person for injuries is set for accidents that are your fault, a minimum of $40,000 for combined damages, and a minimum of $15,000 for any property damage you cause. These are state minimum liability figures, and most insurance experts actually recommend going with a liability rate higher than the state limit. However, auto insurance regulations are in place to ensure at least a minimum amount of damage is recompensed.

In the U.S. there are currently 12 no-fault states. This general term is used to describe states that do require drivers to carry insurance, but that also place limits on a drivers ability to sue another driver for damages. In a pure no-fault law state, each driver would be compensated by their insurance company up to their policy limit, regardless of whose fault the accident was. This would leave no reason for a lawsuit, and so any further litigation due to auto damage would be barred. However, none of the 12 states adhere to a pure no-fault system. There are gray areas and technicalities, and each of the 12 states use selected parts of the no-fault law and other parts from the standard liability law. Check your local state law to see any specific auto insurance regulations prohibiting lawsuits under certain circumstances.

Every state has different laws that affect insurance and the way you drive. Legislators understand the risks involved in putting imperfect humans behind the wheel of half-ton and larger vehicles. Even those staying below a sixty mile-an-hour speed limit can cause extensive damage with one mistake. They have set up auto insurance regulations to help keep the cost of these mistakes low, so that a person can recover financially as well as physically.

Tristan Andrews is a writer for California Car Insurance.

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