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Why is Car Insurance Mandatory in the United States?

We know that cars and insurance often go hand in hand, but have you ever asked yourself why that is? Many of us may have asked this question to ourselves (often times while paying off our car insurance bills). While our country is currently debating its stance on health insurance, we naturally accept that whenever we purchase a car, we must also insure it.

However, contrary to what we assume, there is actually no federal laws mandating that all drivers must be insured. Instead, liability laws are established at the state level, and each state has its own set of rules and standards.

The history of car insurance goes back a hundred years, when the first automobile appeared on the U.S. markets. Even back then, road accidents were an unfortunate, but factual, part of driving. As a result, state law makers started creating mandatory car insurance laws as a solution to defaults on accident-related payments. Since then, nearly every U.S. state has enacted its own set of car insurance laws (except for New Hampshire, which only requires that drivers just need to prove that they can pay for any accident expenses).

It is important to note the slight difference between collision insurance and liability insurance: the former protects you, the car owner, and is not necessarily mandatory (but may be beneficial if you can afford the full coverage). The latter, however, is mandatory because it involves protecting others – that is, ensuring that other people will not experience any damages or losses. The underlying basis is tort law, which holds a person liable for any harm he/she causes others, especially in an enhanced risk activity like operating a vehicle. This fact alone may be enough of a reason to invest in an insurance coverage plan.

Learning about your state’s specific car insurance liability laws may be of great benefit, especially when deciding which insurance plan is right for you. Many insurance agencies, such as Freeway Insurance, will also work diligently to locate the best insurance quotes and coverage for your specific needs.

If you have any additional questions regarding this matter, feel free to leave a comment below or contact your local Cost-U-Less Insurance representative and they will gladly assist you!

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