No matter what other insurance you might or might not be lacking, you probably have car insurance – the most widely purchased type of insurance coverage. Automobile drivers are required to have car insurance almost everywhere in the world that there are cars or other kinds of autos. It covers damage to your vehicle and to any other vehicles that you might come into contact with.
Car insurance also offers protection for you if you are in an accident and another person is injured, paying at least part of their medical expenses. This is known as liability protection, which can also help to protect you against liability for property damage.
The idea of car insurance is not a new one, and can be traced back to the ancient Chinese, where newly settled colonies often sent cargo ships filled with supplies across the Atlantic Ocean. These cargo ships were often owned by groups of investors, who would sometimes lose their investment when ships were lost at sea or taken by pirates. The Chinese investors would protect their investments by taking out insurance policies known as marine insurance – an insurance type that is still in use today.
When policymakers decided that operating an automobile on public property was a privilege, they also decided to require that motorist purchase auto insurance to protect innocent third parties from injury or property damage, spinning off auto insurance for the existent marine insurance.
Liability insurance was not offered as part of auto insurance until 1895, when the first such policy was written by an English company. The first such policy to come to the United States was written for Dr. Truman J. Martin in 1898.
Though car insurance policies were introduced much earlier, they were first required by law in Massachusetts in 1927. Since then, every one of the United States has adopted a mandatory car insurance law in some form. The individual obligations vary from state to state, but all require minimal liability coverage to protect innocent people.
To find information on car insurance requirements in your state, the Department of Motor Vehicles is an excellent resource. You can also visit the DMV web site to find information on insurance companies. Becoming familiar with the car insurance requirements of your state is important because it helps you carry the appropriate level of coverage. If you do not carry the right coverage, an accident could result in your serving jail time.
Another result of carrying too little coverage is that an accident could cause bodily injury to someone else, and a lack of liability coverage could cost you everything, from your car to your very home. Car insurance is not a luxury. It might seem like an unnecessary precaution if you drive carefully, but a convenient monthly payment is a small price for the security of knowing that if the worst should happen, you will not be liable for the hundreds of thousands of dollars that a settlement could come out to.