Auto insurance is governed by the state laws. The state laws have mandated certain auto coverage to ensure safety of the community. Hence, if you want to continue with the privilege of driving in your hometown, you should learn the state auto insurance laws by heart.
The auto insurance laws of America vary widely, but still can be categorized as the following,
The tort state:
Tort defines the injuries that are eligible to receive compensation under the law. In a tort state, one party is identified as the responsible party for the accident and is liable to compensate the sufferers for their losses.
A tort state can further be categorized as full tort and limited tort. In the limited tort state, the recipient cant claim compensation for the pains and sufferings from the party responsible for the damages, until and unless he suffers permanent disability.
The no-fault state:
The no-fault state requires the drivers to carry insurances for their own protection, since it imposes restrictions upon the ability to sue the responsible driver.
Under the pure no-fault law the drivers are covered under their own plans respectively and will receive coverage irrespective of their responsibility for the damages.
However, no state follows the pure no-fault status, and thus leaves the opportunity for the involved parties to sue the other to recover a portion of their damages.
The add-on no-fault state: The add-on no fault state allows the victim to collect the benefits under the responsible partys bodily injury liability coverage, once his medical expenses exceeds the PIP coverage limit.
The doctrine of comparative negligence Some states follow the theory of comparative negligence, where the responsibility of an accident gets distributed amongst the parties involved in it. This doctrine restricts one party to hold the other party fully responsible for the damages caused to him.
In the states following the doctrine of comparative negligence, the party contributing more than 50% towards the damages caused in the accident, is the party at-fault.
The issue of liability
All the states require the drivers to carry at least the minimum liability coverage and that is to ensure the safety of the community around the driver. The state law makes sure that the driver has adequate coverage to compensate for the damages caused by him to others.