New Hampshire and Virginia are the only two states that allow their drivers to show financial responsibility through state-allowed means in lieu of having car insurance. In New Hampshire, it is enough that drivers deposit cash or post a bond with the state to be able to comply with the state’s Motor Vehicle Financial Responsibility requirements; in Virginia, on the other hand, drivers may simply pay the uninsured motor vehicle fee to their state’s Department of Motor Vehicles.
Financial responsibility refers to a driver’s capability to pay for damages in the case of an at-fault accident. In the US, the most common way to prove this capability is by purchasing car liability insurance.
The type of auto liability insurance required of drivers depends on what is mandated by their state. There are, however, two major types of insurance policies: the tort insurance coverage and the “no-fault” insurance coverage. Tort insurance coverage, which is mandated in the 38 tort states, allows victims of accident to bring legal charges against the at-fault driver. The purpose of these legal charges is to seek compensation which will cover cost of medical treatment, loss of income, and pain and suffering. Compensation is to be paid by the at-fault driver’s insurance provider.
In no-fault states, however, compensation is paid by the respective insurance providers of the drivers involved in the accident, regardless of whose fault the accident is. Without the need to seek compensation from the at-fault driver, no lawsuit, therefore, needs to be filed by the victim. There are nine states where the no-fault coverage is required: Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New York, North Dakota and Utah. The remaining three states of Pennsylvania, New Jersey and Kentucky also recognize the no-fault coverage; however, these states allow their drivers to purchase the tort policy if they rather choose to.
According to the Insurance Research Council, millions of drivers rather choose to discontinue paying their insurance premiums after they have renewed their driver’s license and car registration. This is more costly and risky. If drivers really need to have coverage but do not want to pay for an expensive policy, then they can ask any independent car insurance firm for insurance quotes. These quotes are intended to help drivers find the rate that best suits their budget and individual coverage needs. Besides being truly helpful and effective, these quotes are also free.Read More