The “Tort” and the “No-fault” Insurance Liability Systems

Carrying auto liability insurance is a mandate in the U.S. Thus, whether you drive a car or a truck and regardless of the kind of driving history you have, you will have to be insured. Being insured is complying with the Financial Responsibility law, the law which requires drivers to prove their financial capability in paying the damages and losses suffered by victims of accidents due to their fault. Other than having insurance coverage, compliance with the Financial Responsibility law may also be done by demonstrating financial capability in ways approved by the state, like: depositing securities or money with the state treasurer or filing an SR-22, which is the case in the state of New Hampshire; or paying the state’s Department of Motor Vehicles (DMV) the required uninsured motor vehicle fee, a practice allowed in the state of Virginia.

Where drivers decide to carry auto insurance, the type of coverage they need to carry depends on the liability system recognized in the state where they reside. Currently, 38 states, also known as “tort” or “fault” states, require the tort liability coverage; the remaining 12 states, also known as “no-fault” states, require the “no-fault” insurance coverage. The 12 states where this “no-fault coverage” is required are Utah, New York, North Dakota, Massachusetts, Michigan, Minnesota, Kansas, Hawaii, Florida, Pennsylvania, New Jersey and Kentucky; drivers in Pennsylvania, New Jersey and Kentucky are actually allowed to choose which coverage they want to carry.

Drivers, especially those who cause accidents, can lose their driving privileges and be required to carry an SR-22 filing if they are found without insurance coverage. An SR-22 is a certification required by the state’s Department of Motor Vehicles (DMV); its purpose is to inform the state DMV that the driver who has been required to carry an SR-22 filing is already insured.

Despite carrying auto liability insurance being a basic driving requirement, millions of drivers in the U.S. choose rather to drive without insurance, saying that insurance policies are too expensive. According to Abel Law Firm, while independent car insurance companies know this to be a fact, they also say that driving without insurance can be much more expensive, especially if the uninsured driver ends up causing an accident. Independent car insurance firms, by the way, offers drivers free online insurance quotes from different insurance companies. These quotes are meant to allow drivers compare insurance deals and prices to help them find the best, yet lowest-priced deal that they need to have.


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