Car insurance in the USA is required in all 50 states, including Washington the District of Columbia. A liability policy is the basic tenet for all drivers, which covers any damages in the event of an accident and you are at fault, as well as to pay for legal responsibilities to others. Twelve states mandate drivers to purchase no fault insurance, which compensates drivers regardless of who was at fault in an accident, unless the injuries are too serious.
The first car insurance in the USA was purchased by Gilbert J. Loomis, in 1897, Dayton Ohio. He purchased a liability insurance policy in the amount of $1,000 to protect himself iin case he were killed or if he injured another driver or damaged their properly. The invention of the automobile in the late nineteenth century began a necessary requirement to protect car owners from financial loss in the operation of this new motorized vehicle.
Auto insurance is simply a contract between drivers and their insurance company. Car owners pay a premium and the insurance company guarantees to pay any losses as agreed to in their policy. The insurance policy carried on automobiles, also includes medical coverage to pay for injuries, rehabilitation, lost wages and funeral expenses. Property coverage is also part of the insurance package, which pays for damage to your car or in the event of theft.
A 2014 J.D. Power–U.S. Auto Insurance Study, reported that premium rates are increasing, but that car owning insurers has increased. The study was based on customer satisfaction, using five factors, which included price, customer interaction, policy offerings, billing, claims, and payment. J.D. Power has conducted this type of study since year 2000, where satisfaction among car owners was considered low. However, the recent percentage of car owners experiencing premium increases, did not pursuade them to leave their respective insurance companies, instead they are remaining with their carriers, rather than shopping around.
Car insurance companies in the USA are regulated primarily by individual states. There are no federal regulatory agency that oversees auto insurance companies. Each respected state is headed by a state government official, namely known as the “Commissioner,” or a similar title and who is an elected official in some states while other states appoint their oversight head by a Governor.
United States auto insurance is extremely comprehensive when compared to other international countries. Drivers are also encouraged to look for discounts which can include:
- > discount for having multiple policies with a specific carrier
- > discount for going paperless
- > educational discount for students
- > discounts given by organizations through their membership program
- > discounts for taking defensive driving courses
- > discounts for special car equipment, like anti-locking brakes, etc.
- > military discounts.
Speaking of comprehensive, there is an auto insurance coverage by the same name, which will reimburse owners if their car is stolen or damaged by mother nature disasters like falling objects, fire, colliding with animals, earthquakes, hail, and tornadoes. Also, comprehensive insurance covers broken or cracked windshields. Comprehensive coverage also carries a deductible of $100 to $300, which can lower premium rates. To help car owners choose a reliable insurance carrier, each state has an online, comparative shopping list for companies with competitive rates. Overseas such as New Zealand you may need to do a bit of digging online to find out what policies they need to legally driver on the roads.