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Having an auto insurance primer is good to have handy. While I don’t sell auto insurance, I have worked in insurance law for 30+ years. Now, as a retired attorney, I teach and share about topics like auto insurance. I’m writing this and future blogs on auto insurance for readers who, for some reason, have not previously dealt with auto insurance themselves. They may include recent graduates who have been insured on family cars while living at home, people who have become divorced and their “ex” had handled it in the past, and many others. I hope that all readers benefit from this.

Auto insurance is sometimes called “automobile insurance,” “car insurance” or “motor vehicle insurance.” According to the International Risk Management Association, state laws dealing with auto insurance requirements for vehicles that are operated on the roads of a state often except certain kinds of vehicles. The exceptions are sometimes for bicycles, mopeds, farm equipment, and other types of vehicles. We will not discuss the exceptions, but instead, the broad rules applicable to motor vehicles that are required to have auto insurance.

What is auto insurance?

The simple answer is that auto insurance is insurance coverage on a car, truck or other motor vehicle that does not come within one of the exceptions discussed above. Since insurance law is state-based, the scope of the exceptions may vary by state; therefore, the requirements for auto insurance may also vary by state. Although there are many similarities. you should familiarize yourself with the requirements of your state for the motor vehicle that you have. A good first place to check is by contacting the Department of Insurance in your state (or that where the vehicle is going to be registered, if different). You can find the contact information for your state Department of Insurance. You can also contact the office of the state official responsible for registering motor vehicles (there are typically offices in every county of your state, so it should be easy to find out).

What is auto insurance for?
Like other insurance, auto insurance shifts the burden of a financial loss from the insured to the insurer. That is, subject to the terms of the insurance policy and the amount of insurance, the insurance company agrees to pay a loss sustained by the insured. The risk that is “shifted” and by how much is defined by the policy. A “risk” is generally defined as the likelihood or non-likelihood that an event will occur. In the insurance world risk generally equates with a financial loss.

Why do I need auto insurance?

1. Probably the biggest personal reason that you need automobile insurance is to shield yourself from personal responsibility for damages resulting from an automobile collision. As we will discuss later, the damages can be to your car, to another car, to other property, injury to you, or injury to one or more other people. Different types of auto insurance apply to the different types of damage, but all of them may be included within the same automobile insurance policy.
2. To comply with state law. As discussed above, most all states have car insurance requirements for initial registration and thereafter. If you drive without insurance, you can be fined, your vehicle impounded or in some cases, your driver’s license and registration suspended.
3. To satisfy the lender if you owe money on your car. The lender will want to make sure that the car is insured so that it can be fixed if it is damaged in a collision. This is because the value of the car secures the loan. If you don’t keep the insurance in force, the lender will place insurance on it to secure it’s interest. The premium for that insurance will be added to your indebtedness on the car; the insurance premium will be far greater than had you maintained it yourself.

Call The Insurance Problem Solver

Regardless of the type of insurance you have, when there’s a problem, I am here to help you navigate the complexities of the insurance world. I do not give legal advice, but I was a practicing attorney so my expertise is earned. We can have a initial phone call if you need a bit of help. I want to alleviate your headache![/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]