Auto Insurance In The US: Five Facts You Probably Never Knew

Every year millions of Americans purchase auto insurance for their vehicles. Most folks don't think much about it, but in addition to being a relatively new idea, car insurance has some interesting facets you might want to know about. Read on to learn about how auto insurance developed and how it may affect you.

The Early Days

While the first car insurance policies were issued as far back as the late 19th Century, it was the increase in cars on the road after World War I that spurred the real growth of the automotive insurance industry. Drivers needed a way to collect damages from people who were at fault in accidents--a new aspect of tort law. These drivers couldn't always be counted on to pay out of their own pockets.

While many states began making auto insurance available to drivers, Massachusetts was the first state to implement compulsory insurance laws--and compulsory insurance is still a subject of debate today.

State Variations

Since the dawn of insurance, US states have always had very different takes on how insurance should be regulated. Neither New Hampshire nor Virginia, for example, require auto insurance. However, New Hampshire drivers must prove they are capable of paying in case of an accident, and Virginia residents have to pay an uninsured motorist fee. Of course, people in those states can still purchase insurance should they want to.

South of the Border

While your US auto insurance covers you in all 50 states, regardless of where your car is registered, it will not cover you should you decide to travel south of the border to Mexico. Residents of border states often travel to Mexico to vacation or conduct business. They must purchase separate Mexican vehicle insurance for use while out of the States.

These policies can be easily and inexpensively obtained online, as well as in the US towns along the border. If you are renting a vehicle and heading to Mexico, be sure to add Mexican coverage. Be aware that not all rental vehicles are allowed to travel south of the border, especially luxury models and SUVs.

Credit History and Premiums

Did you know that your credit history can affect the cost of your car insurance premium, even if you have a great driving record? Be sure to ask your carrier if your credit is affecting your policy, and consider asking to be re-rated if poor credit, lack of credit, or mistakes in your credit report have driven up the cost.

Safety on the Road

In spite of the tremendous increase in vehicles on the road today compared with 100 years ago, statistically there has been a 90% decrease in fatalities in the last century. This is largely due to improvements in motor vehicle safety, use of vehicle restraints, and more stringent licensing requirements.

While it may be tempting to forgo insurance based on the above statistic, remember that most states still require insurance, including liability coverage. Traffic remains a huge problem in many urban areas, and the almost obligatory use of the automobile in American life continues to drive both safety and insurance issues. Although in the US much has changed in the last 100 years, the age-old saying still applies: "Better safe than sorry."

Talk with an insurance agency, like H and M Insurance, to learn more interesting tips about auto insurance.