Automobile liability insurance is required on all vehicles. It is a type of insurance coverage that pays the victim’s damages if someone causes an accident. For example, if you cause an accident, your liability coverage will pay personal injury damages (such as medical bills or lost wages) and property damage (such as car repairs) to the person or people you hurt in that accident. Automobile liability insurance is legally required for several important public policy reasons: it protects victims and society from having to bear the burden of your careless driving, and it encourages citizens to be safe drivers. Ofcourse there is a probability that the risks would lead to low auto insurance rates as there is a tendency for such minimal effects which are inversely affecting the claim settlement.
How Does Automobile Liability Insurance Encourage Safe Driving?
Because automobile liability insurance is legally mandated, every person who wants to drive a car must purchase it. Failure to do so can result in the inability to buy or register a car. It can also result in you having your vehicle impounded, in you being assessed a fine, or even in you being sentenced to jail time. Just keep in mind the importance of comparing various quotes for insurance whenever the need of a new insurance policy is felt.
Liability insurance is offered primarily by private companies, so every person that wants to purchase it must pay the market price. This market price comes in the form of premiums. Premiums are determined by your driving record, among other things. A good driving record with few accidents can result in lower premiums. A poor driving record, a history of DUIs or moving violations, or a series of accidents, can cause premiums to go up. In some cases, premiums can become prohibitively expensive and/or private companies may decline to insure you and you may be forced to participate in your state’s Assigned Risk plan to buy liability insurance at a very high cost.
As a result of the risk of increased premiums due to accidents or poor driving, many people drive more cautiously. An accident or traffic ticket can increase premiums for years to come, costing a person thousands of dollars in extra payments to penalize poor driving. This penalty creates a disincentive to get traffic tickets or otherwise engage in behavior that will raise insurance premiums.
Furthermore, in order to lower automobile liability insurance premiums, many individuals opt to take drivers education courses or defensive driving courses, since completion of this type of educational program will result in lower premiums. Moreover a car insurance will be vital to help you and your family in an unforeseen circumstance, it is always to be prepared. Thus insurance creates incentive for positive driving behaviors will penalizing negative driving behaviors.
While there are plenty of other incentives for driving well, such as possible police action or the desire to avoid an accident, automobile liability insurance laws are simply one more reason why citizens may think twice about making careless driving moves.
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