Go back fifty years, America was very different. This was a country in which our lawmakers could confidently pass financial responsibility laws, knowing we would all accept the need. As the economy began its steady expansion after the end of the World War II, therer was the explosion in the number of vehicles on our roads. With technology still developing, suspension systems and brakes were primitive, so there were a rising number of accidents. States decided to mandate every driver to carry a minimum amount of insurance. Back then, almost all states were at-fault, i.e. they relied on the courts to apply the law of tort. Any driver found negligent would be responsible for paying the cost of all repairs and medical treatment. Since not everyone carried such large sums in their bank accounts, everyone carried liability insurance. That way there would always be some money available to pay whoever you injured by your bad driving. Even though some states have changed to no-fault insurance, the reasoning stays the same. Even though you are insuring yourself, it’s still better to have the money from the insurer than be forced to go even further into debt to pay for your own treatment and vehicle repairs.

In other countries where similar laws apply, there are provisions to increase the minimum amounts in line with inflation. That way, there’s always enough money to pay for most, if not all, the repairs and treatment. Put another way, lawmakers who thought the law a good idea, thought it an equally good idea to keep the value up-to-date. But not in our country. Our lawmakers made their laws in fixed amounts. The result is rather alarming. If you take $1 in 1960, it would take $7 in today’s currency for the same buying power. Now think about a mandatory minimum of $15,000 for medical expenses set in 1960. That should be $105,000 today and, even that amount would struggle to pay for anything more than routine treatment for relatively minor injuries. Yet when lawmakers debate increasing the mandatory minimums today, no one talk about even doubling the old values. The brave representatives talk carefully about ten or twenty percent increases, and duck for cover when the howls of outrage come from their electors.

Auto insurance quotes for the mandatory minimums have been rising faster than the rate of inflation because an increasingly large percentage of drivers now fail to insure. With fewer drivers sharing the total cost of loss, the premium rates must rise. This produces an ironic result. Because more people refuse to pay higher premiums, the premiums rise. When the premium rates rise, more drivers refuse to pay. This leaves us with about 20% of drivers uninsured and the majority underinsured. If you have the money to pay the premiums, everyone now buys uninsured/underinsured coverage. With no sign of effective enforcement for the mandated coverage, the number of uninsured drivers will continue to rise and the auto insurance quotes for the law-abiding will continue to rise. In such times, no one will talk about increasing the minimum amounts for liability coverage.

In theory, the world is all about fairness. Whether you come at the issue as a Christian with everyone equal in the eyes of the Lord or you subscribe to more liberal views based on human rights, everyone should get a fair shake. Except, the world is far more dog-eat-dog with only the strong able to get what they consider to be their rights. So, against this background, here’s a simple question for you. What should we do with the people who refuse to buy the minimum liability insurance cover? For now, we will look the other way on the unemployed poor who literally cannot afford it. The morality is different. We will assume there are people who have the money but, for whatever reason, refuse to pay their way. Well, in all but three states, it’s a criminal offense to be on the public roads with an uninsured vehicle. If such drivers are caught, the usual punishment is a fine. It’s all part of the pattern of financial responsibility laws and, in most cases, people are not to drive again until they produce evidence they have valid insurance. In the “hardline” states, the fines can be high and, if not paid, the vehicle can be confiscated. Indeed, a few states confiscate the vehicle anyway.

This all sounds great except for one small detail. All the states could link up all the databases run by the various government departments, the police and the insurance companies. So, at any moment, it would be possible to see whether a vehicle was insured. This would make enforcement of the mandate straightforward. The licensing authorities and police would have a list of everyone with an uninsured vehicle. Tow trucks could tour the streets collecting those vehicles from their homes or the police could pull over any vehicles found on the road. As it is, most states do not give the police access to the insurers’ systems. Whenever a vehicle is pulled over, there’s no way to tell whether there’s insurance in place. This means there’s a very good chance people will not be caught and/or prosecuted.

So a small number of states have introduced a “no pay, no play” rule. In the usual tort states, a driver not at fault has the right to sue for the full range of damages. But in Alaska, California, Iowa, Louisiana, Michigan, New Jersey, North Dakota and Oregon, the uninsured driver cannot sue to recover all heads of damages from the at-fault driver. The idea is that if you do not pay the same premiums as the honest driver, you should have no right to claim the full compensation. Four other states are currently considering amendments to their laws which would introduce similar rules.

It’s interesting to see some states take up the notion of fairness when it comes to carrying insurance. This might be slightly harder on the driver who genuinely cannot afford to pay even the cheapest car insurance quotes, but it certainly feels like justice for the willfully uninsured driver. He or she should never be in a better financial position than those who accept and pay the best of the auto insurance quotes.

You’re going to the dealer to get a new vehicle, and it’s definitely a good day to remember. However, not all drivers remind of their auto insurance obligations before switching vehicles, and this can be quite complicated if you don’t take the measures early. This is especially important if you’re buying your first vehicle and never had auto insurance before.

Those car owners who already have insurance policies for their vehicles usually have a period of 14 to 30 days depending on the state, during which the coverage is spread on your new vehicle after purchase. Some providers can even offer a longer period to inform them about your new car, so it’s always better to check the rules at your particular provider.

However, insurance experts recommend analyzing your insurance coverage before actually going to the dealership for the new vehicle, in order to make sure your policy has the necessary coverage amount for the new car. Otherwise, you may end up gambling during the transition period and if something happens on the road, it will be quite an unpleasant surprise to learn that your old policy is insufficient for covering the new ride. In most states the coverage remains the same when you’re changing the vehicle, and this can be quite uncomfortable if you didn’t have collision or comprehensive coverage with your old auto and now need it for the new vehicle. So paying your insurance agent a visit becomes really important in such a situation.

In case if you don’t have an auto insurance policy when buying a new vehicle, in some dealerships you won’t be able to drive the car off the lot. This certainly applies if you’re using an auto loan. Moreover, when the dealer finances your purchase you my be obliged by the contract to purchase a specific amount of coverage from a particular insurer, which might be not the most competitively price offer you would get when comparing auto insurance quotes.

So it’s particularly important to consult with your insurance agent or broker before making the purchase in order to assure that your new car is covered properly. Don’t expect the insurance provider to do all the work for you even if you’ve decided to stay with the same policy after the purchase. You will still have to inform your provider about the purchase and tell all the specifications of the new car for the record. If you’re buying your new car on the weekend, most insurance providers have 24/7 contact numbers that you can call to inform about the purchase, so don’t lay it off, otherwise you can get in trouble if your provider finds out about the purchase only when you’ve filed a claim.

For those who are buying the new car using own money, getting car insurance quotes before the purchase is a must. Insurance companies have different claim history across car makes and models, and if your previous policy was very competitive for your old car, this doesn’t mean that your rates will be as good for the new vehicle. If you manage to find really attractive car insurance quotes for the car you are looking forward to buy, it’s reasonable to switch providers because there’s no sense in overpaying for redundant coverage, right?

In Europe there are a lot of safety options for cars that feature both standard and additional equipment. But it’s not the same in the US. What are the reasons for that? Some insurance specialists think that it’s the lack of tort reform that puts auto insurance in the US into such a situation.

But what is a tort reform in the first place and what it has to do with auto insurance? Tort reform is a general term that refers to a change in the US civil justice framework that is required to provide a limitation of tort litigation and damage. If the reform will be applied then the negative effects litigation has on the economy will be significantly reduced.

In order to make the significance of this reform a bit clearer, here’s an example. There are a lot of advanced technologies available for installing into your vehicle. Things like side curtain airbags, special glass, obstacle detection systems, rear camera system, advanced seat belts and numerous other features are very common in the European market and often come as a standard setting for new vehicle. But even if this equipment is made in the US, it is still exported since it’s not that simple to introduce these features into American cars. But why is that so, you might ask? Well, it may come as a surprise for you put if studying the question in details it turns out that our own court system and litigious society are the main reasons for these technologies to have a hard time penetrating the domestic market.

The thing is that installing these add-ons into a typical car automatically gives a possibility for litigation, so it’s much simple for the auto dealers and auto insurance providers to neglect these features than try to seek regulations in the legislation. That is why the tort reform is required to modify the legal system itself, and this will allow for new technologies to be introduced to the market faster and much easier than now. Who will want to provide coverage for such an auto when the customer can sue the company for not providing a regulatory base and failing to cover such equipment to the right extent? Of course, no-one.

The U.S. Class Action Fairness Act of 2005 may be a good step towards an overall tort reform since it transferred class-action lawsuits from the jurisdiction of state courts, which eliminates a large part of state litigation. There are two major points that tort reform advocates see in this Act:

1. Lowers the risk of an out-of-state defendant to face excessive verdicts, and reduces the amount of settlements that can be otherwise exceeded by local venues.

2. Introduces new procedures for reviewing coupon settlements, reducing attorney’s fees that can be often labeled as “excessive”.

This Act thus significantly lowers the litigation amounts and can ultimately lead to a decrease in auto insurance rates. Nevertheless, there’s a need in a real tort reform for the auto insurance industry to work more effectively and allow new technologies to be introduced without the risk of court trials from unhappy customers.

Those who have spent years studying to become economists would have us believe that this is a science. They crunch numbers and come up with wonderful plans they believe will save the world from its current or next crisis. Unfortunately, science always fails when it comes to trying to understand human behavior. The psychology of large numbers of individuals is difficult to model. Who knows why people spend like there’s no tomorrow once minute and stop spending the next. Some will be bankers with several million in bonuses, another group will be in work with a range of pay, and then comes an average of about 9% unemployed. The fact that there are one or two percent changes in the rate of unemployment should not affect consumer confidence. Yet, over the last two years, we have seen banks go bust, waves of foreclosures ripple across America like a tsunami and people suddenly decide they need to be as frugal as their Protestant forebears fresh off the Mayflower.

One of the consequences of this desire to pay down debts during the recession has been the rise in insurance rates. This is easy to explain. When family budgets come under pressure, people decide how they are going to spent the little they have. An increasing number have decided to come down to basic liability cover on their vehicles or drive without insurance. Despite the legal risks, the average percentage of uninsured or underinsured drivers on our roads is now approaching 20% in some states.

We now need to go back to the basics of insurance. The insurer estimates the value of the claims likely to be made in the next twelve months and divides that cost among all those paying premiums. If the value of the claims stays the same but more people decide not to pay premiums, this forces a rise in the amount paid by the honest. Worse, as the risk of being involved in an accident with an uninsured driver rises, more people have to buy coverage to protect themselves. Under normal circumstances, if someone crashes into you in an at-fault state, there’s a claim against his or her insurer. Even the basic liability minimum is better than nothing. But if there’s no insurer, who pays for your medical expenses and for the repair of your vehicle? Without uninsured cover, all that money has to come out of your own pocket.

Life can be very unfair and, when people are in financial trouble, it would be hard to expect them to give up their personal transport. American cities have not been designed with pedestrians in mind. But unless the mandatory liability insurance laws are enforced, all the honest drivers will end up paying more for their insurance. When the majority are being penalized by a minority, something should change. Otherwise, every time those auto insurance quotes come into your inbox, you will see rises. The Constitution does not say everyone is free to pick and choose which laws they will obey. If we want to see the return of cheap car insurance, we should see all mandatory laws properly enforced.