Automobile insurance rules cover a wide range of situations and aspects of insurance and often differ from state to state, as insurance laws are different across the country. While there are aspects of insurance law and custom that are universal, there are a few important areas to be aware of.
Automobile insurance rules concerning international borders are important to understand. In general, if one drives across the border into Mexico or Canada, their American insurance company will exclude or deny coverage for any incident that happens in the foreign country. Both Canada and Mexico have their own versions of insurance for visiting foreign motorists, but the stipulations vary wildly and the coverage is usually very minimal.
Uninsured and underinsured motorist coverage is another area in which automobile insurance rules vary significantly from state to state. Uninsured motorist bodily injury coverage is an optional coverage one can elect to have on their policy which pays for their medical bills when they are hit by a driver who has no insurance coverage. This coverage will also cover additional passengers who are injured when hit by an uninsured motorist. However, the uninsured motorist bodily injury coverage does nothing to fix one’s car when it is damaged by a driver who has no coverage to pay for their negligant act. Some states, such as Texas, allow insurance companies to offer uninsured motorist property damage coverage in addition to the uninsured motorist bodily injury. The property damage coverage will pay to fix one’s car if damaged by a driver who has no insurance.
When it comes to accidents, automobile insurance rules are usually consistent from state to state with one exception. Some states are “no-fault” states, which means that with the exception of rear-ending accidents, the police will not assess fault on accidents and the insurance companies of the various drivers involved in the incident get together and agree on who bears what percentage of fault and pay accordingly. Accidents in which one driver strikes the other from the rear almost always result in the fault being placed on the driver who strikes the other from the rear. The only exception to this rule is when one driver is parked improperly in the middle of the right of way and is struck from the rear. In this case, the parked driver is usually deemed to be at fault.
Insurance rules concerning the subject of prior insurance is one area that is generally the same throughout the nation. If one is applying for insurance, he or she will pay a higher rate if he or she has no existing coverage. In other words, insurance companies charge people with gaps in their coverage higher rates than people who have no gaps, also known as “continuous coverage.” Also, almost all insurance companies review a driver’s record over the past three years for tickets and accidents and over the past five years for DUIs and DWIs.
