TheHistoryOf.net

Most of us see car insurance as an annoying expense that invades our mailbox once a month. But have you ever thought about why car insurance exists at all?

In The Beginning

The first car insurance policy was written back in 1898, and was adapted from an insurance policy for shipping cargo at sea. It wasn’t until 1927 that the first state began requiring car insurance for automobile drivers: Massachusetts.

Since then, all 50 states have adopted similar requirements for car insurance. Types of coverage requirements vary, and policies can include:

• Medical coverage of the insured party (medical payments)
• Physical damage to the insured vehicle
• Medical coverage for third party individuals
• Damage to other property
• Fire and theft
• Medical coverage for other persons in the vehicle

Why Require Car Insurance

AAA reports that property damage and medical expenses from automobile accidents in America totals over $164 billion dollars annually. This is more than the entire cost of the United States Military. Without a reliable mechanism for handling these costs, the economic drag on individuals, and the country as a whole, would be massive.

Automobile insurance spreads relatively minimal costs across all automobile drivers, rather than expecting only the individuals who are in car crashes to pick up the tab. If all costs associated with a car accident were assessed to a single individual, that individual might decide to go bankrupt rather than pay these large costs.

By spreading the risk with insurance premiums, everyone agrees to pay a small amount toward the total national cost of automobile accidents annually.

Finding the Right Insurance

The best way to minimize your exposure to these costs is to keep from getting in an accident! However, sometimes trouble finds us, and we all make mistakes, so making sure that we have a car insurance policy that fits our needs, and does not provide us with options or services we do not require, is of utmost importance.

To find the right policy for you, you should check with your local DMV to find out the minimum insurance requirements in your state. These requirements vary widely, so make sure you have an accurate list. When searching for an insurance company, numerous options for free online car insurance quotes exist, or you could ask a friend what kind of insurance they have.

Car Insurance vs. Health Insurance

One thing to keep in mind – car insurance rates on medical coverage are sometimes more expensive than medical insurance alone. If your state does not have a minimum requirement for medical coverage in your automobile policy, or if the minimum requirements seem extraordinarily high, try checking out the rates for similar coverage from a health insurance provider.

A wise car insurance shopper seeking medical coverage in their auto insurance policy should always make a comparison between the rates of medical coverage in the auto policy with the individual health insurance quotes received from health insurers. Oftentimes, your medical insurance will negate the need for overpriced medical coverage from an auto insurance policy.

It’s a dangerous world out there, so stay prepared!

About the Author

Laura Penekamp is a domestic goddess who has her hands full with three school-aged children, and she thoroughly enjoys her career as a freelance writer. When she is not packing lunches or assisting with homework, Laura adores reading historical novels and researching various aspects of history.