Getting Quotes for Liability Insurance
What is Liability Insurance?
Nowadays, a majority of states require drivers to carry insurance on their vehicles. Liability insurance is intended to protect both the driver and the insurance company from falling into financial ruin when accidents occur, and the concept of liability insurance is fairly simple. Throughout the course of the year, an insurance provider will have to pay out claims to those it insures. In order to provide that money, it calculates how much it's likely to pay out in claims and divides that amount by the number of people it insures. All of the customers are then required to pay a portion of that money whether they end up making a claim or not.
If an insurance company ends up paying out a smaller amount of money in claims than it originally estimated, it earns a profit over the course of a year. However, if it pays out more in claims than it collects, it suffers a loss. As a result, the people it insures will be forced to pay a higher cost the next year. That way the company can ensure that everyone is adequately protected.
Modern insurance companies first arose in London the 17th century, but it took over two hundred years for insurance policies to become commonplace in the United States. In the 1850's, state governments began imposing control on the insurance companies, and Insurance Commissioners were delegated to oversee the industry. Now, there are local laws that require insurance companies to follow certain standards. Initially, the laws were based on the ideas of financial responsibility, and insurance companies needed to have a certain amount of money in order to ensure that they wouldn't become bankrupt due to an above-average number of claims. Tort laws, meanwhile, protected those who carried insurance. These laws basically stated that if one person damaged another person's property or injured them, then the responsible party was liable to pay financial compensation.
If someone doesn't have enough money to pay for an attorney, however, gaining compensation for their lost property can be difficult. In certain cases, it would be easier for a rich person to hire an expensive attorney and use tort laws to their advantage than it would be for a poor person. Due to this perceived inequality, state laws changed. Every state but New Hampshire currently requires drivers to have certain amount of liability insurance. The cost of insurance is spread out among more people, and insurance rates have become more affordable as a result. Howeve, some drivers choose to go without insurance despite the rules. If states were more aggressive about enforcing the laws, more drivers would be paying for insurance, and companies could lower the rates even further. In order to find out how much coverage will cost them, drivers should seek out car insurance quotes from a number of insurance providers. They'll then be able to compare them and find the best rates.