Interesting Facts You Will Not Know About Car Insurance

Submitted by: Jack Labens

For most people, car insurance is an unavoidable hassle that is only given thought when an accident takes place or insurance rates increase. What many don t realize is that car insurance has a much longer, more complex history than the general public might expect. While a great majority of the population would probably complain about the mandatory insurance minimums, some to the point of disregarding the law, learning more about the source of this discontent might lighten the dark reputation of state insurance requirements.

Where did the idea of car insurance come from anyway?

Contrary to popular belief, the concept of transportation insurance is by no means a new idea. Records regarding the conditions and liability of cargo transportation (albeit by ship) have been traced as far back as ancient China. Chinese investors responsible for the cargo being sent across vast distances would frequently protect their investments by taking out primitive insurance policies to prevent major losses in the event of a disaster at sea (think pirates, storms, illness, etc.).

The automobile was not introduced in the United States until 1908, but vehicle insurance was available almost a century earlier. The subjects of these policies were likely to be trains, wagons and ships, but the concept was essentially the same. Travel by anything other than foot, especially in the face of a frontier nation such as the US, was inherently dangerous. Transportation of goods and services was costly, and investors and travelers preferred to have some form of protection from sometimes unavoidable and unexpected danger and loss.

Although laws regarding mandatory car insurance coverage did not come into play until 1927 in Massachusetts, the idea of such a practice was around much earlier. The first car insurance policy offering liability coverage was issued by an English company in 1895, with the first US-written policy issued three years later in 1898. It was ultimately decided that car insurance was necessary when lawmakers determined that driving a car was a privilege, not a right. A consensus was reached that innocent third parties such as pedestrians, other drivers and personal property deserved protection from harm in the instance of irresponsible drivers or unavoidable accidents. Thus, car insurance began its climb into the law books as we now know it.

Why is car insurance so important?

Information regarding specific state minimum limits on insurance can be most easily found by consulting your local Department of Motor Vehicles. While it may seem like an unnecessary burden, the consequences of failing to comply with regulations can be heavy.

Although minimum requirement vary widely, car insurance is mandatory in every state in the United States, as well as many countries abroad. The potential for loss in an accident, regardless of the responsible party, is high. Carrying sufficient insurance can help mitigate material losses for yourself or another victim. Combined with the fact that failure to be properly insured can result in high fines and even jail time, attempting to subvert the law is futile, foolish and very dangerous.

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