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The concept of auto insurance has been around almost as long as automobiles have. The first auto insurance policy ever sold in the United States dates back to 1898 – it was sold in Buffalo, New York by Traveler’s Insurance Co. and was purchased by Dr. Truman Martin. He was not required to buy insurance, since mandatory insurance laws had not yet been passed in New York, but he was a prudent man and wanted to have the coverage in case of accident. Since then, the automobile insurance business has become a huge industry that makes an incredible amount of money most of the time. While it may have been unusual for a person to buy auto insurance in 1898, it is unusual today for someone not to buy it – auto insurance is just a fact of life for most of us.
There is no federal law governing auto insurance in the United States – auto insurance is mandated by the states, and each state has slightly different requirements and rules in regards to vehicle insurance. In Alabama, New Hampshire, and Virginia, you are not even required to have auto insurance as long as you can prove that you have the means to pay a minimum amount in case of an accident – the amount differs in each state. New York requires that you be covered for a minimum of $360,000 for various types of liability, while New Mexico only requires that you be covered for $85,000 in case of accident.
When you are buying auto insurance, you need to make sure you are meeting the requirements for your state, and if you are in a state where the requirements are quite low, you might want to consider buying more insurance than required, if you can afford it. When you think about the fact that an accident can cost many thousands of dollars, and there are over 100 deaths a day from motor vehicle accidents in the United States, it’s easy to see how your insurance coverage could be less than adequate. The total costs of loss of life and lost productivity in 2010 was close to a trillion dollars, and with a car accident happening about every 14 seconds in the USA, more insurance might be better.