The costs incidental to motor vehicle accidents, thefts of cars and trucks, and similar vehicle-related occurrences in the United States are immense. In addition to the human costs, consisting of some 40,000 fatalities and hundreds of thousands of injuries annually, the yearly economic cost of such incidents is extremely high. The understandable governmental response to this situation has been the widespread enactment of legislative provisions which, in an attempt to assure that at least some reimbursement is made available to persons who suffer injuries from vehicle-related causes, make it compulsory for the owners and operators of motor vehicles to acquire and maintain insurance on their vehicles in order to be allowed to operate those vehicles on the public streets and highways.
Because of the particular vulnerability of innocent third parties to the reckless or careless operation of motor vehicles, the most basic component of a compulsory auto insurance coverage law is a requirement that the owner or operator of a car or truck maintain a prescribed amount of insurance for the benefit of such third parties. Due to the problems inherent in adequately policing drivers’ ongoing compliance with compulsory auto insurance coverage requirements, such requirements are often coupled with provisions that require the owner or operator of a motor vehicle to produce proof of the existence of insurance coverage in order to obtain a registration for the vehicle that will permit it to legally travel on the public roads.
The business of insurance in the United States, including the insurance of motor vehicles, has traditionally been governed by the laws of each individual state rather than by a single unified body of federal law. As a result, the nature and extent of requirements for compulsory auto insurance coverage will vary from state to state.
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