A Brief History of Car Insurance

Car Insurance

If you want to drive a car in Provo, Utah (or, anywhere for that matter), you better have car insurance lest risk a ticket and a hefty fine. Insurance may seem cumbersome to many drivers, but it is an obligation that is more than warranted.

History has proven that insurance is a necessary component to safe driving; lest you find yourself navigating roads replete with chaotic people who ignore otherwise enforced driving measures, such as stop signs and speed limits. Without insurance, people would be less panicked about accidents, and thus more accident prone.

The Very First Auto Insurance Policy

The first car accident took place in Ohio in 1891. Cars were quite new at this point in time, and people weren’t fully educated on their dangers. It only took six years before the very first auto-insurance policy was drafted in Dayton Ohio.

For $1,000 Gilbert J. Loomis purchased liability insurance. Like today’s liability insurance policies, the insurance protected him should his car injure or kill another human being, or wrought damage to their property.

Although people purchased auto-insurance, it wasn’t a mandatory requirement until the 20th century. The mass production of cars meant more drivers, and with more cars on the road, and more accidents occurring each day, the government determined auto insurance should be obligatory.

Auto Insurance History and Provo

The difference between auto insurance coverage in Provo, compared with the rest of the country, is that insurance rates are calculated differently in Provo. Although it’s not recorded exactly when these changes took effect, in Provo you have to provide more information to your insurance agent.

Your insurance rate may be based on more than just your vehicle type and driving record. Your credit score, gender, age, marital status, and occupation can factor into your insurance costs. All of these factors can reduce or increase your insurance premium, so the coverage you receive could be less or more depending on what you can afford. At a minimum you must have liability insurance.

Why it’s Illegal to Drive without Insurance

It’s illegal to drive without insurance because it’s dangerous. Imagine you’re hit by an uninsured driver. Your car is totaled, and you have physical injuries to boot. The driver isn’t a rich man, and therefore your lawsuit cannot be paid. You’re left with repair costs and medical bills. If they’d followed the laws, you’d be taken care of by their insurance company.

There are two types of insurance. The first is “third-party damages,” or liability. It covers any damage you could do to another party. The second type is “own damage.” This is an option insurance that covers your vehicle.

How Much Insurance is Enough Insurance?

Express Insurance, which offers auto insurance Provo residents can take advantage of, writes that “Every person is unique,” so the amount of insurance you require “depends on your specific situation.” You’ll want to consider the benefits of the various insurance coverages.

  • Liability – mandatory insurance; you have no choice but to subscribe to this insurance.
  • Collision – If you’re involved in a collision, this insurance will cover the damage to your vehicle even if you’re at fault. Express Insurance writes “It might not be worth paying $200 a year for collision insurance on a car that’s worth only $1,000. But if the car is worth $10,000, you probably want this coverage.
  • Comprehensive – Coverage for theft, vandalizing, or other damages. Includes medical coverage; this insurance is often necessary if you’re financing a new vehicle.

Tips for Keeping Your Car Insurance Policy Current

The DMV recommends that you pay your premiums annually. This saves money, and it ensures you don’t accidentally miss a payment and thus find yourself pulled over for driving without insurance. If you cannot afford to pay your premium annually, you’ll want to set up auto-payments. This way, you won’t forget to make a payment.