Federal Laws on Automobile Insurance
Automobile insurance is nothing more than a wager that sooner or later you will be in an accident. The particular laws for auto insurance vary from one state to another, but there are also laws that the federal government has set regarding insurance for your vehicles.
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Minimal Coverage
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The federal government of the United States requires that all automobile drivers possess minimal insurance coverage. Generally speaking, minimal coverage can be defined as enough insurance coverage to pay for damages to other people and property in a car accident. Just how much coverage is defined as "minimal" coverage is an amount set by each state, not by the federal government. The federal law simply states that drivers must comply with the minimal standard that's been set.
Insurance Sales
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The federal government has declared that it's not legal for someone with a certain criminal record to sell auto insurance. Individuals who have been convicted of felonies involving a breach of trust or some form of dishonesty (such as fraud or forgery) are not allowed to obtain licenses to sell insurance. If someone convicted of one of these felonies can get a waiver from the government, his or her conviction will be overlooked for the purposes of licensing. The individual must, however, pass all necessary tests to earn the license to sell auto insurance.
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State Varieties
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There are three different categories of auto insurance into which states may fall. A tort state is a state where one party will be found to be at fault for an accident and the other party may then sue the at-fault party for damages sustained. A no-fault state is a state where no matter who is at fault for the accident, an auto insurance company will pay up to the damages covered by the policy each person holds. An add-on state is a state that's a combination of these two, where an auto insurance company will pay you up to the damages your policy states, but the other party may still sue you if you're found to be at fault.
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