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A true story - only
the names have been
changed.
Many people think that it’s dumb for
the government to require people to have auto
insurance in the United States. They can think of
all kinds of reasons why they shouldn’t be required
to have auto insurance. Many people think the laws
only exist to benefit the big insurance companies.
Of course, this is mostly the opinion of people who
have little financial or legal training. If they
knew the facts involved, these people would probably
change their minds very quickly.
The truth is that unless you have good insurance
coverage, even the slightest auto accident can be
too costly. Just replacing a rear bumper can cost
you several hundreds of dollars. A major accident
can financially ruin you. Think about how much it
might cost you if the following scenario happened,
and you were Paul Harper:
Paul had overslept, and fearing he’d
lose his job if he was late one more time, he rushed
out the door, taking his breakfast with him to eat
on the way to work. His breakfast consisted of a hot
cup of coffee, a greasy biscuit and sausage
sandwich, and a jelly doughnut.
After eating his food, he decided to turn on the
radio to hear the morning traffic report, while he
was calling his co-worker to ask her to clock in for
him if he’s not there on time. While reaching for
the radio knob, he knocked over the hot cup of
coffee, which spills on his lap. As he was dabbing
at the spill, he took his eyes off the road for only
a few seconds. However, he missed seeing the big
pothole in the road, because he was busy with the
coffee, radio, and cell phone.
Of course, due to being late, Paul
was speeding a little, trying to make up lost time.
So he started to lose control of his car as his
tires lost traction due to hitting the pothole so
hard. He did his best to regain control, but his
hands were greasy and sticky from the food he ate.
The steering wheel just slid through one greasy hand
while it stuck to his other sticky hand.
Paul ended up swerving into oncoming traffic, and
sideswiped Joan Martin's car, causing John to crash
into a telephone pole. He then careened off the road
onto the sidewalk, and he hit a young child who was
walking to school. His car finally came to a stop a
few feet further away when it hits a fire hydrant.
Joan Martin and her passenger were both seriously
injured, and the child died at the scene. Paul
Harper also sustained some severe injuries.
Paul had no auto insurance, because
he considered himself to be a good driver who
wouldn’t ever have any accidents. So he used the
insurance premium money for some other priority,
thinking he would just pay the fine if he got caught
driving without insurance. Now he has to come up
with the money to pay the fine, plus pay for all the
medical expenses and lost wages for Joan Martin and
her passenger and himself. Moreover, he has to pay
for the damage done to the telephone pole and fire
hydrant. He also must replace his own vehicle and
Joan's vehicle, since both were totally destroyed
during the accident.
The child’s family sued him for the
wrongful death of their child, and so Paul must pay
lots of legal fees for all the attorneys and court
costs. He also has to pay the funeral expenses and
other compensations to the child’s family, because
they won the lawsuit. On top of it all, he has
ruined his good credit standing, and now everything
he buys on credit will cost him more, including his
next vehicle and the insurance for it.
If Paul had the required liability
insurance when he had this major accident, he
wouldn’t have to come up with all the money by
himself. His insurance company would be paying for
the medical costs, the telephone pole and fire
hydrant replacement, and his vehicle replacement.
The insurance company would also handle the court
case and pay the attorneys fees and court costs, as
well as pay the funeral expenses and compensation to
the family. Paul would only have to pay his own
medical costs and replace his own vehicle.
However, if he had full-coverage
policy, known as comprehensive and collision
coverage, his insurance company would pay for
everything once he met his deductible amount. If his
deductible amount was $500, then all he had to pay
was the $500, and the insurance company would pay
the remaining thousands of dollars, including what
it cost to replace his vehicle and his own medical
costs. Or at least, the insurance company would be
paying for all these things as long as the costs
were within the limits set by his policy. He would
still be responsible for any amounts that are above
the set limits, and could still lose his personal
assets in a lawsuit if this happens.
Perhaps Paul Harper would have made
some better choices about getting auto insurance
coverage if he had known the national statistics. He
would then know just how likely he would possibly be
involved in an accident, despite his good driving
skills. The most recent statistics show that over
six million car accidents take place in the U.S.
each year. Around 40,000 people are killed in car
crashes annually, and at least 1 person dies in a
car accident every 12 minutes.
In the U.S., about two million of the people injured
in auto accidents each year suffer permanent
injuries. Motor vehicle accidents are the leading
cause of acquired disability in the United States.
At least one person is injured in a car accident
every 14 seconds, and over 5,500 people are injured
as non-occupants involved in car crashes annually.
Over 25% of all drivers are involved in a car
accident within a five-year period. Additionally,
approximately 30% of fatal accidents are caused by
excessive speed, which is the second most common
cause of deadly car accidents. Moreover, each
American spends more than $1,000 per year due to
auto accidents, with an average annual total cost of
$164.2 billion for the entire nation.
Other statistics show that motor
vehicle crashes are the leading cause of death for
people ages 2-34 years old. Nearly 700 children are
harmed every day due to auto accidents, with
approximately 2,000 children dying every year due to
injuries sustained by car accidents. With statistics
such as these, it’s easy to see why the government
would require at least liability insurance. They
want to ensure that every driver could at least pay
for the minimum costs involved with having an auto
accident, which is highly likely to happen despite
the driver’s driving skills. |