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The Industries
The Lawsuits
Car Insurance - History
Starting in ancient time, bipedal humans used the old fashion 10-toe solute to make their mark in the sand and sole-it from dusty destination to thorny residence. Bark and leather made up the first sandals that saved the soles of your ancestors but the speed of transport was somewhat.... lacking. Domestication of the common equine resulted in much faster land travel but the potential for damage went up as the weight of the traveler increased for 5 to 50 stone. Returning from home, late at night from the local pub was still possible while intoxicated, and preferred to take the horse for the return trip as a horse can navigate even when you can't.The trouble began when viking warriors began to include their equine companions in the drinking games and stumbling horses on the return trip started to damage the poorly constructed dwellings of the era. With little more than a fist a pitchfork, the original insurance was the predecessor to the shotgun, the lowly land owner was forced to take matters into their own hands and just try to hunt down an extract a toll from that reckless traveler. So not really insurance, more of a tax.
Fast forward to the invention of the iron horse and things got really interesting. originally constrained to track, this damage was kept to a minimum with people falling into the tracks or reading the morning paper on the way to work and falling in front of the iron donkey. Several years later the track was no longer required and first steam powered carriages were set free upon the land making what many would now recognize to be the modern auto mobile, or mobile auto drive vehicle. tearing around, splashing through mud puddles, and just causing mayhem was left to the elite of the era where the cost of the devices was the original barrier to entry, much like the modern Tesla X of today, but as manufacturing improved, prices plummeted, and this reckless machine was available to the masses.
First associated with Henry Ford in the united states, but really started much earlier by his Benz brethren in Germany, the internal combustion based automobile hit the 1900's like a ton of bricks. entire infrastructure was ripped up and all future development upscale to make space for the monstrosities. The American landscape was forever changed, now accessible to any family with the daring and bravery to park their horse and rip across the country on the emerging road networks to take in the sites.
Now accessible to all, injury and liability was inevitable. In the mid 1900's regulation changed to require not only seat belts and other safety mechanisms in these new machines, but regulation to reduce pollution and protect operators from themselves by requiring insurance. Regulated by State in the United States, insurance minimums vary throughout the nation - with premiums varying greatly by how much damage you are likely to do in your automatic-traveling-contraption of choice and if damage occurs, which side of the claim will be paid and how much.
For example, in the hypothetical situation there is an altercation, and YOU as the driver of a vehicle are deemed at fault, and you hit ANOTHER automatic-traveling-contraption, the insurance scenario may play out something like this. First order of business, local jurisdiction determines fault. who-dun-it. your in for a real doozy when shared fault states rule both and the insurance companies get to fight over who pays what, but for now let's just say the cops agree, you did it, and write the report like that. Now the insurance company looks at your policy - did you pay for medical for or, or just the poor sap you hit? The victim is asked to sign a statement releasing all medical claims as quickly as possible to reduce liability for the insurer. of course people now know how this works, so they could wait up to 2 years to sign! next, let's look at the damage, how much did you tear up that other car? minor vendor? too bad modern cars with unibody construction are pretty difficult to 'fix' correctly per the manufacturer recommendation. what may not even appear to be cosmetic damage from the outside could have collapsed internal safety crumple zones and be costly to repair.
A Claims adjuster will send that car to an adjuster that approximates the value of the vehicle, and how much it will cost to repair. if the cost to repair is any where near the appraised value of the vehicle, insurance will just scrap the vehicle, and low ball the poor sap a payout for the vehicle. too bad, maybe just a few bucks in cosmetic damage, but structural damage at a certified body shop is not allowed to be repaired. this is where the victim gets super pissed.. .now their car is scrapped, they don't get enough money to buy the equivalent car, and they don't get ANY money until they sign off medical sometimes. Thats a little tactic by the insurance guys to get the poor victim to sign quick and release all future medical claims as permanent loss of work could be hundreds of thousands in damages.
Now, if they get around to it, your insurance company looks to see if you had full coverage or not. were you paying insurance to cover damages on your vehicle? if you are driving a lease most definitely, it was in the terms of the lease - and is why what looked like a good deal for a car really had a bunch of expensive registration and insurance that you forgot to crunch when you got that thing. Good, your car is covered, but did you read the fine print? will they provide a rental until it's fixed or are you on your own? nope... no free rental, so now you have to find alternate transportation until the repair is completed.
This little scenario just goes to show how an insurance claim can and does pay out - and it's really unfortunate that we as a society have come to this point, where adults can't take acceptable responsibility for their actions on their own. Insurance also is a form of personal liability protection that can limit the amount of damages done to you - but look closely at your policy, just because it tops out at $500,000 coverage, this doesn't mean someone won't bring a suit against you for more. In this case Insurance is doing something minorly useful for you - they are such a pain to deal with, their bureaucratic process can whittle down and defeat most claims limiting what your insurance pays out, and directly reducing the amount that may be brought against you personally.
This is probably one of the biggest benefits of insured coverage - even for you few citizens that reside in Virginia, New Hampshire, and Mississippi where you have alternate means of protection in lieu of traditional vehicle insurance. Really, this just means neighboring state drivers in Washington DC, West Virginia, Kentucky, Tennessee, North Carolina, Main, Vermont, Massachusetts, Arkansas, Louisiana, and Alabama need to be extra careful of folks from the weird 3. Extra Caution to the folks in Tennessee as 2 of your neighboring states have drivers that can legally drive with a differnt form of protection.
Starting in 2019 - insurance requirements are pretty much the same, except projected increasing DMV fees, and increasing insurance rates. California has some nice changes coming including revisement to Motorized scooter policies, and how to secure unsafe loads, so if your line of non bi-pedal transport includes the 2 wheels or ropes holding down loads - watch for updates.