McAfee Secure sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

States Require Auto Insurance

States require auto insurance all across the country. With the state of Wisconsin now on board, all but one of the U.S. states requires some form of auto insurance for its drivers, with New Hampshire the lone holdout. As time goes by, the need for protective auto insurance policies becomes more obvious and more pronounced. Medical expenses and the cost of repairing damaged automobiles keep climbing year after year. With so much at stake financially, drivers should have working knowledge of the auto insurance laws - such as the rules regarding speeding tickets and car insurance - where they live.

Significance of Auto Insurance Coverage

Auto insurance is a protective policy that takes much of the financial pain away from accidents and certain other covered claim situations. Medical expenses and the cost of trying to deal with repairing the other driver's car following an at fault accident would be a nightmare scenario without a good liability insurance policy. Virtually everywhere across the United States, drivers are required to carry some form of auto liability insurance. The individual state requirements vary, but the general principle governing the laws is the same. Failure to comply with minimum car insurance requirements is a criminal offense in most states. Certain laws even provide for the confiscation of vehicles and other consequences for non compliance. As far as state level regulations go, law enforcement officials tend to take very few things as seriously as they do car insurance compliance. Therefore it is important to follow the laws in your home state and make sure to avoid driving without adequate and proper insurance as defined by your state, while still saving money on the cheapest online car insurance possible.

Auto Insurance Policy Components

There are several distinct parts to an auto insurance policy. Each part plays its own role in the overall scheme of protection for the driver. Here is a brief rundown of the main parts of a typical auto insurance policy along with a short explanation for each of them:

  • Bodily injury liability is coverage that applies to injuries that you cause to someone else. It goes into effect when you cause an accident or are found liable for one. Bodily injury liability pays for the medical expenses and other related costs for drivers, passengers and pedestrians that are injured in an accident you cause. As a covered policy holder, you are also covered when you are driving someone else's car with their permission.
  • Medical payments or personal injury protection (PIP) pays for the cost of treatment of injuries to the driver and any passengers of the policy holder's covered vehicle. This part can cover medical payments, lost wages from missing work due to accident related injury, and the replacement of services normally performed by someone injured in a collision. It sometimes also covers funeral expenses.
  • Property damage liability insurance pays for the cost of damage to someone else's car or to other piece of property such as fences, lamp posts, buildings, or telephone poles. 
  • Collision insurance is the area of coverage set aside to pay for the cost of property losses to the covered car from a collision with another car, from flip over accidents, or from potholes.
  • Comprehensive coverage pays out for property losses due to theft or other non collision circumstances such as fire, explosion, hail, vandalism, or deer hits.
  • Uninsured and underinsured motorist coverage reimburses the covered driver or family member if they are struck by an uninsured, underinsured or hit and run driver. Hit and runs that go unsolved are treated by insurance providers as uninsured cases. Some states include both property damage and bodily injury uninsured coverage as part of their state requirements for auto insurance, others require only one of the two, and uninsured coverage is optional everywhere else.

Auto Insurance Factors to Consider

While auto insurance or financial responsibility is required virtually everywhere, not all of these modes of coverage are mandatory. Each state has its own requirements for drivers and any additional available coverage should be considered on a case by case basis. This being said, there are times when insurance protection not mandated by the state is still required of drivers. The most prominent example of this is with collision and comprehensive insurance. Lien holders typically require those who buy or lease cars from them to sign written statements pledging that they will maintain these areas of coverage as long as they still owe money on the vehicle. And they can take out a policy in the driver's name and bill them for it if no coverage is kept on the car in question.

Beyond that which is required, the elective elements of auto insurance in the different states are matters of personal taste or budget. States require auto insurance for their car owners, but these requirements do not include every possible form of car insurance protection.


FREE Quotes, Multiple Insurers

Zip Code