Basics of Car Insurance
Requirements
What the
State Requires
Almost every
single State
will require
that drivers
carry a specific
minimum amount
of coverage.
However, that
minimum limit or
amount of
coverage varies
by State.
Certain States
such as Florida
or Louisiana,
only requires
the bodily
injury limit to
be at 10,000 per
person, and
20,000 per
accident, and
10,000 for
property damage.
That's typically
written as
10/20/10. Other
States have
slightly higher
limits, such as
Georgia for
example which
requires a
minimum of
25/50/25; but
the highest
limits will be
found in AK with
50/100/25
requirement.
In other States
where some
coverage or
insurance at all
may not be
required, they
usually have
other
requirements for
the driver to
meet. The driver
have to face
Financial
Responsibility
requirements in
case of an
accident.
Financial
Responsibility
is where the
uninsured
driver, in case
of an at-fault
accident have to
show proof of
certain amount
of liquid assets
to the court in
order to not
face penalties.
Those penalties
vary by State,
and usually
consist SR-22,
large fines, and
other types of
penalties
including
suspensions and
revocations of
licenses.
Required
Coverage
Most
State requires
at least the
following
minimum
coverage:
1. Bodily Injury
Liability (BI)
2. Property
Damage (PD)
Optional
Coverage
1.
Personal Injury
Protection (PIP)
Only required in
no-fault
States
2. Medical
Payments
(Optional
Coverage for
yourself)
3. Uninsured
Motorist (UM)
Usually
optional, covers
yourself in case
other party has
no insurance.
4. Underinsured
Motorist (UIM)
Optional, covers
yourself in case
other party is
underinsured.
Other coverage
options may be
available
depending on the
Insurance
company.
You might want
to consider
options such as
Mechanical
Breakdown
coverage, Gap
Insurance
Coverage,
Wrongful Death.
Also don't
forget Towing
and Car Rental
Reimbursement
coverage.
Comprehensive &
Collision
Options
When you finance
a vehicle, you
will be required
by the loan
company to carry
comprehensive
and collision
coverage.
However they are
optional,
meaning after
you pay off the
loan, you can
remove
comprehensive
and collision
from your
insurance
policy.
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