Car Insurance Is Required By Law

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Throughout the country, in almost every state, if you operate a motor vehicle, you are required to carry minimum amounts of auto insurance; mandatory limits and types of coverage varies from state to state.

There are only three states that do not require liability auto insurance: Mississippi (offers vehicle owners the option to post cash bonds); Virginia (an uninsured motor vehicle fee can be paid to the state; New Hampshire (personal responsibility only – with an exception – drivers may be forced to carry liability insurance if they have been in an accident, convicted for DUI and/or cited for a major traffic violation).

State-by-state requirements for penalties on a first offense for driving without insurance vary widely. Penalties can range from 30 days in jail, to suspension of license and registration and fines up to $1,000.

The required types of car insurance coverage and liability minimums also vary between states. These liability coverages include:

  • Bodily Injury and Property Damage Liability
  • Uninsured Motorist
  • Uninsured/Underinsured Motorist
  • Personal Injury Protection

15/30/25 – Understanding What Your Coverage Means

Each state’s required liability car insurance minimums are expressed as a series of numbers, such as 15/30/25. The first two numbers refer to bodily injury liability limits, and the last number refers to the property damage liability limit. For example, 15/30/25 means coverage up to $15,000 for each person injured in an accident, up to a maximum of $30,000 for the entire accident, and $25,000 worth of coverage for property damage.

However, to provide an extra cushion of protection, if you can afford it, purchase a car insurance policy above your state’s required liability minimums.

No-Fault Auto Insurance

The term “no-fault” auto insurance is often referred to in policies as Personal Injury Protection. No-fault coverage eliminates injury liability claims and lawsuits in exchange for direct payment by the injured person’s insurance company of medical bills and lost wages — up to certain dollar amounts — regardless of fault.

The Limits of No-Fault

Most no-fault insurance provides very limited coverage to the injured person:

  • It pays benefits for medical bills and lost income only.
  • It provides no reimbursement for pain and suffering or emotional distress.
  • It does not pay for medical bills and lost income higher than the PIP benefit limits of each person’s policy.

Currently, 12 states have no-fault auto insurance laws: Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah.

The liability auto insurance required by each state are only minimums; however, the costs associated with an accident can quickly exceed minimum amounts, leaving you on the hook with huge out-of-pocket expenses. That’s why getting more than minimal insurance coverage makes sense. It’s a relatively inexpensive safeguard against possible financial hardship.