Do you need auto insurance in the USA? Where does a person start to find the best auto insurance policy ?
Therefore, the answer is that you have to obtain auto insurance in the United States in order to legally drive and maintain your license and registration.
However, there is more to this than simply having the minimum amount of coverage to avoid any controversy if you are arrested. So here are the answers to some of the most common questions about US auto insurance requirements.
Why is auto insurance mandatory in the US?
Having an auto insurance policy shows that you are capable of taking responsibility for any damage in the event of an accident.
While some states vary in relation to proving a liability insurance obligation, ALL states have some type of law that requires drivers to demonstrate financial responsibility with a liability policy.
For others, you would have to show proof of enough assets to be able to pay medical bills, damage to the vehicle (more if you are at fault for the accident). If you cannot provide this proof, legal penalties can be:
Suspension of driver’s license
Suspension of the license plate of your car
Also, if you don’t have auto insurance, you could face financial catastrophe if you are in an accident and don’t have the means to pay for damages or medical treatment.
Aside from the law requiring auto insurance, most lenders expect you to purchase full coverage auto insurance as part of the terms of your auto loan. This is to protect your asset which is the car itself.
What is the purpose of car safety?
The purpose is to protect you financially and protect your property or that of your lender if your car is financed.
The main purpose, however, is to cover the cost of damage to the vehicle (yours and / or the other person) and medical expenses for injuries. Also, your auto insurance will cover you even if you are not the owner.
In addition to coverage for medical costs and collision damage, you can purchase auto insurance that covers the cost of fire, theft, or vandalism. However, these additions are not necessary.
Some states also require you to get coverage against uninsured or underinsured motorists. Also in a few states do you need to purchase collision coverage that pays for damage to your own vehicle in an accident for which you were at fault.
What is the minimum requirement for auto insurance?
The liability coverage is the minimum auto insurance required. Similarly, the laws that deal with auto insurance can vary slightly by state. In fact, all but two states have minimum liability requirements that all drivers must meet. New Hampshire and Virginia only require that you be able to cover financial responsibility for an accident.
In many states, the minimum amount of auto insurance covered by law for bodily injury and liability is $ 50,000 and $ 25,000, respectively. Although for the most part, when you look at auto insurance, it will read like this: 20/40/10.
The 20 is the minimum amount of liability per person that covers in an accident for bodily injury or death ($ 20,000).
40 is the maximum amount it will cover for everyone involved in an accident ($ 40,000).
Finally, 10 corresponds to the amount of coverage that the policy provides for property damage (10,000).
By remembering these three numbers, you will be well informed about the coverage of the policy and choose the one that best suits your needs.
What are the minimal consequences of not getting auto insurance?
Most states penalize an uninsured or underinsured driver with a hefty fine, although each state differs slightly in their penalties. For example, driver’s license suspension in the following states:
In other states, you could lose your car registration if you don’t have the minimum amount of auto insurance. In addition to criminal penalties and fines, the other driver may sue you for damage to the vehicle and medical expenses if you caused the accident and did not have insurance.
On the contrary, auto insurance can protect you from these lawsuits because your insurance company, once you file the claim, will direct any necessary payments to the other driver.
What if I don’t have a car, but I still have to drive?
One option to consider is non-homeowner’s insurance. Basically, it is like having a car insurance policy, but without the car. Provides liability coverage if you borrow or rent a car often. This could help protect your assets in the event that you caused the accident and the other driver sued you.
However, non-owner’s insurance will not cover damages if you are using a car that is owned by someone who lives in the same household. Also, if you’re using a friend’s car, that person’s liability insurance will cover damages up to the limits of their policy. From there, your non-homeowner’s insurance will take care of the rest.
What happens if other family members drive my vehicle?
hispanic woman taking notes and searching for car insurance in usa with laptop
Any member of the family in your immediate household can also be included in your insurance policy.
Similarly, if you have children who are young adults who attend college and live in your home for only part of the year, they can also be included in your policy.
What if I can’t afford the auto insurance?
You have some options to consider:
Negotiate with your agent for a lower rate; otherwise, look to other insurance companies.
Decide whether or not you need collision coverage by checking the current value of your vehicle (if you’re not financing it).
Talk to your agent about deductibles. If it is higher, the premiums decrease.
Ask your agent to inform you about possible discounts for low mileage, not having processed previous claims, establishing automated payments or registering several vehicles in the same policy.
Another option is usage-based insurance whose cost is based on the driver’s habits. So if you don’t have past traffic tickets and low mileage, then you could save 10-15% annually on your auto insurance.
What states do not require auto insurance?
Only two states, Virginia and New Hampshire, don’t require auto insurance, but they do have stipulations if you don’t buy a policy:
New Hampshire: Submit proof that you meet the motor vehicle financial responsibility requirements in the form of an SR-22.
Virginia: Buying Uninsured Motorist Coverage.
While this exemption may seem ideal, consider visiting a knowledgeable insurance agent who will explain the risks and benefits of not having auto insurance in these states.
What are the other types of coverage?
Some locations require other types of coverage in addition to the minimum. When you visit with an agent, you will become more familiar with the three main types of coverage offered by most auto insurance providers. These include liability, collision, and comprehensive.
This is the minimum you would need to be a legally insured driver. Liability protects the driver in both cases when he is responsible for the accident or if he is held liable, even though, technically, he did not cause it.
This is auto insurance that includes auto repair coverage related to traffic accident cases, no matter who is at fault.
This coverage incorporates the replacement of vehicles if it is damaged by natural disasters or theft .
Rates vary between different auto insurance companies, but an agent can help you navigate through the different selections while comparing prices in order to stay within your budget.