It is very easy to get confused with the laws you have to comply with when you are behind the wheel. You may be wondering if you need auto insurance to get around. The quick answer is yes, but you need to know more about it. You should consider the minimum coverage required in your state. In addition, you should also explore various options if your budget is not very high. Read on to learn more.
Auto insurance requirements
Most states require liability insurance at a minimum. Liability covers the cost of bodily injury and / or damage to the vehicle if you caused the accident. Some laws also refer to this as proof of liability.
Other states require additional components. These different types of coverage include:
- Comprehensive: Covers any damage to your car when you are not driving
- Bodily Injury Liability – Part of your liability insurance that covers someone else’s medical care if you caused the accident.
- Collision: Covers the cost of repairs to your car in the event of an accident, even if you are not at fault.
- Property Damage – The part of your liability policy that covers the cost of damage to property (such as the other vehicle or a structure) if you are at fault.
- Uninsured or Underinsured Driver – Covers expenses if the other driver is at fault and is uninsured or underinsured
- Personal Injury Protection – Covers medical expenses for you and a passenger after an accident.
As you can see, you have many options. However, the best way to find out exactly what your state requires is to contact your department of motor vehicles (DMV) and an insurance agent.
Minimum requirements by state
Each state varies in relation to auto insurance laws. Some require more coverage than others, but liability coverage is sufficient for most. These are just a few examples of what some states require for auto insurance coverage.
At the very least, you would need to purchase a liability policy . However, if you are financing your vehicle, the lender will require you to have a comprehensive or collision policy, as it seeks to take care of your investment.
Like Texas, Illinois requires liability coverage, but lenders also require physical damage insurance.
You must have a liability policy that covers $ 15,000 for injury or death to one person, $ 30,000 for injury or death to multiple people, and $ 5,000 for property damage. A comprehensive or collision policy would not meet state requirements by themselves.
The minimum amount of liability insurance required in New Mexico is $ 25,000 per person for bodily injury, $ 50,000 per accident for bodily injury to multiple people, and $ 10,000 for property damage.
Auto insurance laws in Arizona are similar to New Mexico in that they only require liability coverage in the same amounts for bodily injury ($ 25,000) and multi-person accidents ($ 50,000). The only difference is that the amount for property damage is $ 15,000.
In Colorado, the amounts for each type of liability coverage are exactly the same as in Arizona (25/50/10). Therefore, the cost is likely to be similar.
Before registering your vehicle, you must have auto insurance that includes property damage liability and personal injury protection. Each would have a protection value of $ 10,000.
Some states have similar laws, while others include a more comprehensive policy. However, if you are looking for more information on what is required for auto insurance, you can also contact the experts at Freeway Insurance .
What if my state does not require auto insurance?
Unless you live in Virginia or New Hampshire, your state will have laws that require auto insurance. Also, these states require some type of financial support or fee. In Virginia , for example, you would have to pay a $ 500 fee known as the uninsured motor vehicle fee. However, this does not provide you with auto insurance; Rather, it allows you to drive without coverage at your own risk. Otherwise, you must have the following coverage:
- Bodily injury / death of two or more people $ 50,000
- Bodily injury / death of one person $ 25,000
- Property damage $ 20,000
Similarly, in New Hampshire, the law does not require you to have auto insurance but you must show that you can provide sufficient funds to cover damages if you cause an accident. This is known as financial responsibility. If you are in an accident that is your fault and you cannot pay the damages, your driving privileges could be suspended. Otherwise, you will need to follow the following types of auto insurance policies:
- Civil liability
- Uninsured driver
- Medical expense coverage
As you can see, the differences in auto insurance laws in these states compared to others only offer a slightly cheaper option, but in the end, you’d be better off financially if you simply invest in an insurance policy that meets your needs and meets your needs. with the law.
The cost of auto insurance depends on your location, the type of coverage, and the insurance you choose. For example, the minimum liability coverage required in Illinois would cost, on average, $ 1,120. Texas, on the other hand, costs $ 524 annually for liability and $ 1,823 for full coverage. Plus, you can expect an average cost of between $ 870 for minimum liability and $ 2,600 for full coverage. Any additional options, such as coverage for personal injury or property damage, would increase the premium.
What if I can’t afford my auto insurance?
There are steps you can take to lower the cost of your coverage. First, you can ask your agent about the discounts offered when combining policies. For example, if you have two vehicles with separate policies, the cost could decrease if both are placed on the same policy.
Additionally, you may consider increasing your deductible (the amount you pay after your insurance covers the costs) and lowering your coverage limit. You will have to pay more when you file a claim, but in the meantime, it will reduce your annual or monthly costs. Regarding payment options, you can also choose to divide your premium payments into monthly installments instead of just one per year.
Also, some states (not all) have programs that can help you temporarily with the cost of auto insurance. Specifically, California, Hawaii, and New Jersey have state-funded programs for people who qualify by income level.
What happens if I drive without insurance?
First of all, the fine would be very high. Second, and depending on the state you live in, you may face additional penalties regarding your driver’s license and / or vehicle registration.
Depending on the state you live in, the most common penalties include:
- A mandatory SR-22
- Suspension of your driver’s license
- Revocation of your car registration
- Jail time
- Mandatory community service
- Fines up to $ 5,000
- Seizure of your vehicle
- Refund fees for driver’s license and registration
Apart from these penalties, you will be classified as a high risk driver, which will further increase your premiums. Therefore, the best option is to speak with an insurance agent to explore low-cost options.
Where can I find insurance that meets the minimum requirements?
Avoid deciding on the first insurance company you find, either online or in person. The smartest decision is to compare insurance quotes that directly relate to the type of coverage your state requires. From there, you can decide if and what type of additional coverage you need.
Another idea to keep in mind is to check your driving record, as a clean record can qualify for a discount. If you are a student with good grades, it is worth asking your agent if you qualify for a lower premium. Finally, you should check your credit score and work to improve it if necessary, as it is a factor that affects the cost of your auto insurance.