What You Need To Know About Your States Car Insurance Requirements

Although car insurance is a recurring expense, it is an important one because it will protect you against financial liability or loss if your car is in a collision resulting to property or physical damages. In the US, car insurance rules differ among states, but in most cases, liability insurance is required as an evidence of financial responsibility, or to put it simply, to show that you, as the vehicle owner, can cover the cost of damage to other people or property in case of a road mishap where you are at fault.

Some states, such as Wisconsin, have less stringent proof of financial responsibility requirement. In Virginia, insurance is also not required, and people living there can instead pay the state an annual fee, about $500 per car, if they opt out of buying liability insurance. In contrast, there are a few states such as North Carolina that require that you purchase liability insurance before a license can be issued. Because of these differences in insurance requirements, it is best to check with your states transportation bureau.

Understanding USA car insurance requirements

When reading about your states auto insurance requirements, you would most likely encounter numbers such as 25/50/25. The first two numbers are bodily injury liability limits and the third number refers to the property damage liability limits. To elucidate, 25/50/25 signifies each individual hurt in a car accident would receive a maximum of $25,000, but only $50,000 is allowed per accident. What this means is, if there are three people hurt, and each of them require $25,000, whoever submits a claim first gains first access to the $50,000 limit. When it comes to last number, it means that the total coverage per accident allotted for property damage is $25,000. Tap here to discover more about car insurance in USA.

In case of a car accident, these state required limits often could not adequately cover your entire liability and property damage requirements. As such, despite the fact that purchasing a policy that satisfies your states minimum requirements is all that is required to drive legally in your state or save yourself being penalized for not showing proof of financial responsibility in the event of a car accident, this is not always the best choice. This is because doing so would mean more out-of-the-pocket expenses for you, and the potential for jail time or being sued if you cannot pay for your liabilities.

How much coverage should you purchase?

Insurance providers may convince you that you should buy as much as you can afford. While that may seem logical, it is not always practical. For example, you do not need to shell out a great deal of money on a personal injury protection policy if you already have a health insurance or disability insurance through your employer.