Auto Insurance Requirements
Car insurance is a special type of insurance that protects drivers in the event of a traffic accident in which their car is damaged or there is personal injury or property damage. Car insurance also covers the vehicle in case of damage by vandalism and other types of accidents. Auto insurance policies are available in many different varieties and coverage amounts depending upon factors such as the legal requirements of the insuring state as well as the amount of coverage a person can afford.
Understanding what the requirements are is typically the first step of all persons when they look for a car insurance policy. Enter your ZIP code into the FREE comparison tool above!
National Requirements for Drivers
In the United States, each state requires drivers of motor vehicles to carry some sort of automobile insurance, or in some states at least proof of financial responsibility in case of an accident. Minimum requirements for each state can be found on the webpage for the state insurance commissioner. Drivers can find the requirements as well as an explanation of legal insurance responsibility. For instance, in Oklahoma and Louisiana, law requires only $10,000 worth of personal injury coverage per passenger with a limit of $20,000 total per accident.
While this may satisfy the legal requirements of the state, drivers need to consider that in the event of an accident resulting in more than $20,000 worth of personal injury, the driver can be found personally responsible if the accident was their fault. It is advisable to discuss with an insurance agent the difference in premium payments for additional coverage to protect from such an occurrence.
Finances Comes Into Play
Auto insurance is not required in some jurisdictions where proof of financial responsibility is accepted instead. In all other areas, drivers must carry at least the minimum amount of insurance coverage to comply with the law. In the event a driver is found to be driving without insurance, there are stiff penalties and fines that can be imposed on the offending driver. Uninsured motorists can lose their license, and might find that their auto insurance premiums are higher than normal when they do attempt to get coverage after receiving a ticket for no insurance coverage.
Is Minimum Car Insurance Coverage Acceptable?
Many times a driver will purchase state required minimum auto insurance coverage for the state in which they live and then drive in states other than their home state. For example, if 10/20/10 car insurance is purchased in Louisiana to satisfy legal insurance requirements, but an accident occurs in Texas where the minimum coverage is 30/60/25; will the Louisiana insurance be within the limits of Texas law?
Auto insurance companies are aware of these issues and have worked out a system so that drivers are covered by their own policy regardless of the state in which they have a claim. This means that drivers can feel safe driving across country, knowing that they are legally covered with auto insurance no matter the state they live in or drive in. Therefore, if you purchase minimum auto coverage in Louisiana at the 10/20/10 rate, but then have an accident in Texas, your coverage automatically changes to the minimum Texas rate of 30/60/25. The rate will return to its normal coverage rates when returning to Louisiana.
To find and compare great auto insurance rates, simply enter your ZIP code into the FREE tool below!
