How To Buy Car Insurance
Every state in America has its own car insurance laws, rules and regulations. These regulations also include state minimum car insurance requirements. When preparing to move to a new state, a driver will need to know this insurance information when buying car insurance.
State Minimum Car Insurance
Prior to buying car insurance, research and compare the minimum car insurance requirements for your state. MyCarInsuranceRates.com has done this research for you, and by reviewing our State Guides, consumers can learn about the required insurance coverage that must be bought from car insurance companies in their state. Read more about your state’s car insurance minimums.
Understanding Minimums: Example “20/40/20″
Each number in the equation above refers to the different parts of basic liability car insurance coverage, which is the minimum auto insurance coverage required in every state. The first number, in thousands, is the minimum required “Bodily Injury Liability” limit, per person in an accident, to be paid out by the car insurance company.
The second is the minimum mandatory amount the insurer will pay under Bodily Injury coverage for an entire accident, in thousands of dollars. The third number refers to the minimum amount of Property Damage Liability car insurance required in thousands of dollars. To learn more, read our State Guides.
Bodily Injury Minimums
This type of car insurance coverage will cover any medical costs and legal expenses involved in a claim for an accident caused by the policyholder. In the minimum equation above, this is expressed by the first “20.” Many states have a minimum Bodily Injury amount of $20,000 per person in a given accident. This means that each person injured in the accident will get up to $20,000 for medical costs and damages awarded.
The second number, “40,” shows the minimum coverage the insurer will pay out for the entire accident claim. Anything beyond that, the policyholder will be liable and responsible for, as an out of pocket expense. The more car insurance coverage you buy, the less risk you have of financial hardship due to large out-of-pocket expenses.
Property Damage Minimums
Property damage liability coverage will deal with repairing or replacing the vehicle of the accident victim and/or any other property which was involved. Property damage could be to fences, structures, lamp-posts, buildings, and/or houses. The last number of the liability equation above expresses the state minimum for property damage.
Based on our example above, if someone buys basic, cheap auto insurance with minimum coverage, the insurer will only pay up to $20,000 for any property damage caused by an at-fault accident. This is a very low amount, considering how expensive cars are and how litigious society is.
Uninsured/Under-Insured Motorist Coverage
Some states also have other minimum auto insurance requirements, such as uninsured motorist insurance coverage. There are thousands of people who choose to drive uninsured despite laws requiring car insurance coverage. If the policyholder has this coverage and an accident is caused by an uninsured driver, the auto insurance company will pay any medical or property damage costs. There may be state minimums, but it is wise to make sure that the minimum would actually cover the replacement of the vehicle if necessary.
Comprehensive Insurance Coverage
Comprehensive insurance is rarely required by the state, but it is almost universally required by your lender or the bank financing the auto loan for a new car purchase. Comprehensive coverage basically pays for any damages caused by anything other than an auto accident, such as theft, vandalism, animals (deer), and weather damage. There are no minimums, and policies can be purchased in increments of thousands of dollars in coverage. The actual increment amounts ($5,000, $10,000, etc.) will depend on the car insurance company you are buying from.
Collision Coverage and Car Insurance Deductibles
Collision insurance is also rarely mandatory, but is almost always required for financed, new car purchases. Collision insurance will pay for any medical bills and damage to the vehicle if the policyholder is at-fault in an accident. The at-fault driver will be responsible for paying a deductible before the auto insurance company will pay for any damages. There are no minimums, and coverage is purchased in the same way as comprehensive coverage. Additionally, by increasing their deductible, the policyholder can find cheaper, more affordable car insurance rates, but maintain their high level of policy coverage.
Car Insurance Quotes
Once consumers know what their state minimum car insurance requirements are, consumers can get online quotes to compare auto insurance rates, policies and different levels of coverage before buying car insurance. While buying the absolute minimum car insurance might sound appealing, purchasing extra protection with the savings you get from car insurance discounts offered by companies is a wise choice.
By entering your 5-digit zip code, MyCarInsuranceRates.com offers our users the ability to find and compare multiple car insurance quotes online from the best auto insurance companies in the country, like Nationwide, Allstate, GEICO, Progressive, 21st Century Insurance, Liberty Mutual, State Farm, Farmers, AAA, AARP, and Esurance, helping policyholders find and buy the best and cheapest car insurance.
To learn how to buy car insurance, enter your zip code to begin a car insurance quote now and compare rates to find the best, cheap auto insurance available from companies.
