The Basics of Car Insurance Coverage
 

What the State Requires

Almost every single State will require that drivers carry a specific minimum amount of coverage. However, that minimum limit or amount of coverage varies by State. Certain States such as Florida or Louisiana, only requires the bodily injury limit to be at 10,000 per person, and 20,000 per accident, and 10,000 for property damage. That's typically written as 10/20/10. Other States have slightly higher limits, such as Georgia for example which requires a minimum of 25/50/25; but the highest limits will be found in AK with 50/100/25 requirement.

In other States where some coverage or insurance at all may not be required, they usually have other requirements for the driver to meet. The driver have to face Financial Responsibility requirements in case of an accident. Financial Responsibility is where the uninsured driver, in case of an at-fault accident have to show proof of certain amount of liquid assets to the court in order to not face penalties. Those penalties vary by State, and usually consist SR-22, large fines, and other types of penalties including suspensions and revocations of licenses.

Required Coverage

Most State requires at least the following minimum coverage:

1. Bodily Injury Liability (BI)
2. Property Damage (PD)

Optional Coverage

1. Personal Injury Protection (PIP) Only required in no-fault States
2. Medical Payments (Optional Coverage for yourself)
3. Uninsured Motorist (UM) Usually optional, covers yourself in case other party has no insurance.
4. Underinsured Motorist (UIM) Optional, covers yourself in case other party is underinsured.

Other coverage options may be available depending on the Insurance company.
You might want to consider options such as Mechanical Breakdown coverage, Gap Insurance Coverage, Wrongful Death. Also don't forget Towing and Car Rental Reimbursement coverage.

Comprehensive & Collision Options

When you finance a vehicle, you will be required by the loan company to carry comprehensive and collision coverage. However they are optional, meaning after you pay off the loan, you can remove comprehensive and collision from your insurance policy.
 

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