What Auto Insurance is Needed? |
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 In order to operate a vehicle legally the auto insurance needed is dependent upon each particular state's laws and regulations. Each state mandates their own types of policies that are needed for registered motor vehicles and each set the minimum coverage limits required for each policy.
States that follow the "Financial Responsibility" law are most common and they make it mandatory for motorists to carry Liability policies which cover the injuries and damages that the policyholder causes to another party as a result of an accident.
Some states may follow the "No-Fault" law which requires individuals to carry Personal Injury Protection (PIP) which provides compensation for injuries to the insured regardless of fault and Property Damage Liability which pays for the damage of another party's property if caused by the policyholder. Some states may require drivers to purchase Uninsured Motorist in addition to Liability and PIP.
Additional Car Insurance that May Be NeededThere are those who may benefit from coverage that is more extensive than what their state's laws require. It is suggested by many industry professionals and consumer guides to compare quotes and purchase limits higher than state requirements. A good example of where this would be beneficial is for those who reside in California; the law requires that motorists carry a liability policy consisting of $15,000 for bodily injury for one person, $30,000 for bodily injury per accident and $5,000 for property damage. These are very low amounts and in the event that a policyholder hits a luxury vehicle worth $45,000, their insurer would only pay the $5,000 stated on their policy and the insured would be liable for the remaining $40,000. Therefore, purchasing higher limits can help prevent this type of situation from occurring.
For those who reside in states which do not require Uninsured Motorist, this is a type of policy that can be extremely beneficial when
choosing coverage to buy. This will pay for injuries caused to the policyholder and/or passengers in the event that they are victims of a hit-and-run, struck by a driver who does not carry coverage or is underinsured.
 Aside from what is needed legally in order to operate a motor vehicle, some individuals may be in need of protection for physical damage to their vehicles. This comes in the form of Comprehensive and Collision and is recommended for those financing a vehicle and may be made mandatory by their lender. These types of policies usually come with a deductible that must be chosen at the time of purchase. The amounts of deductibles are usually in the amount of $250, $500 and $1,000 and this is the amount that must be paid by the insured following a claim.
Additionally, there are a few more types of coverage that some may see fit for their needs such as rental car reimbursement, towing and roadside assistance and medical expense. Besides what is required by law, everybody's necessities are different and they should take the time to understand their choices so that they can make an educated decision on what protection would benefit them most.
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