State Required Car Insurance
- In the U.S. and auto insurance industry alike, liability car insurance is a barebones option for drivers. A liability policy covers you if your vehicle causes personal injury or property damage, but does not protect your own vehicle or passengers. Each state sets a minimum requirement for personal and property liability, which varies from $40,000 in Florida to $195,000 in Wisconsin as of 2010. Liability insurance is written as three numbers that represent the minimum amount of coverage required in thousands of dollars. For example, Michigan drivers must purchase 20/40/10 liability, which covers $20,000 in damages if one person is injured; $40,000 if multiple injuries are sustained; and $10,000 in property damage protection.
- In addition to minimum liability auto insurance, 16 states require PIP, or personal injury protection as of 2010, including Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania and Utah. Like liability, your state's minimal PIP requirements will vary. PIP covers medical bills and lost wages if you or your passengers are injured in an accident.
- As of 2010, uninsured or underinsured motorist protection, which covers drivers who collide with third-parties that do not have liability insurance, is required in the District of Columbia and 20 states, including Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Virginia, West Virginia and Wisconsin.
- By meeting your state's minimal liability requirement, you are satisfying your legal obligation as a driver, but you still have your lender to contend with if your car is leased or financed. If your lender requires it, you may have to add comprehensive, collision or other full-coverage insurance options until your ride is paid off in full.
