In the United States, 47 states by law require liability auto insurance and at least another 15 states require Personal Injury Protection (PIP) insurance. If you are a driver and not familiar with the requirements in your home state, or you have plans to move to another state, it is in your very best interest to do some research and get educated on that state’s minimum auto insurance requirements and then try to find a way in your budget to exceed them when finally committing to an auto insurance provider. Minimum requirements may not always cover your losses in the event of a serious accident.
Some auto insurance terms might be helpful to know. Liability insurance pays for any bodily injury or property damage that you might have caused to another driver. Personal Injury Protection pays for your own medical expenses and lost wages should you get into an accident. Uninsured motorist coverage will cover you if you get in an accident with an uninsured or under-insured driver. About 20 U.S. states are No-Fault states where auto insurance companies are required by law to pay the losses covered by the policyholder, no matter which party might have been at fault in an accident.
Split Limits are a series of three numbers that most auto insurance policies use to describe the amount of liability coverage. These will vary from state to state. For instance, if your coverage reads 25,000/50,000/25,000, the first number ($25,000) is the maximum the auto insurance will pay for bodily injury to one person in an accident. The second number ($50,000) is how much the auto insurance will pay for bodily injury, no matter how many people are injured in a single accident. The last number ($25,000) covers the maximum amount to damages to someone else’s property. A “combined single limit” (or CSL) number is the maximum liability coverage for bodily injury and property damage combined, no matter the number of people involved or amount of property damage. However, all limits are based per accident.
There are many common sense factors that will affect the ultimate price of auto insurance, such as what type of car you drive, your driving record, who you are statistically and the risk you represent (mostly age-wise), and, of course, the state you live in. The more you drive, your chances of being in an accident are higher, no matter your age, gender, or location. Auto insurance generally costs more in urban areas than rural areas, due to higher occurrences of accidents or vandalism. Drivers who are prone to accidents or traffic violations will be paying more for auto insurance than safe drivers will. A sports car costs more to insure than a basic family car because of the high theft rate.
By finding out your state’s requirement’s, as well as your own auto insurance needs and the coverage you need for your car, you should be able to find the policy that’s right for you.
