What Kinds of Auto Insurance Do Most States Require?

by Christy Bieber | Updated July 15, 2021 - First published on July 14, 2021

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Make sure you know your state's rules for car insurance.

If you're going to drive a car, you are most likely going to need some type of auto insurance.

Most, but not all, states mandate that you buy specific kinds of insurance protection. If you do not have the car insurance that's required by law, you could end up having to go to court and face fines and other penalties. You could also face significant out-of-pocket costs if something goes wrong.

While you should check your individual state's requirements to understand the minimum coverage you need, here are some common types of car insurance you'll likely have to buy in most parts of the United States.

Bodily injury liability

Bodily injury liability coverage is insurance that pays someone else if you cause them injury. For example, if you cause a crash and someone suffers a broken leg because of it, your bodily injury liability policy could cover the costs of their medical bills and lost wages due to the damage you caused.

The minimum amount of bodily injury liability coverage you need varies based on where you live. Many states require you to have $25,000 per person in coverage and $50,000 per accident in coverage.

If you live in a state that requires $25,000/$50,000 coverage, that means that if you got into a car crash and there were three victims, your policy would pay up to $25,000 for each of the three people that were hurt. But it would only cover a grand total of $50,000 in injuries from that specific accident.

If each of the three people suffered $10,000 in damages, you'd have enough coverage -- but if they each suffered $20,000 in damages, you'd be $10,000 short of the full amount your car insurance company will cover.

Often, it's a good idea to pay for more bodily injury liability coverage than is required. After all, it's very easy for an accident to do a lot of damage. And if you don't have enough coverage, victims could come after you directly for compensation.

Property damage liability

Property damage liability pays for damage you cause to someone else's property if you get into a crash. That means it could pay to repair someone else's car you damaged. Or if your vehicle hit someone's house after it spun out of control, your property damage policy would cover repairs.

Many states require between $10,000 and $15,000 in property damage liability, although limits can vary. Again, there's a really good chance this isn't going to be enough to cover all losses if a crash happens. So when you are shopping around for car insurance quotes, make sure to buy more than the minimum amount of coverage required.

You may also need these other types of insurances in some states

Although bodily injury liability coverage and property damage liability coverage are required in a majority of U.S. states, there are some additional types of auto insurance your state may require. Some, but not all, states mandate you have:

  • Personal injury protection (PIP): This type of insurance pays your own bills and lost wages up to a certain amount (such as $10,000). States that require PIP are usually "no-fault" states. That means that, regardless of who is at fault in an accident, each person turns to their own PIP coverage to pay for minor damages. The driver who caused the crash isn't liable for covering the injuries of others unless they are serious ones.
  • Uninsured/underinsured motorist coverage: Some states mandate you get this protection. It pays for your losses and damages if a driver with too little insurance harms you or damages your property in an accident they were at fault for.

You have to buy the minimum coverage your state requires, so make sure to determine if your state mandates these extra protections. And, in some cases, you may also want to buy coverage that isn't required in order to protect yourself and your assets. For example, collision and comprehensive insurance can pay for your property damage after a crash you cause or if other problems occur, such as hail damage or theft.

Having the right coverage is important both to be in compliance with the law and to ensure an accident doesn't cause financial devastation that's impossible to recover from. Research all of your options, be sure to figure out how much car insurance coverage you need, and get the coverage that's right for you.

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