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Car insurance requirements by state

While you do—ultimately—have a choice whether to carry car insurance, each state has its own requirements when it comes to car insurance. In general, those who own or drive a vehicle need to have:

  • Bodily injury liability: This applies when you’re at-fault while operating your automobile. The coverage pays for bodily injury to another person.
  • Property damage liability: This applies when you’re at-fault while operating your automobile. The coverage pays for damage to another person’s property.
  • Uninsured/underinsured motorist protection: If you’re injured in an accident involving an at-fault driver who doesn’t have enough insurance to pay for your loss, this coverage can help pay for your bodily injury. Many states require this coverage to be offered, but allow the insured to opt out or reject the coverage in writing.

These requirements are in place so there’s some measure of financial responsibility for drivers. Each state has its own requirements as to the minimum limits for these coverages. As an example, one state might have a $15,000 minimum limit for a bodily injury liability and another might have a minimum of $25,000 for the same coverage.

However, if you’re traveling from one state to another that has different minimum requirements and get into an accident, as long as you’re carrying auto insurance, the minimum limits will automatically adjust.

Behind the numbers

You’ve no doubt seen the slash line that looks something like this on your insurance documents: 25/50/15 or $25,000/$50,000/$15,000. Those numbers reflect the limits in your car or auto insurance policy. The first number is the amount covered per person for bodily injury. The second number is the amount covered per accident for bodily injury, and the third number reflects the amount per accident for property damage. In essence, those numbers could be interpreted like this:

  • Bodily injury per person/bodily injury per accident/property damage per accident

One thing to keep in mind is that these are the coverage limits purchased, but they might not cover the costs of an incident. Be sure to understand the risks of your coverage limits, and choose an amount that is best suited to your situation.

Go over your entire auto insurance policy with your insurance agent, and ask questions if you don’t understand something.