Minimum Car Insurance Liability Coverage

Basic Rules for Minimum Liability Coverage to Drive a Car

Auto Insurance minimum liability requirements are set by the state. However, these basic rules should help you understand the basics, no matter where you live.

We all want cheap auto insurance. Of course, as with anything else in life, how cheap you can get your auto insurance is directly related to how hard you are willing to work at finding the best policy. Insurance can be complicated but finding the best deal on auto insurance is not rocket science. Of course if you want to find insurance for your rocket that really could be difficult. Your first order of business is to have an understanding of what comprises an auto insurance policy.

If you understand what makes up the policy you can compare apples to apples.

In other words, compare quotes for the same dollar amount of coverage and the same components of coverage. There are six different kinds of coverage that make up the policy. Most states require you to buy some, but not all, of these kinds of coverage. If you’re financing a car, your lender may also have require you to purchase certain components. Here are all the components of an auto insurance policy:

Bodily Injury Liability – This coverage pays for injuries you cause to someone else.

Medical Payments or Personal Injury Protection - This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car.

Property Damage Liability -This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property.

Collision - This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes.

Comprehensive - This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object.

Uninsured Motorist - This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.

Now you have to decide what dollar amount of each of these you need. Experts recommend you carry these amounts:

• Bodily Injury Liability/each occurrence $300,000
• Property Damage Liability/each occurrence $100,000
• Medical Payments/each person $10,000
• Uninsured Motorist Bodily Injury Liability/each accident $300,000
• Uninsured Motorist Property Damage/each accident $10,000

Notice comprehensive and collision are not among them. States do not require that you carry collision or comprehensive but if you have a car loan you may be required to carry these. So, if you need to add these to your list to compare quotes do so. Now you have completed your basic auto insurance education.

Also read about ways to obtain cheaper car insurance and the cheapest cars to insure.

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