Automobile Insurance Rules

Depending on the state where you live, you will be subject to different automobile insurance rules. Each one sets their own regulations regarding motor vehicles, but one fact remains constant no matter what part of the country you live in: you are required to be covered by an auto insurance policy to drive legally.

Find out the insurance requirements for your state.

Each state requires that drivers have at least a certain minimum level of liability coverage in place. Liability insurance is designed to protect you from financial consequences if you are involved in an accident where you are considered to be at fault.

Bodily injury liability insurance pays for medical expenses of your passengers or people in another vehicle. This portion of your policy will also pay for legal expenses if you are sued as a result of the accident.

It's important to have this type of insurance coverage in place to protect your hard-earned assets. If a serious accident were to happen, medical expenses can add up very quickly. Your insurance company will pay out up to your policy limit only, and you will be personally responsible for any additional amounts owing.

If you don't have the cash on hand (and many people wouldn't), you will be looking at selling off your assets to pay the claim. Medical expenses are a leading reason for declaring bankruptcy in the United States, and buying as much bodily injury liability insurance as you can afford is a way to avoid this scenario.

You can buy bodily injury auto insurance to cover one person injured in an accident, with a cap set for all people injured in the same accident, regardless of the number of injured people. For example, you may have a policy that will pay $50,000 for one person's injuries but max out at $100,000 for all injuries sustained in that accident.

The minimum levels set by the state where you live are the legal minimum levels of coverage only; you are always free to buy more coverage if you want to.

This type of liability insurance pays to damage to the other driver's vehicle, as well as the cost of repairing or replacing a fence post, mailbox, garage, shed, or other type of building.

The minimum legal requirement for liability insurance can be expressed in a series of three numbers. For example, the expression "20/40/10" means that you are required to carry at least $20,000 in bodily injury liability insurance for one person's injuries, $40,000 for all injuries stemming from the same accident, and $10,000 in personal property coverage.

Some states have instituted automobile insurance rules directing that drivers must also buy coverage that pays for their own injuries sustained in an accident. Coverage for lost wages may also be required by law.

The best place to get current information about auto insurance rules for your state is to visit the appropriate Department of Motor Vehicles web site. If you are moving to another state, be sure that you will have the appropriate level of auto insurance coverage in place.

In a situation where you are not sure how much insurance to buy over the minimum, consult with an insurance agent. He or she can sit down with you to analyze your needs and make a recommendation about the right level of coverage for your needs. Most people tend to underestimate their insurance needs, as opposed to having too much insurance.

Another thing you need to keep in mind in the case of bodily injury coverage is that healthcare costs are not going to decrease with time. Make a point of reviewing your level of coverage on a regular basis to make sure you are adequately protected.

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