Is it Mandatory to Have Car Insurance in Every State?

June 17, 2019

48 out of the 50 states require drivers to carry car insurance. That’s how important it is to protect yourself while on the road. Carrying car insurance shows that you are financially capable of handling any type of accident that occurs. If you didn’t carry insurance, you’d be a financial liability on the road.

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Each state has different requirements regarding the coverage that you must carry. We don’t recommend sticking to your state’s minimum requirements, though. Use the guidelines to see how they stack up to what you need, but it’s typically not a bad idea to take more insurance than your state requires.

Bodily Injury Liability

All states (except Florida) require you to carry bodily injury liability insurance. This coverage protects you financially should anyone else experience injuries from the accident. Each state has a different minimum requirement that varies from $15,000 (per person) to $50,000 (per person. Some states have minimum amounts you must have per accident too.

Property Damage Liability

All states require property damage liability coverage. This coverage protects you should you damage other property as a result of the accident. This doesn’t cover damage to your own car – it only protects the other cars or property that you may damage. Most states require you to carry between $10,000 and $25,000 in property damage liability insurance.

Uninsured/Underinsured Motorist Coverage

Some states (about half) require you to carry insurance should you get involved in an accident with an uninsured or underinsured motorist. These coverages step in when you are involved in an accident that isn’t your fault, but the at-fault driver doesn’t have adequate insurance. Uninsured coverage protects you should the driver not have any insurance and underinsured takes over if the at-fault driver doesn’t have adequate enough insurance to cover the cost of the damages.

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Typically, states require bodily injury and property damage liability insurance. If you damage your own car or yourself, the risk is on you. But if you are going to drive on the roads, you have to have protection to pay for damages that you may cause to other people or other properties.

Looking at the Coverage

The important thing is to look at the coverage. Many people make the mistake of sticking with the minimum amount required by the state. Let’s say the minimum bodily injury liability is $10,000 per person. If you are involved in a serious accident that sends the other driver to the hospital for seven days, the bills will be much higher than $10,000. The amount that remains would become your personal liability. Instead, you could have taken higher bodily injury liability insurance in exchange for a slightly higher premium each month and protected yourself.

Before you settle on any amount of insurance, talk with your insurance agent about the worst possible outcome. How do you see yourself coming out of that situation? If the insurance isn’t adequate enough to cover what you need, you may want to consider higher insurance. Of course, at a minimum, you need to meet the state’s requirements, but generally, you’ll want more.

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