In order to register a motor vehicle and operate it legally in most states, there are specific kinds of auto insurance that are required by law. The auto insurance requirements for certain states will most always include the minimum insurance liability coverage; however, the amount of coverage will vary by each state. The laws have outlined the requirements for each individual state for the amounts of insurance coverage that will be necessary to operate a vehicle legally. However, the state insurance requirements may not be sufficient for your specific situation and it would be advantageous to obtain an adequate amount in order to protect your assets and for your future protection.
Tort or No Fault State Requirements
In some states there has been a particular model implemented that is called the no fault model that has been made to protect all parties involved. The no fault plan was designed in 1973 to provide protection to both the motor vehicle driver and insurance company. It has been adopted by many states now and is becoming more of an asset to them because everyone is covered without having to decide fault. Basically, the insurance company of each policy holder takes care of their own insured vehicle and driver.
When you live in a tort state it means that there will be a determination of which driver was at fault in the accident and who will be responsible for damages and injuries. The automobile drivers in a tort state will be held responsible for any accidents in which they are deemed at fault. This is the difference between a no fault state and a tort state which determines the required types of auto insurance for the state. The states that have incorporated the no fault model include the state of Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah. All of the other states are considered to be tort states.
Living in a no fault state, as opposed to one that is described as a tort state, is primarily why it is necessary to obtain a Personal Injury Policy to protect drivers from possible losses that may result in accidents involving uninsured drivers. It is also a good thing for when the driver who is at fault may not have enough insurance coverage to cover the expenses. This is one of the required types of insurance in order to comply with the law of a no fault state. If you live in a state that is considered to be one of the states that are no fault states, having protection for personal injury is very important. When a state is a no fault one, it means that regardless of who is at fault, the insurance company will need to pay for injuries incurred.
The primary types of no fault insurance coverage that is mandatory according to the state law are property protection insurance and PIP, which stands for personal injury protection. Also, there may sometimes be required a coverage for bodily injury liability and property damage. Comprehensive and collision insurance is optional in most states, however, it may be a wise choice when protecting your vehicle. This type of voluntary insurance would be especially necessary if you have financed your automobile. In fact, it probably will be required by your lender so that they won’t lose everything if your vehicle is ever damaged beyond repair. Some financial institutions will actually place an insurance coverage on the auto loan that is to be paid in your monthly loan payment.
How to Read the Numbers for Required Liability Insurance
The state auto insurance requirements are described as three numbers that break down like this: the amount of bodily injury liability limits/amount of injury liability per accident/total property damage coverage for each accident. An example would be if your state has a minimum amount of coverage for property damage and bodily injury liability that is seen as these three numbers; 20/40/10. These numbers represent the specific amounts of coverage which are $20,000 for each person when bodily injury is involved, $40,000 for each automobile accident, and $10,000 for the total amount of insurance coverage for damaged property. The damaged property covered can be automobiles, sheds, trees or fences; anything that belongs to another person that has become damaged.
Property protection insurance is used to cover property that is damaged within your state and this includes any damage that may result to properly parked cars, as well as personal property. The property damage liability coverage will also cover any damages to property outside of the state in which you live.
The other type of non fault insurance that some state laws deem mandatory is personal injury protection or often it is called PIP. This is for your own protection when personal injury occurs that would possibly entail medical costs, loss of work and hospitalization. The requirement is very beneficial if you are injured and cannot go to work because it allows compensation for up to three years for lost income. This is also a great insurance coverage if your current health insurance does not reimburse for lost pay.
It is also important to know that if you are ever involved in an accident or a traffic violation in your specific state, you will need to present the proof of insurance certificate to the law enforcement officer. By keeping your proof of insurance papers in your glove compartment, it will allow you to show proof when it is requested. If you cannot show the proof, however, you will be in danger of a license suspension. A fee of up to $125 may be needed to have your drivers’ license reissued. It is the law to be properly insured and to be able to provide proof of the insurance when it is necessary.
The bottom line when complying with your state auto insurance laws is to obtain the obligatory amount of auto insurance that will be required in order to legally register a vehicle with the state. It is imperative to get the correct amount of coverage or the vehicle registration will not be issued. By doing so, you will stay safe and legal at the same time.
