Car Insurance Laws by State: An Overview

Auto insurance laws in the United States vary from state to state, but they all mandate some form of car insurance or proof of financial responsibility. While it may seem like an additional expense, car insurance serves to protect you, your family, and your vehicle in the event of an accident or damage.

Here’s a general overview of the types of auto insurance coverages that state car insurance laws may require:

Bodily Injury Liability

Bodily injury liability coverage pays for injuries that you, the policyholder, or designated drivers cause to someone else. It may also extend to cover family members driving someone else’s car with permission.

Medical Payments or Personal Injury Protection (PIP)

State car insurance laws typically mandate medical coverage that pays for the treatment of injuries sustained by the driver and passengers of the policyholder’s car. PIP may cover medical expenses, lost wages, or other costs resulting from an accident.

Property Damage Liability

Property damage liability insurance covers damage that you (or someone driving your car with your permission) may cause to someone else’s property. This can include damage to vehicles, lamp posts, telephone poles, fences, buildings, or other structures that your car collides with.

Collision Coverage

Collision coverage protects you if your car is damaged in an accident involving another vehicle or object, or if your vehicle flips over. It may also cover damage caused by road hazards like potholes.

Comprehensive Coverage

Comprehensive coverage reimburses you for losses resulting from theft or damage caused by incidents other than collisions. This can include fires, falling objects, earthquakes, windstorms, hail, floods, vandalism, or contact with animals. While states typically don’t mandate collision or comprehensive coverage, your lender may require it if you have an auto loan until the loan is paid off.

Uninsured and Underinsured Motorist Coverage

• Uninsured motorist coverage reimburses you, your family members, or a designated driver for damages incurred if you are hit by an uninsured or hit-and-run driver.
• Underinsured motorist coverage comes into play when an at-fault driver doesn’t have sufficient insurance to cover your total loss. This coverage may also protect you if you are struck as a pedestrian.

State-specific auto insurance laws can vary in terms of minimum coverage requirements and other regulations. To ensure that you comply with your state’s insurance laws and have the appropriate level of coverage, consider obtaining an auto insurance quote or consulting with a local insurance agent who can provide guidance tailored to your state’s requirements.