Looking at Required Minimum Car Insurance from a Legal Standpoint


You probably know that you need car insurance if you’re going to get behind the wheel. But how much do you need? The answer is that it varies state by state.

Some states require quite a bit more car insurance than others do. Others will penalize you in various ways if they catch you driving without it.

Let’s examine these matters a little more closely as you try to determine what kind of auto insurance you need.

Why Must I Get Car Insurance, Anyway?

You might feel like you don’t need car insurance if you’re a careful driver. However, car accidents occur all the time, and you need to be ready for that, even if you have a spotless driving record. A car accident can happen because of:

  • Distracted driving
  • Drunk driving
  • Poor road conditions
  • Poor weather conditions

You need auto insurance because things sometimes happen over which you have no control. Also, even the most careful driver can make a mistake.

Liability Insurance

Most states agree that drivers need liability insurance. This is insurance that:

  • Pays for other peoples’ bodily injuries if you cause a crash
  • Pays for property damage if you cause a crash

The law considers an accident to be your fault if you disobey a traffic law. If you run a red light, for example, and someone T-bones you as a result, that’s your fault. The liability coverage will repair the damage to their car or inanimate objects you hit.

What Happens if the Law Catches You Driving Without Liability Insurance?

Some people do try and get away with driving without the minimum liability insurance amount the law says they need. If you do that, and you cause an accident, then some states will suspect your license. You also may have to pay some hefty fines.

You will have to appear in court, and you will not be eligible to get compensation for your vehicle’s damage, either.

Insurance Gives You Financial Protection

Car insurance is a way for you to protect your financial assets, including your vehicle. With the right coverage, you can repair the damage, which otherwise would have to come out of your pocket.

If you have the proper insurance, then the insurance provider must pay for the repairs, regardless of whether the accident was your fault.

If you caused the crash, they may drop your policy or raise your premium, but that’s something you can deal with afterward.

Collision Insurance

Collision insurance is different than liability insurance. Most states don’t require collision, but that doesn’t mean you shouldn’t consider it.

Collision is a specific car insurance type that covers the cost if you hit another vehicle. It might surprise some people that the average liability coverage does not cover your vehicle repairs if your accident involves you hitting another car or another car hitting you.

Collision coverage is another fee that you need to pay every month, or every quarter or year if you’d prefer to do it that way. Some people feel like, since the law doesn’t always require it, they can get along fine without it.

That attitude might prove disastrous if you hit another car, it’s your fault, and you didn’t have collision. You might not get a cent back for a totaled vehicle, other than a couple of hundred dollars from selling it to a scrap yard.

Auto Loans

You might get a loan to pay for your car. There’s nothing wrong with that, but if you do it, you should think about the insurance that you need.

You will probably need to get an insurance policy with high coverage limits. That’s to protect the car, which the lending party considers an asset. The car is worth money, and you haven’t paid for all of it yet.

Under the loan terms, you probably need better-than-average insurance to cover the car if something happens to it. If you neglect to get that coverage, and then you wreck the car that you haven’t paid for, you’re violating the loan terms, and you’re going to get stuck with a hefty bill.

Figuring out what kind of car insurance you need can be challenging. You’ll need to do some research, starting with how much and what coverage your state requires.

You won’t always want to get just the minimum. You might find it onerous paying what seems like extra money every month, but not having that additional coverage is a gamble that you probably don’t want to take.


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