There are multiple types of auto insurance in the USA, and most states require liability insurance. However, Virginia and New Hampshire are the states that do not require auto insurance, and you, being a driver, can only pay a state’s fee. When you cause damage to the properties or injure someone in an accident, the liability insurance gets you coverage for such losses. What type of automobile insurance is required by law, and where? Find the details below.
No one knows which trip can become a horrible memory, and getting a financial shield gives you a relaxed corner. The rules and regulations never remain the same, and by the time they change, so do the auto insurance requirements. You can also pick the auto insurance policy that better suits your needs out of collision insurance, comprehensive insurance, PIP, Gap insurance, etc.
What is Automobile Insurance?
Automobile, car, and auto insurance are all the same. It is an agreement with legal repercussions between an insurance company and the policyholder. If you own a vehicle in the USA, you must be familiar with auto insurance requirements. The insurance policy asks for specific sums to submit to the insurance company, and you get the benefits of loss coverage in return.
Through this contract, you get financial coverage from the insurance company against multiple risks and losses associated with your journeys. It has various types, and the most popular one is liability insurance. What is car insurance? It is the same as you know about auto insurance. Before I take you to the details, types, features, and more, you can also learn what does automobile insurance cover.
Types of Automobile Insurance
You may know what Automobile insurance is and what it covers. In this section, you will understand different types of Automobile Insurance, what each type covers, and how they work.
1) Liability Automobile Insurance
The most common type of Automobile Insurance and required almost in each state. It covers two types of insurance:
2) Bodily Damage Liability
Any Bodily Injury caused by your vehicle in an accident, then bodily damage liability covers it. Such as paying the driver’s and passengers’ medical bills and any legal expenses if the other party prosecutes you after an accident.
3) Property Damage Liability
Suppose the other party’s vehicle or any property, such as a building, gets damaged during an accident, and you are at fault. In that case, property damage liability covers it, such as repairing the vehicle or repairing the damaged part of any property. It also covers if you are entrapped into a sued.
4) Collision and Comprehensive Automobile Insurance
The collision insurance covers if your car collides with another vehicle or any building, even if you are at fault. Comprehensive insurance will cover your vehicle’s damage in a non-collide event such as Rain, Flooding, Theft, hit by an Animal, falling trees, etc. Collectively, these insurance types give you a Full-coverage Protection.
5) Personal Injury Protection Coverage
As the name suggests, this insurance type will cover your damage regardless of who is at fault, such as injuries to you and your passenger in an accident, medical bills, and funeral expenses. PIP only works in the No-Fault States, and Florida, Hawaii, Kansas, New Jersey, and New York are under No-Fault States.
6) Medical Payment Insurance
If you get injured in a car accident, then MedPay will cover all your medical expenses. It works just like health insurance. It will cover hospital stays, Surgeries, MRIs, X-rays, and funeral expenses. It will benefit you if you still need a health insurance policy.
How Auto Insurance Works?
Automobile insurance works differently as per law in each state. Furthermore, it also depends on the extent of damage you face in an accident. Liability insurance is for you if you are responsible for bodily and property damage. Comprehensive insurance will cover all the damage caused to you in any accidental event. In addition, an agent will decide what type of Automobile Insurance is required by Law as per state.
Do All States Require Auto Insurance?
After researching, we concluded that some states don’t require Auto Insurance. Instead, they need some financial aid to drive a car. New Hampshire and Virginia are the only states that don’t require any Auto Insurance. Except these, almost all states require Auto Insurance as per their Law.
Some states that cover only a few types of Auto Insurance, like Bodily Insurance will not work in Florida. Some states allow drivers to adopt the insurance in other ways to drive cars publicly.
What Type of Car Insurance is Required by Law in Florida?
In the USA, all states require some auto insurance. So, in Florida, Property Damage Liability (PDL) and Personal Injury Protection (PIP) are considered mandatory. Without these, you are now allowed to drive a car publicly as per their law. Apart from these two, drivers can decline other insurance policies if they can finance an automobile.
It is just like a contract between parties where types of insurance and the minimum amount parties agree to give to connect with the insurance policy. In most states, minimum insurance requirements may vary between $25,000 to $50,000.
This may vary from insurance type. Such as for bodily damage, you must purchase $15,000 insurance per person, while for property damage, it may exceed $25,000. In comprehensive insurance, you must have $100,000 to $500,000 to purchase the Insurance Policy.
After reading a comprehensive guide on What type of Automobile insurance is required by Law hope you understand it well. We described what Automobile Insurance is for which state it is mandatory and for which it is not. We also mention some types of Automobile Insurance In the US. We also mentioned which type will fit best in each state according to their law. Property Damage Liability and Personal Insurance Protection will benefit you in Florida and many other states, while You may decline other Insurance such as Bodily and Medical Insurance. It becomes easy for you to know about Insurance Policies and their types.
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