What is the minimum auto insurance coverage I am required to have?


The minimum auto insurance you can buy varies from company to company. If you want to minimize your car insurance premiums, you should look for an automobile insurer that offers a basic liability package.

Depending on the state you live in, minimum auto insurance packages can include a basic liability package, or basic property damage and bodily injury coverage without any protection against damage to your auto.

Minimum Does Not Equal Adequate

In some states you must have at least basic automobile insurance subject to specific minimums, while others do not have such a prerequisite but still expect you to provide proof that you have sufficient funds to cover the costs and damages if you cause an accident. But whereas minimum auto insurance is designed in compliance with each state's liability regulations, it typically does not provide any compensation to you if you suffer from a physical injury or damage to your automobile in the event of a road accident.

A minimum auto insurance coverage is a double-edged sword: it might indeed provide basic protection against financial liability but it can leave you grossly underinsured if you get involved in a car accident and you suffer bodily injuries or physical damage to your auto. In fact, the recommended physical injury coverage is a minimum of $100,000 per person and $300,000 per accident.

Some states have a no-fault auto coverage law providing that minimum auto insurance covers the medical expenses for the driver and the passengers of the insured auto, no matter whose fault the accident is.

Minimum Auto Coverage by State

Each state has its own auto liability limits. For example, if you live in California, the minimum liability limits are $15,000 for injury liability per person, $30,000 for all injuries and $5,000 for property damage in an accident. The state of California does not require you to have personal injury protection and uninsured motorist coverage.

However, if you live in the state of New Jersey, the minimum liability limits are the same amounts as the ones in California, but you must have personal injury protection, no fault state and uninsured motorist coverage.

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