Please use the arrow on the right side to navigate back to top of this page!

Automobile Insurance is broken into 2 Categories for the different types of Protection it provides:
- The first is Liability Coverage. Liability protects the policy holder in the event they injure someone or damage someone else’s property through the use of their automobile.
- The second type of coverage often referred to as Comp & Collision protects the policy holder incase damage is caused to their own automobile
An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverage’s. If you're financing a car, your lender may also have requirements. Typical auto policies are in force for a period of six months to a year.

The following section will answer many of the questions commonly asked by our visitors. We are constantly updating this section so check back often to get the latest information on what’s going on in the world of Auto Insurance


What are the parts of a Basic Auto Policy?

Do I need to have Auto Insurance?

What can I do to save money on my Insurance?

When I rent a car do I need to have insurance?

How is the price of my insurance determined?

What do I do if I get into an accident and I need to file a claim?

Will the price of my policy increase if I file a claim?

How much coverage do I really need?

What are the parts of a Basic Auto Policy? ↑TOP↑

Your auto policy may include six coverages. Each coverage is priced separately.

1. Bodily Injury Liability
This coverage applies to injuries you, the designated driver or policyholder cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.

2. Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

3. Property Damage Liability
This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

4. Collision
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you're not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you'll also be reimbursed for the deductible.

5. Comprehensive
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.

Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.

Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.
Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.
How is the price of my insurance determined?


Do I need to have Auto Insurance? ↑TOP↑

NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous. If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement. Below is an example of the state minimum limits for auto liability insurance. The first number refers to liability limits for bodily injury for any one person, the second to limits for all persons injured, and the third refers to property damage liability limits. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual and $10,000 coverage for property damage.

			Proof of insurance required (3)
State	Insurance required (1)	Minimum liability limits (2)	At registration	At time of accident	At all times in vehicle	Insurer verification of insurance (4)	Penalties for non-compliance (first offense)
AL	BI & PD Liab	20/40/10	Yes	Yes	Yes	None	$500 fine, license suspension
AK	BI & PD Liab	50/100/25	No	No (5)	Yes	b	Registration suspension/revocation (6)
AZ	BI & PD Liab	15/30/10	No (7)	Yes	Yes	a,b,d	$250 fine
AR	BI & PD Liab	25/50/25	Yes	No	No	d	$250 fine; registration suspension, confiscation of plates (6)
CA	BI & PD Liab	15/30/5 (8)	Yes	Yes	Yes	b	$100 fine; registration suspension
CO	BI & PD Liab	25/50/15	Yes	Yes	Yes	a,d	License suspension, $500 fine
CT	BI & PD Liab, UM, UIM	20/40/10	Yes	Yes	Yes	a,d	Registration/license suspension/revocation, confiscation of plates, vehicle impoundment, $110-$250 fine
DE	BI & PD Liab, PIP	15/30/10	No	Yes	Yes	a,c	$150 fine; registration suspension, confiscation of plates (6)
DC	BI & PD Liab, UM	25/50/10	Yes	No	No	a,c	$100 fine or maximum 30 days jail
FL	PD Liab, PIP	10/20/10 (9)	Yes	Yes	Yes	a,d	60-day license revocation, vehicle impoundment for subsequent offense and confiscation of plates in Dade, Broward and Hillsborough counties (6)
GA	BI & PD Liab	25/50/25	Yes	Yes	Yes	a	60-day license suspension, registration suspension
HI	BI & PD Liab, PIP	20/40/10	No	Yes	Yes	None	$1,000 fine
ID	BI & PD Liab	25/50/15	No	Yes	Yes	a,c	$75 fine (6)
IL	BI & PD Liab, UM	20/40/15	Yes	Yes	Yes	a,c	$500 fine, 60-day registration suspension (6)
IN	BI & PD Liab	25/50/10	Yes	Yes	No	a,b	90 day license suspension, $150 reinstatement fee
IA	BI & PD Liab	20/40/15	No	Yes	Yes	a	$100 fine
KS	BI & PD Liab, PIP, UM	25/50/10	Yes	No	No	d	$100 fine (6)
KY	BI & PD Liab, PIP	25/50/10	Yes	Yes	Yes	d*	Registration revocation, $50 fine, up to 90 days in jail (6)
LA	BI & PD Liab	10/20/10	Yes	No (e)	Yes	a,d	$25 fine, up to $500 fine, confiscation of plates (6), vehicle impoundment
ME	BI & PD Liab, UM, UIM	50/100/25 (10)	No	Yes	Yes	a	$100-$500 fine, 30-day license and registration suspension
MD	BI & PD Liab, PIP (11), UM	20/40/15	Yes	No	No	a,c	$150 fine (6)
MA	BI & PD Liab, PIP, UM	20/40/5	Yes	No	No	a	$500 fine (6)
MI	BI & PD Liab, PIP	20/40/10	Yes	No	No	a	$200 fine (6)
MN	BI & PD Liab, PIP, UM, UIM	30/60/10	No	Yes	Yes	c	License and/or registration revocation for 6 months (6)
MS	BI & PD Liab	25/50/25*	No	Yes	Yes	a	$500 fine**, license and registration suspension
MO	BI & PD Liab, UM	25/50/10	Yes	Yes	Yes	a,c	License and registration revocation (6)
MT	BI & PD Liab	25/50/10	No	Yes	Yes	a	$250 fine or not more than 10 days in jail (6)
NE	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,d	$500 fine (6), license and registration suspension
NV	BI & PD Liab	15/30/10	No	Yes	Yes	a,d	$100 fine (6)
NH	FR only, UM	25/50/25	No	No (5)	No	None	None
NJ	BI & PD Liab, PIP, UM	15/30/5 (12)	No	Yes	Yes	d	$300 fine, community service, 1-year license suspension, vehicle impoundment
NM	BI & PD Liab	25/50/10	Yes	No	No	a,c	$100 fine (6)
NY	BI & PD Liab, PIP, UM	25/50/10 (13)	Yes	Yes	Yes	a,d	1-year license revocation
NC	BI & PD Liab	30/60/25	No	No	No	a,d	60-day registration suspension (6)
ND	BI & PD Liab, PIP, UM	25/50/25	No	No (5)	No	a	$150 fine, registration revocation, license suspension (6)
OH	BI & PD Liab	12.5/25/7.5	No	Yes	Yes	a	90-day license suspension, $75 reinstatement fee
OK	BI & PD Liab	25/50/25	Yes	Yes	Yes	a	Less than $500 fine, less than 6 months jail (6)
OR	BI & PD Liab, PIP, UM	25/50/10	No	Yes	Yes	a,c	License suspension and/or revocation (6)
PA	BI & PD Liab, Med	15/30/5	No	Yes	Yes	a	License and registration suspension, confiscation of plates (6)
RI	BI & PD Liab, UM	25/50/25 (9)	No	No	No	a,c	$500 fine, confiscation of plates
SC	BI & PD Liab, UM	15/30/10	Yes	Yes	Yes	a,d	Maximum $200 fine, less than 30 days jail, license and registration suspension (6)
SD	BI & PD Liab, UM	25/50/25	No	Yes	Yes	a	1-year license suspension (6)
TN	FR only	25/50/10 (9)	No	No	Yes (14)	a	$100 fine
TX	BI & PD Liab	20/40/15	Yes	Yes	No	a	$75 fine; license and registration suspension (6)
UT	BI & PD Liab, PIP	25/50/15 (9)	No	Yes	Yes	a	$400 fine; up to $1,000, license and/or registration loss (6)
VT	BI & PD Liab, UM, UIM	25/50/10	No	Yes	Yes	a	Less than $100 fine (6)
VA	BI & PD Liab, UM	25/50/20	No	No	No	a,b,c	None
WA	BI & PD Liab	25/50/10	No	No	No	a	$480 fine
WV	BI & PD Liab, UM	20/40/10	Yes	Yes	Yes	a	90-day license suspension, registration revocation (6)
WI	FR only, UM	25/50/10	No	No	No	a	License and or registration revocation (6)
WY	BI & PD Liab	25/50/20	Yes	Yes	Yes	a	Up to $750 fine; up to six months in jail
(1) Compulsory Coverages: BI Liab=Bodily injury liability PD Liab=Property damage liability UM=Uninsured motorist PD=Physical damage Med=First party (policyholder) medical expenses UIM=Underinsured motorist PIP=Personal Injury Protection. Mandatory in no-fault states.  Includes medical, rehabilitation, loss of earnings and funeral expenses.  In some states PIP includes essential services such as child care. FR=Financial responsibility only.  Insurance not compulsory. (2) The first two numbers refer to bodily injury liability limits and the third number to property liability.  For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage. (3) Proof of valid insurance.  The form of evidence varies by state and may take the form of an insurance policy, binder, certificate of self-insurance, surety bonds, or certificate of deposit.  Many states require insurance identification cards issued by the insurer.  Self-certification, where the driver is required to identify the insurer and policy number in writing rather than in person, is not included. (4)  a.   Insurer must notify Department of Motor Vehicles or other state agency of cancellation or nonrenewal.        b.  Insurer must verify financial responsibility or insurance after an accident or arrest.        c.  Insurer must verify randomly selected insurance policies upon request.        d.  Insurers must submit entire list of insurance in effect, which may be compared with registrations at a state agency.  Also known as a computer data law. (5)  Insured must provide evidence of insurance at some point after the accident to the Department of Insurance, other state agency, or law enforcement officer.  Deadlines vary among the states. (6) Penalties are provided for in the law but may not be mandatory for first offenses. (7) Proof of insurance must be presented within 30 days of registration. (8) Low-cost policy limits for Los Angeles and San Francisco low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3; pilot program effective January 1, 2000 until January 1, 2007. (9) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state. (10) In addition, policyholders must also carry at least $1,000 for medical payments. (11) May be waived for the policyholder but is compulsory for passengers. (12) Basic policy (optional) limits are 10/10/5. Uninsured and underinsured motorist coverge not available. (13) In addition, policyholders must have 50/100 for wrongful death coverage. (14) Although legally defined as financial responsibility, Tennessee's law is similar to a compulsory law because drivers can be fined if stopped by police or after crashes if they cannot show proof of financial responsibility. *Effective January 1, 2006. **Effective July 1, 2005. Source:  Property Casualty Insurers Association of America; state departments of insurance and motor vehicles.

What can I do to save money on my Insurance? ↑TOP↑

Shop around.
Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.
You buy insurance to protect you financially and provide peace of mind. It's important to pick a company that is financially stable. Check the financial health of insurance companies with rating companies such as A.M. Best ( http://www.ambest.com ) and Standard & Poor’s ( http://www.standardandpoors.com/ratings ) and consult consumer magazines.
Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet.

But don't shop by price alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they make available consumer complaint ratios by company.

Select an agent or company representative that takes the time to answer your questions. Remember, you'll be dealing with this company if you have an accident or other emergency.
Before you buy a car, compare insurance costs.

Before you buy a new or used car, check into insurance costs. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states require insurers to give discounts for cars equipped with air bags or anti-lock brakes.

Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).

Ask for higher deductibles.
Deductibles represent the amount of money you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more.

Reduce coverage on older cars.
Consider dropping collision and/or comprehensive coverages on older cars. It may not be cost effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. Any claim payment you receive would not substantially exceed your premiums minus the deductible. Claims occur on average only once every 11 or 12 years. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley Blue Book ( http://www.kbb.com ). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

Buy your homeowners and auto coverage from the same insurer.
Many insurers will give you a discount if you buy two or more types of insurance from them. Also you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce premiums for long-time customers. But shop around; you may save money buying from different insurance companies despite the multi-policy discount.

Take advantage of low-mileage discounts.
Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Ask about group insurance.
Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or other associations. Ask your employer and groups or clubs though which you belong.

Maintain good credit.
Your credit rating may affect what you pay for insurance. Credit makes insurance rates more accurate, fair and objective. While the use of insurance scoring varies from state to state and company to company, it is a fact that drivers with long, stable credit records have fewer accidents than drivers who don't. Most people have good credit histories, so most people benefit.

Seek out safe driver discounts.
Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also qualify for a cut if you have recently taken a defensive driving course.

Inquire about other discounts.
You may get a break on your insurance if you are over 50 or in some cases 55 and retired or if there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college, generally at least 100 miles away.

When you comparison shop, inquire about discounts for:
$500 deductible
$1,000 deductible

More than 1 car
No accidents in 3 years
No moving violations in 3 years
Drivers over 50-55 years of age
Driver training course
Defensive driving course
Anti-theft device
Low annual mileage
Air bag
Anti-lock brakes
Daytime running lights
Student drivers with good grades
Auto and homeowners coverage with the same company
College students away from home
Long-time customer
Other discounts
*The discounts listed may not be available in all states or from all insurance companies.

But don’t forget that the key to savings is not the discounts but the final price. A company that offers few discounts may still have a lower overall price.

When I rent a car do I need to have insurance? ↑TOP↑

When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and comprehensive, this may be enough.

Before you rent a car:
Contact your insurance company.
Find out how much coverage you have on your own car. In most cases, the coverage and deductibles you have on your personal auto policy would apply to a rental car, providing it's used for pleasure and not business. If you don't have comprehensive and collision coverage on your own car, you will not be covered if your rental car is stolen or if it is damaged in an accident.

Call your credit card company.
Find out what insurance your card provides. Levels of coverage vary.
If you don't have auto insurance, you will need to buy coverage at the car rental counter. The following coverages are available to you at the rental car counter:
Collision Damage Waiver (CDW).
Sometimes called a Loss Damage Waiver (LDW), this coverage relieves you of financial responsibility if your rental car is damaged or stolen. The CDW may be void, however, if you cause an accident by speeding, driving on unpaved roads or driving while intoxicated. This coverage generally costs between $9 and $19 a day. If you have comprehensive and collision on your own car, you may not need to purchase this coverage.

Liability Insurance.
This provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this does not offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance. It generally costs about $9 to $14 a day. If you don't own a car, and rent cars often, consider purchasing a non-owner liability policy. This costs approximately $200 - $300 per year. Frequent car renters sometimes find this more cost-effective than constantly paying for the extra liability coverage.

Personal Accident Insurance.
This provides coverage to you and your passengers for medical/ambulance bills. This type of insurance, usually costs about $1 to $5 per day, but may be unnecessary if you are covered by health insurance or have adequate medical coverage under your auto policy.

Personal Effects Coverage.
This provides coverage for the theft of personal items in your car. However, if you have homeowners or renters insurance, you may be covered for items stolen from the car, minus your deductible. You need to have receipts or other proof of ownership. This type of insurance usually costs about $1 to $4 per day.
Some rental car companies combine personal accident and personal effects coverage together as one type of insurance, while others sell it individually.
The cost of insurance at the rental car counter will vary depending on the rental car company, state, and location of the dealer and the type of
car you rent.
Some rental car companies may check your credit and driving history and may deny coverage. Check with the rental car company to find out its policy.
Note: If you're renting a car abroad, you may need an international drivers license.

How is the price of my insurance determined? ↑TOP↑
There are many factors that influence the price you pay for auto insurance. The average American driver spends about $700 a year. Your premium may be higher or lower, depending on the following:

Your driving record.
The better your record, the lower your premium. If you've had accidents or serious traffic violations, you will pay more than if you've had a clean driving record. You may also pay more if you haven't been insured for a number of years.

The number of miles you drive each year.
The more miles you drive, the more chance for accidents. If you drive a lower than average number of miles per year, less than 10,000, you will pay less. For instance, some companies will give discounts to policyholders who carpool.

Where you live.
Insurance companies look at local trends, such as the number of accidents, car thefts and lawsuits, as well as the cost of medical care and car repair.

Your age.
In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car.

The car you drive.
Some cars cost more to insure than others. Variables include the likelihood of theft, the cost of the car, the cost of repairs, and the overall safety record of the car.

The amount of coverage.
Of course, like anything else, the more coverage you have, the more you pay. However, you may qualify for discounts.

What do I do if I get into an accident and I need to file a claim? ↑TOP↑

Follow these steps:
1. Call your insurance agent as soon as possible, regardless of who is at fault. Find out whether you're covered for this loss. Even if the accident appears minor, it is important that you let your insurance company know about the incident.

2. Ask your agent or company representative how to proceed and what forms or documents are needed to support your claim. Your insurance company will require a “proof of claim” form and, if there is one, a copy of the police report. Increasingly, companies allow you to monitor the progress of your claim on their web site.

3. Supply the information your insurer requests. Fill out the claim form carefully. Keep good records. Get the names and phone numbers of everyone you speak with and copies of any bills related to the accident.

4. Ask your insurance agent or company representative:

Does my policy contain a time limit for filing claims and submitting bills?
Is there a time limit for resolving claims disputes?
If I need to submit additional information, is there a time limit?
When can I expect the insurance company to contact me?
Do I need to get repair estimates for the damage to my car?
Will my policy pay for a rental car while my car is being repaired? If so, how much?

5. Remember, each state has its own laws governing the claims process. If you have any questions, call your agent, company representative or your state insurance department.

Will the price of my policy increase if I file a claim? ↑TOP↑

You may be reluctant to file a claim because you fear that your premium will go up or your insurance will be cancelled. Practices vary from company to company. In general, an insurer will increase your premium by specific percentages for each chargeable claim made against your policy above a specific dollar amount. A chargeable claim is one the insurer considers primarily your fault. The percentages and ceilings vary from company to company. These increases generally stay on your premium for three years following the claim.

Your company may also decide not to renew your policy if your driving record gets markedly worse or you have several accidents. Different insurers have different rules about what constitutes an unacceptably bad driving record. But some accidents, such as those caused by drunk driving, will probably trigger a nonrenewal from virtually every insurance company.

If you have an accident but don‘t report it to your insurer, you are taking a risk, even if the damage seems minor. If the other driver sues you weeks or months later, your failure to report the accident might cause your insurer to refuse to honor the policy. And even if they do honor the policy, the delay will certainly make it harder for the insurer to gather evidence to represent you.

How much coverage do I really need? ↑TOP↑

Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits. If you’re found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!

The Insurance Information Institute (I.I.I.) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident.
If your net worth is more than $300,000, consider buying additional liability insurance. You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverages are exhausted. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.

In addition to liability coverage, consider buying collision and comprehensive coverage. You don't decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it.

Decide on a deductible -- the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.