What level of auto insurance do you need? » CAR BUYING » Car-Revs-Daily.com

Insurance is one of the most confusing financial responsibilities we all have. Even when looking at a particular type of insurance, you have to sift through a ton of information. This is certainly the case with car insurance. The complexities can make you want to just give up, but unfortunately that’s not an option.

In almost every US state, some level of auto insurance is required by law. Driving without insurance can result in the suspension of your license, among other penalties. And, if you cause a collision, you could find yourself in a difficult financial situation.

Why is auto insurance required by law? The answer lies in the type of car insurance required. You are not required to take out personal insurance, although it is recommended. You can play with the possibility of losing an expensive asset and having to pay your own medical bills. However, when it comes to your responsibility to others, you cannot avoid responsibility.

Therefore, the insurance you must have by law is motor vehicle liability insurance. Liability insurance pays for claims others make against you in a case where you are at-fault in a collision.

What types of auto liability insurance are there and what insurance do you need? Here’s what you need to know.

Civil liability for bodily injury

The first type of liability insurance we will discuss is bodily injury liability. The answer to what does bodily injury cover? has a number of facets, all of which are unique to the people you injure in a collision.

Personal injury liability covers expenses that arise when someone is injured in a collision you cause. This not only includes their immediate medical bills, but also other bills that arise due to long-term complications of their injury.

Your responsibility doesn’t end with medical bills, however. You may also be required to pay for lost earnings due to the injury. In cases where the person is the primary caregiver for the children, you may have to pay for childcare.

The amount of bodily injury liability you are required by law to get ranges from $10,000 to $50,000, depending on the state. However, you may want to get higher coverage, as in many circumstances, expenses are piling up. This is especially true if you injure more than one person in the collision.

Without civil liability, you will be required to pay these expenses out of your own pocket. If your insurance does not fully cover the individual’s bills, you may have to pay the difference.

Liability for property damage

Of course, you are unlikely to only cause injuries in a collision. In all likelihood, you also damaged the person’s car or personal property. These are also your responsibility to pay. For this, you need property damage liability insurance.

As with medical expenses, these expenses can skyrocket very quickly. If you damage a car that is used for personal income purposes, such as carpool drivers, you may have to pay the loss of income from your property damage liability insurance.

When purchasing liability insurance, these are the two types of liabilities you need to consider. You should try not to skimp on liability insurance, as you can end up in serious financial and even legal trouble.

There are states where liability insurance is not required by law, and in some cases you can prove that you have the equity to pay any future claims. However, you should still have liability insurance because it will save you a lot of money if something happens.

Personal coverage

Liability insurance does not cover your own medical expenses or car repairs. Although these are paid if someone else hits you, you should get personal coverage in addition to liability coverage. The reality is that accidents do happen and the loss of a car you’re still paying for or the large medical expenses that can result can lead to serious financial hardship.

Motor vehicle liability insurance is the bare minimum you should get, including bodily injury and property damage coverage. But even if the law doesn’t require it, you should also consider getting personal coverage.

Car insurance can seem complicated, and there is still the matter of deductibles and premium calculations to discuss. However, the information above gives you the basic understanding you need of the types of auto insurance you can’t live without.

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