Why do you think most states require drivers to have liability insurance but not collision or comprehensive?
Liability insurance exists to protect the other driver, their passengers and the vehicle in an accident where you are at fault — that's why it's mandatory in most states. It also pays for any damage you might do to others' property, such as light posts or fencing.
The main reason car insurance is mandatory in almost every state is because of your personal responsibility (liability) if you cause an accident.
Insurance can protect against losing money due to unforeseen circumstances. Purchasing insurance is important to prevent financial burden in case of accidents or theft.
Your vehicle's value is less than a few thousand dollars: If your car holds minimal value, collision coverage may not be worth carrying. This is especially true when a large car insurance deductible is involved.
Comprehensive covers damage to your vehicle from unexpected non-collision incidents like theft, animal damage, falling trees, and weather damage. Collision covers damage to your vehicle that's the result of a collision with another vehicle or object.
Collision coverage is considered an optional coverage because it's not required by any state law. If you lease or finance your vehicle, however, your lender may require it to protect their investment.
Mississippi has the highest rate of uninsured drivers, at almost 30%. In Michigan, New Mexico, Tennessee, Washington and Florida, more than 20% of drivers don't have car insurance.
New Hampshire and Virginia are the only states that do not require auto insurance. However, if you choose not to purchase car insurance in these states, you would still be held liable for any property damage or bodily injury caused by their vehicle.
In 1927 Massachusetts became the first state to require the purchase of auto liability insurance. Since then 48 states and the District of Columbia have followed suit.
Auto insurance helps pay for the injuries and damage that can happen when you own and drive a car or other motor vehicle. This guide can help you compare policies and make informed decisions when you buy auto insurance.
Why is it important to have insurance?
Insurance is your financial plan's safety net – having the right insurance at the right amount protects you and your family from unforeseen events and provides a baseline financial cushion.
Coverage refers to the range of protection you are eligible to receive from your insurance plan. The premium is the amount you pay the insurance company for coverage. Premium payments may be due all at once or divided and paid on a regular basis, usually monthly.
It is basically "property damage coverage" for your car when you get into a collision. Some people think they don't need it, especially if their car is older which is just bad logic. You always need it to protect you from losing money on your car damage in any type of injury case.
What does it mean if you don't have collision insurance? Not having collision insurance means your car is unprotected if you cause an accident or hit a stationary object. So, with no insurance, a car totaled means you'll have to pay to repair the damage to your vehicle or replace it outright with no help.
Collision insurance rates are based, in part, on the likelihood you'll get in an accident that requires repairs or replacement of your car and how much those expenses will cost.
Since a lower deductible equates to more coverage, you'll have to pay more in your monthly premiums to balance out this increased coverage. A survey commissioned by InsuraQuotes found that an increase in deductible from $500 to $1,000 had an average of 8-10% reduction in premium costs.
You typically can't buy comprehensive coverage by itself. Each state has its own minimum car insurance requirements, so you'll need to purchase those types of coverage along with comprehensive coverage. Insurers may also require that you purchase collision coverage along with comprehensive insurance.
A liability is something that a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.
If your car is damaged in a road collision with another car or object and you're at fault, only your collision coverage can help pay to repair it. Only comprehensive coverage covers losses caused by contact with animals, civil disturbances, fires, natural disasters, theft, and vandalism.
Car insurance is required by law in all states, except in New Hampshire and Virginia. In New Hampshire, drivers are only required to show proof of their financial capability to cover for injuries and damages for accidents that they cause.
Is comprehensive insurance required in all states?
Is it required? Comprehensive insurance isn't mandatory in any state, but most lenders require it if you finance or lease your car. And when you buy comprehensive insurance, you'll likely have to also get collision insurance, which pays for damage to your car from traffic-related causes. Ready to dive deeper?
These laws attempt to ensure that every driver who could potentially cause an accident has insurance to cover a minimum level of costs for any injury and damage. In this way, state-mandated car insurance ensures drivers can be accountable for the risk that comes with driving a vehicle.
New Hampshire and Virginia are the only two states that don't require car insurance.
In every state except New Hampshire, not having insurance is illegal. You could face fines, penalties, license suspensions or revocations, and/or registration suspension and revocations. See below for your state's penalties for not having insurance (or proof of financial responsibility).
This is to help make sure that people will have coverage to help if they're injured in an auto accident. This coverage is often in addition to auto coverages like Bodily Injury and Property Damage.