Things You Should Know About Purchasing Car Insurance In The USA
Although auto insurance is a recurring expenditure, it is an important one since it will cushion against financial liability or loss if your vehicle is involved in a collision resulting to property or physical damages. In the united states, car insurance rules vary from state to state, but in most cases, liability insurance is required as a proof of financial responsibility, or in other words, to show that you, as the car owner, can cover the cost of damage to other people or property in the event of an accident where you are at fault.
A few states, like Wisconsin, have less stringent proof of financial responsibility rules. In Virginia, insurance is also not required, and people living there can instead pay the state a yearly fee, about $500 per vehicle, if they opt out of buying liability insurance. In contrast, there are a few states such as North Carolina where it is mandatory for you to buy liability insurance prior to the issuance of a driver's license. Because of these differences in insurance requirements, it is wise to consult your states transportation bureau.
Understanding USA car insurance requirements
When reading about your states insurance requirements, you would probably encounter numbers such as 25/50/25. The first two numbers refer to bodily injury liability limits and the third number is the property damage liability limits. To elucidate, 25/50/25 signifies each individual hurt in a car accident would get a maximum of $25,000, but only $50,000 is allowed per accident. What this means is, if there are three individuals hurt, and every one of them need $25,000, whoever submits a claim first gains first access to the $50,000 limit. When it comes to last number, it means that the total coverage per accident allotted for property damage is $25,000. Click here to discover more about auto insurance companies in USA.
In the event of a car accident, these state required limits usually could not sufficiently cover all of your liability and property damage needs. Therefore, even though purchasing a policy that satisfies your states minimum requirements is all that is needed to drive legally in your state or save yourself being penalized for not showing proof of financial responsibility in the event of a car accident, this is not always the best choice. This is because doing so would mean more out-of-the-pocket expenses for you, and the possibility of jail time or being sued if you cannot pay for your liabilities.
How much insurance should I buy?
Insurance agents may tell you that you should buy as much as you can pay for. While that may seem rational, it is not necessarily practical. For instance, you don't have to spend a lot of money on a personal injury protection policy if you already have a health insurance or disability insurance via your employer.