Most states mandate drivers demonstrate financial responsibility for accidents by purchasing car insurance; others allow drivers to fulfill this requirement through other methods, such as paying a bond or making cash deposits.
New York requires that all drivers carry both Liability coverage and Personal Injury Protection (PIP). You can also opt for uninsured/underinsured motorist coverage to compensate you in case an at-fault driver does not carry enough insurance to cover injuries in an accident with you.
Minimum Requirements
Virtually every state mandates drivers carry auto insurance coverage of some kind to operate legally on the road. While each state varies in its minimum requirements, most policies cover liability, uninsured/underinsured motorist coverage and personal injury protection (PIP).
Liability insurance protects other drivers in an accident you cause by covering injuries and property damage suffered by them, typically between $25,000 to $50,000 per person. Most states also mandate uninsured/underinsured motorist coverage (UM/UIM), which helps cover medical bills or losses in cases when an at-fault driver does not carry enough coverage to compensate you.
Insurance professionals typically recommend purchasing higher policy limits than required by law for additional financial protection, and many lenders require you to carry collision and comprehensive coverage if you lease or finance your vehicle. Collision and comprehensive policies cover damages caused by natural disasters, fire, theft, vandalism or animal collisions (like deer running into your path).
New York is the only no-fault state, mandating Personal Injury Protection coverage to cover medical expenses regardless of who caused an accident. New York also requires bodily injury and property damage liability coverage of at least $25,000.
Even in states without mandatory auto insurance requirements, drivers are still expected to demonstrate proof that they can pay for injuries and damage they cause by having liability coverage or meeting other financial responsibility measures such as posting a bond.
If you cannot afford car insurance, penalties may include fines and fees as well as license or registration suspension and even jail time for repeat offenses. Most drivers opt to secure at least the minimum auto coverage required by their state to avoid these penalties; however there may be ways around them such as placing down a deposit, providing cashier’s checks, proof of assets or self-insurance certificates to satisfy financial responsibility laws without buying an auto policy policy.
Optional Coverages
State minimum car insurance policies serve as the cornerstone for most car policies; however, most drivers add optional coverages like comprehensive and collision to meet their needs as drivers, along with rental vehicle coverage and roadside assistance. Additional types of coverage that go beyond what’s legally mandated may also be purchased such as uninsured/under insured motorist coverage or medical payments coverage.
Collision and comprehensive coverages are both optional forms of coverage that offer financial compensation for damage to both vehicles and property, minus any deductible set forth by your insurance provider. They typically cover damages sustained from collision with another vehicle or object as well as fire, theft, vandalism acts of nature glass breakage damage as well as being required by lenders – especially if the car is relatively new – while some lenders require it as part of loan or lease agreements requiring comprehensive and collision policies for newer cars.
Personal injury protection (PIP) coverage will typically cover any injuries you sustain in an accident regardless of fault, while property damage liability insurance would cover such costs in no-fault states; should someone borrow your car and crash it without coverage or be uninsured/under insured they would file an UM/UIM claim through your own coverage policy.
If the individual who borrowed your car does not carry auto insurance or only minimal coverage, he or she can still recover some of the cost to repair your vehicle through your UM/UIM policy, which typically provides minimum limits similar to your state liability policy.
Medical payments coverage covers your and your passengers’ medical bills regardless of fault in an accident, while many insurers provide this as standard optional coverage or some states mandate it. Gap insurance covers the difference between what you owe on a loan/lease agreement and its market value should your vehicle become totaled or stolen; typically this coverage only comes standard on newer models or may be included as part of monthly lease payments.
Bodily Injury Protection
Your car insurance’s bodily injury liability section covers damages you cause to other people should an accident happen under your watch, such as medical costs and lost income related to injuries they sustain; funeral costs if needed; policy limits determine how much will be covered per person or per accident.
Most states mandate minimum bodily injury coverage limits; however, it’s wise to carefully consider your needs when setting those limits. A Plymouth Rock agent can assist in helping you choose an amount appropriate to both your unique situation and vehicle value.
Personal Injury Protection (PIP), among other add-ons, may provide coverage to cover medical costs in case of an accident regardless of who caused it. By purchasing PIP coverage options or other additional coverage options you could save yourself from financial hardship in case an incident happens and who caused it.
Nearly all auto policies include both property damage and bodily injury liability coverages; for a comprehensive policy that will meet most of your auto insurance needs, consider including these forms of coverage in addition to property and bodily damage liability protections.
Bodily injury liability and property damage coverage are the two core types of car insurance required in most states by law, with limits varying by state but usually between $25,000 to $50,000 for bodily injury liability and $10k to $100k for property damage coverage respectively.
No one wants to think about the possible results of an accident, but being prepared is crucial. An auto insurance policy with sufficient limits can help cover unexpected expenses quickly and help get your life back on track after an incident occurs.
Experts advise all drivers to obtain at least the minimum limits and liability coverage, in order to protect their assets and avoid bankruptcy should an accident occur. While it may be tempting for some drivers to forgo auto insurance altogether or reduce coverage levels, most experts advise all motorists maintain required minimum limits as this will help mitigate potential financial burdens due to an accident, including the possible loss of assets or bankruptcy of all involved.
Property Damage Coverage
Property Damage Liability, more commonly referred to as PD, covers the costs associated with repairing or replacing other people’s property that you damage in an accident. In most states this covers their car; however it could extend further, covering fences, light posts, buildings and even your own vehicle depending on your policy’s limits. While minimum coverage requirements exist under law, you should consider your assets and desired risk profile when deciding how much coverage to get. A local Shelter agent can assist in this regard.
Though every state mandates minimum amounts of insurance for drivers, it is often beneficial to purchase more than the minimum limit as the latter will likely not cover all property damage caused by accidents you cause. Drivers with high net worth should especially take steps to safeguard their assets by increasing the minimum coverage limit.
As part of your overall coverage strategy, collision and comprehensive policies should also be added if possible. These optional coverages cover repairs to or replacement of your own vehicle in an accident, less any deductible you choose. Although not required by most states, if you still owe or lease on your vehicle it will likely require that these optional policies are carried.
Some states also offer no-fault coverage options that provide compensation for medical bills, lost wages and other expenses in an accident regardless of who was at fault. Although New York doesn’t currently provide such an option, if possible it would be worthwhile adding this coverage if affordable. Contact your local Shelter agent to gain more insight into no-fault policies compared with traditional liability auto policies; and discuss how they differ and meet coverage requirements specific to your state.
