In 47 of the 50 United States, it is illegal to take a car onto the road without auto insurance. Compulsory insurance laws protect the public from the expenses of injuries and property damage resulting from a car accident. The states that require auto insurance set minimum amounts of coverage that guarantee that medical costs and property damage caused by the insured in case an accident is judged to be the fault of the insured. Another name for compulsory insurance is liability insurance.
If you carry compulsory insurance and are judged to be at fault in an auto accident, your car insurance company will pay the medical bills and lost work time and other damages for the other driver and passengers in both his car and yours that are not immediate blood relatives. The minimum compulsory insurance varies from state to state, but your insurance agent will be able to tell you what minimum amount you must carry in order to drive you car on the public roads.
Besides personal injury insurance, you are also required in most states to carry property damage policies to repair or replace any damage caused by your car. Again, the amount varies from one state to another.
There are good reasons for carrying more than the minimum amount of compulsory insurance. If the damages exceed your coverage, for instance, you'll be liable for anything that your insurance company doesn't pay. More importantly, there are many gaps in compulsory insurance company.
1. You aren't covered for theft or a fire that's not related to an auto accident.
2. You won't recover the entire amount of the cost to repair damage to your car caused by an uninsured vehicle.
3. If you were judged to be at fault in the auto accident, there is no coverage for your injuries or damages.
4. Even if you're not at fault, there's no coverage for other expenses related to your auto accident like towing.
Most insurance agents recommend that you carry a greater amount of insurance and coverage other than what's strictly required by your state. Often referred to as 'comprehensive' coverage, it will include:
Personal Injury Protection, which will pay medical expenses and reasonable work and living expenses for lost job time due to an accident, no matter who was at fault.
Travel, towing and glass replacement that results from causes other than an auto accident.
Usually, if you take out a loan to purchase your car, the bank will require that you purchase and maintain comprehensive insurance on your vehicle until your loan is paid off.
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