In the United States, auto owners insurance comprises of several types of coverages. Some of the coverages are mandatory in all the states in the country, while the other types of coverages are optional. Most of the states had made the liability coverage as compulsory but the minimum policy cover amount varies from state to state. The liability insurance provides cover for the persons included in the policy for bodily injuries to the insured persons and third parties involved in the accident, along with damages to property.
In general, the minimum limit for liability insurance in most states is $25,000 for bodily injuries to each person injured in the accident, a total limit of $50,000 for every accident, and property damage liability limit of $10,000. These limits are mentioned as 25/50/10 in the auto owner’s insurance industry. However, these limits are different in each state of America, with limits of 25/50/5, 25/50/25, 50/100/25, etc. It is illegal to drive a vehicle within the country without having this liability insurance cover for bodily injuries.
Apart from this liability insurance, certain states had made comprehensive coverage, collision coverage, and uninsured/underinsured motorist coverage also as compulsory. In Florida, the auto owners insurance should also include a personal life insurance for a minimum of $10,000 for each person driving within that state. Even though numerous types of auto insurance covers exist, the most important coverages among them are bodily insurance liability, comprehensive, collision, uninsured/underinsured motorists, personal injury protection, medical payments, work loss, and accident death coverages.
Collision insurance cover protects you in paying the amount required to repair expenses after the accident. If the damage to the car is more than 70% of the cost of the vehicle, the insurance company would declare the auto as totaled and you could claim the amount required for a replacement of your car. Comprehensive insurance is useful for auto owners insurance against ‘Acts of God’ that include damages to the car due to flood, fire, tsunami, vandalism, cyclone, hailstorm, falling objects, civic commotion, and theft of the automobile. Most vehicles purchased under finance schemes should compulsorily have liability insurance, collision cover, and comprehensive cover. Other coverages are optional and the auto owners insurance for such risks should be decided by the auto owners based on their perceived risks in driving. These extra coverages and the minimum amounts for each type of coverage would depend on the make and model of the car, the traffic and road conditions of the area of frequent driving, the age and expertise of the driver, and the income level of the person obtaining the auto owners insurance.
