What are the legal requirements for auto insurance coverage?


Auto insurance is not only a very useful thing to have; it is the law in most states in our country. Though the intricacies of the law might differ, the basic insurance coverage must and should be owned by all car owners.

So we shall now try and explore the different legal requirements in a few states to get an idea of what we are talking about.

Most states have a no fault clause. The no fault clause states that your insurance company must and should pay you reimbursements for damages which you are entitled to no matter what sort of policy you have. It also does not matter whether you were at fault or not. We must first try to understand what no fault means. Hence we will have a look at the two main different types of policies.

The comprehensive or first party insurance coverage makes sure that you will get reimbursed no matter which party involved in the accident is at fault. You will also get paid for damages incurred through mishaps with inanimate objects like trees or poles. And you are also covered against fire and theft losses.

The third party limited insurance covers you for only those instances when you are at fault. Hence there is a lot of problem in actually going and getting the money from the other party’s insurance company. In order to avoid these legal hassles, the government made sure that every individual’s insurance company would take care of its own. And if you really feel that the other party was extremely negligent or even deliberate in his or her actions, you can still take the case to court.

The no fault law is a very useful clause. It allows you to take the case to court if you really feel the need else you can get your money back. Michigan is one of the only states which get close to not allowing you to litigate at all under any case.

Then there are minimum requirements for coverage. For example Illinois has a requirement of 15000$ for personal injuries, 30000$ for injuries sustained through the accident as a whole and lastly 5000$ for property damage incurred through the accident. Any coverage over that is for your own personal benefit. Most of the other states have more or less similar legal requirements with regard to the minimum coverage required per automobile.