Almost every state has laws stating that people have auto insurance, but the actual regulations regarding auto insurance vary from state to state - so the type of coverage that you require depends on the state in which you live in.

Even if there are no laws, it is highly recommended that you have some form of cover; otherwise you may end up paying out huge amounts of money in the event of an accident, or even losing your home, in a worst-case scenario.


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Car Insurance – How Much Do I Require?

Once you have finally found a reputable auto insurer, you then have the difficult task of deciding how much coverage you actually require. This is something that you should consider carefully before signing up with a provider. These tips will give you some guidance when it comes to that tricky task.

State Requirements: Most states have minimum requirements that should be followed. These are usually in a form similar to 20/40/15. In this example, the 20 represents (in thousands of dollars) the minimum amount of insurance that you should have in the event of for bodily injury, the 40 represents the total amount of thousands of dollars per accident, and the 15 represents the total amount for property damage. Due to soaring medical and car repair costs, it is recommended that you buy coverage well above these minimums.

Driving Requirements: Consider how much and where you drive. If you regularly drive long journeys, you will have a statistically higher chance of being involved in an accident that someone who only drives to the shops in Providence County, RI once a week, so take this into account when choosing coverage. Also decide whether the value of your car makes it worthwhile taking out more comprehensive levels of coverage, such as collision insurance. An example of this is if you own a car that is only worth a few hundred dollars. This would mean it is not worthwhile paying a hefty sum every month for comprehensive cover, as you will only get a few hundred back in the event of serious damage to your vehicle. When you take off your deductible you may be left with virtually nothing.

Honesty is the Best Policy: No-one can determine what is round the corner, and if you are an inexperienced or poor driver, do not try and scrimp and save on car insurance. Remember that the insurance is just as much about covering you as it is about covering other people - so be honest with yourself when taking out a policy.

Affordability: On the other side of the coin, whilst you should make sure that you have the best amount of coverage that you can afford, do not go overboard and take out more than you will need, meaning that you are struggling to make the monthly payments. Consider your requirements carefully and choose the one that best meets your needs and your budget.

Car Insurance Q & A

Question: If someone borrows my car and crashes it, does my insurance apply, or does theirs?
Answer: Generally speaking, the liability follows the car, so your insurance would apply, as it is your car. The liability insurance of the driver often pays the additional amount if the costs payable are above your policy limits.

Question: If a child goes to college with mom or dad’s car, are they covered under the parents’ personal auto policy?
Answer: This can vary from company to company. Check with the insurance provider and make sure that the child is listed as an additional driver. Do this before the child goes to college, and it will avoid unnecessary disputes later on.

Question: Do I need ‘gap’ insurance?
Answer: If your vehicle is on finance, and its value is now less than the amount you owe, then yes you need gap insurance. If you owe less than its value, then no, you do not need gap insurance.