Tag Archives: PIP

Auto Insurance Requirements by State

When you are out driving your car on the busy roads of your state, you are a risk to every other driver out there. No matter how well you drive, how careful you are behind the wheel, or how often you obey traffic laws, you are a risk. Because of this, almost every state in the U.S. requires drivers to have some sort of auto insurance coverage. Not only does this help protect you, but it helps protect other drivers. The most often required coverages include:

Bodily damage liability: If you hurt someone by causing an accident, then your insurance will cover the cost of their injuries if you have bodily injury liability. There are two types of coverage you will be required to have, one is for a single person injury and the other is for multiple person injuries.

Property damage liability: If you run over someone’s mailbox, drive into their home or crash into their car, you are causing property damage. Property damage liability coverage will pay for this damage.

Uninsured motorist coverage: What happens if you get into an accident with another driver (who is at fault) and they don’t have any insurance or they have too little? If you have uninsured motorist coverage then your insurance policy will pay for the damages caused by the other driver.

Personal injury protection: If you or one of your passengers is hurt in an accident, personal injury protection (also called PIP) will pay for the medical expenses.

Every state is different. Almost all require bodily injury and property damage liability. Few require personal injury protection as well, and some also require uninsured motorist coverage. While most states require a very low minimum amount of insurance coverage in each of these areas, some have recently reset their minimums to much higher amounts.

Remember, before you get your auto insurance quotes, find out what kind of coverage is required by your state. But also, don’t just get the deductibles and limits required-consider the potential actual cost of damages after an accident and get an amount that will cover those expenses. Because the state required amounts don’t guarantee that they will be enough-they simply guarantee that there will be some sort of coverage.

State laws for auto insurance

Auto insurance is governed by the state laws. The state laws have mandated certain auto coverage to ensure safety of the community. Hence, if you want to continue with the privilege of driving in your hometown, you should learn the state auto insurance laws by heart.

The auto insurance laws of America vary widely, but still can be categorized as the following,

The tort state:

Tort defines the injuries that are eligible to receive compensation under the law. In a tort state, one party is identified as the responsible party for the accident and is liable to compensate the sufferers for their losses.

A tort state can further be categorized as full tort and limited tort. In the limited tort state, the recipient cant claim compensation for the pains and sufferings from the party responsible for the damages, until and unless he suffers permanent disability.

The no-fault state:

The no-fault state requires the drivers to carry insurances for their own protection, since it imposes restrictions upon the ability to sue the responsible driver.

Under the pure no-fault law the drivers are covered under their own plans respectively and will receive coverage irrespective of their responsibility for the damages.

However, no state follows the pure no-fault status, and thus leaves the opportunity for the involved parties to sue the other to recover a portion of their damages.

The add-on no-fault state: The add-on no fault state allows the victim to collect the benefits under the responsible partys bodily injury liability coverage, once his medical expenses exceeds the PIP coverage limit.

The doctrine of comparative negligence Some states follow the theory of comparative negligence, where the responsibility of an accident gets distributed amongst the parties involved in it. This doctrine restricts one party to hold the other party fully responsible for the damages caused to him.

In the states following the doctrine of comparative negligence, the party contributing more than 50% towards the damages caused in the accident, is the party at-fault.

The issue of liability

All the states require the drivers to carry at least the minimum liability coverage and that is to ensure the safety of the community around the driver. The state law makes sure that the driver has adequate coverage to compensate for the damages caused by him to others.