What Are the Requirements For Auto Insurance?

All states highly recommend that all car drivers obtain auto insurance. But what are the minimum coverages and amounts of insurance that must be purchased to satisfy the financial responsibility requirements needed to register your car and obtain license plates?

The first requirement for your car insurance is the coverages. The first coverage is called the No-Fault or Personal Injury Protection. This coverage will pay medical expenses and lost earnings for a driver or passenger injured or a pedestrian injured by your car. The purpose of No-Fault insurance is to help victims recover from the injuries sustained in auto accidents.

The second is the liability requirement which is to protect against the harm your car might do to other people and their property. In addition, your auto insurance company must provide you with a legal defense against such claims, without reducing your policy's liability limits.

The third is the uninsured motorist coverage which is to protect against the injuries you, family members and passengers might suffer in an accident with an uninsured car driver. If anyone in your car is injured by the driver of an uninsured vehicle or a hit-and-run motorist, a claim should be filed with your auto insurance company under this coverage.

Another requirement for auto insurance which is essential when you are choosing affordable car insurance is the insurance information and enforcement system. It will detect uninsured vehicles. Your insurance company will report information such as cancellations renewals, and issuance of new policies, on all persons they insure for motor vehicle insurance. As a driver you must see to it that you maintain liability coverage for your car at all times to prevent suspension of your vehicle registration.

You will soon receive letters from the Department of Motor Vehicles questioning about your status. You should know that your car will be continually tracked for its insurance coverage. If your auto insurance company has the insurance information and enforcement system, then you will be sure enough that your car is really insured.

The third requirement is that your car insurance company must provide all car insurance coverage required by law. This would make you comfortable that even using your credit can be a tool on obtaining coverages for your car.

Many credit card companies provide some type of "collision damage coverage" to their cardholders for vehicles they rent with that card. This is separate from any other coverage and usually covers losses only in excess of amounts collectible under other existing coverages. You may wish to check with your credit card company to verify exactly what protection it provides and what types of vehicles are covered.

Knowing the requirements of auto insurance can help you as a customer to decide on how you would choose the best car insurance for you. You can also be guided if you are planning to take low car insurance but having all the necessary requirements. You need not to worry about the efficacy of your car insurance if you really did your research well.