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November 25, 2020

Is Full Coverage Car Insurance Required by Law?

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Car insurance requirements are dictated by state law as opposed to federal law, meaning your car insurance requirements may vary depending on where you live. In general, however, states don’t require drivers to carry full coverage car insurance.

Instead, most states require drivers to carry a minimum amount of liability insurance and cover coverages specific for that state. California drivers, for example, are required to carry at least:

  • $15,000 in bodily injury liability per person
  • $30,000 in bodily injury liability per accident
  • $5,000 in property damage liability
  • 15,000/$30,000 in uninsured motorist liability per person/per accident

This doesn’t mean that this is the only coverage available, however. You can purchase higher limits of liability insurance as well as additional coverages. In fact, additional coverage is often recommended.

Do I Need Full Coverage Car Insurance?

Although full coverage car insurance isn’t required by law, this doesn’t mean you don’t need it. Most dealerships will require you to carry full coverage auto insurance on a new vehicle after purchase. As long as you have a loan on your vehicle, you will likely have to carry some form of full coverage auto insurance.

Even without a requirement, full coverage car insurance is recommended. Liability on its own will only cover damages and injuries you cause to someone else. It will not cover damages to your vehicle or injuries you and your passengers may suffer.

What is Full Coverage Car Insurance?

Full coverage car insurance refers to the highest amount of coverage available for a single vehicle. These policies generally include:

  • Comprehensive Coverage: Comprehensive coverage provides compensation for damages to your vehicle caused by fire, wind, hail, lightning, smoke, theft, vandalism and more.
  • Collision Coverage: Collision coverage provides compensation for damages to your vehicle caused by a collision with another vehicle or object.
  • Liability: Liability insurance covers bodily injury and property damage you may cause to someone else. This insurance covers the victims’ medical bills and property damages as well as protecting you in case of a lawsuit related to the accident.
  • Medical Payments: Medical payments coverage covers medical bills you and your passengers may suffer after an accident, no matter who caused the accident.
  • Uninsured/Underinsured Motorist: This insurance covers damages and injuries that occur in an accident involving another driver who is not carrying insurance.

Every driver’s car insurance needs may be different, so be sure to speak with your insurance agent about insuring your vehicle.

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