Jun 8, 2017

What are the laws regarding automobile insurance?
The laws vary by state, but most require basic liability coverage. States want to be sure that motorists have some financial backing in the event of a collision or any insurance-related incident. Most states require insurance to operate a vehicle in any circumstance, but there are a few exceptions:

Tennessee and Wisconsin do not require liability but legally expect drivers to prove adequate “financial responsibility” in the event of a collision. (Source: TN, WI DMV websites)

New Hampshire initially requires no insurance but does temporarily after a collision. (Source: NH DMV website)

Virginia is a rare exception, allowing a driver to pay a $500 Uninsured Motor Vehicle fee to legally operate without insurance at his/her own risk. However, the fee expires with the registration and must be renewed. Drivers in Virginia opting for insurance must meet the state’s minimum coverage. (Source: VA DMV website; //www.dmv.virginia.gov/webdoc/citizen/vehicles/insurance.asp)

How is one protected from uninsured drivers?
By purchasing uninsured/underinsured motorist coverage. UM/UIM pays for medical bills if you and any occupants are hit by an uninsured motorist or one without enough insurance. Many states require this coverage by law.

How is a vehicle protected from uninsured drivers?
Uninsured/underinsured motorist property damage coverage pays for damage to your vehicle if hit by a driver without any or enough insurance. Some states offer this coverage in place of collision coverage.

Is coverage transferable from state-to-state in the short term?
Is coverage transferable from state-to-state in the short term? Yes, if you have an insurance policy you’re covered throughout the United States. Moving to a different state temporarily may require changing coverage, depending on the amount of time a state allows residency with out-of-state insurance.

What about long-term?
Moving for the long-term definitely requires switching insurance, although the time to do so can be somewhat variable. For example, a state may technically require changing after 90 days, but if you have two full months left on your current policy it would seem silly to switch prematurely. However, the “grey” period in between could prove problematic in the event of an incident.

What is an SR-22?
What is an SR-22? An SR-22 is a form that proves a driver has insurance or is financially responsible. High-risk drivers are often required to carry these forms for periods of 3 to 5 years, depending on their offenses.

What is liability insurance?
Liability covers bodily injury (including death) and property damage to others if you are determined responsible for an accident, even if you are not driving. Owning the vehicle and lending it to someone else constitutes responsibility. Liability coverage also pays for legal fees if you are sued as a result of an accident.

How does one decipher the numbers associated with liability?
Insurers will often represent liability coverage with three consecutive numbers; for example, 50/100/25. The first number stands for maximum amount payable for an individual bodily injury in an accident, in this case $50,000. The second number represents the available coverage for all injuries in an accident, or $100,000. Finally, the last number denotes maximum property damage liability for one accident, $25,000.

What are the minimum requirements?
Amounts of required coverage vary among states. Along the spectrum of minimum coverage, a low figure is 15/30/5 (California, New Jersey) while a high set is 50/100/25 (Alaska, Maine).

What is comprehensive insurance?
Comprehensive coverage pays for damage to your vehicle that is not caused by an accident with or without another vehicle. Natural events – fire, wind and flood – are included, in addition to theft and vandalism. Damaging encounters with animals are included as well. If a vehicle is stolen, comprehensive will reimburse you for any related expenses or losses. Some comp plans pay for the replacement of broken glass, often known as full-glass coverage.

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