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Every state in the US requires drivers to carry some minimal amount of insurance coverage before they pull that car out of the driveway. For most people, these minimum numbers would leave you significantly under covered. When buying coverage there are a number of factors to keep in mind, most importantly, how much damage are you likely to cause, and how much do you have to lose. Its important to remember that your liability for an accident isn’t limited to your insurance coverage. If you destroy some guys 200,000 ferrari and put him through 100000 of reconstructive surgery, you are going to owe him 300k even if you only have 20,000 in coverage. Somehow that extra 280k is coming out of your pocket somewhere. So, if you have lots to lose, make sure you get plenty of coverage. Ask an agent to help you figure out a reasonable amount.

In the meantime, here are the minimal amounts you need in place not to end up in jail.

We always feel a little uncomfortable listing legal requirements on a webpage. What happens when this page gets archived, the laws change and someone finds it on a google search 10 years from now. Hate to be the source of bad data. So, keep in mind that the numbers here are from the insurance information institute and were accurate as of mid 2008.

(1) The first two numbers refer to bodily injury liability limits and the third number to property liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage.
(2) Low-cost policy limits for low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3.
(3) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state.
(4) In addition, policyholders must also carry at least $1,000 for medical payments.
(5) May be waived for the policyholder but is compulsory for passengers.
(6) Basic policy (optional) limits are 10/10/5. Uninsured and under insured motorist coverage not available under the basic policy but uninsured motorist coverage is required under the standard policy.
(7) In addition, policyholders must have 50/100 for wrongful death coverage.

*Minimum coverage requirements will increase to 30/60/30 on January 1, 2011.

Source: Property Casualty Insurers Association of America; state departments of insurance.

Categories: Buyers Guide, Consumer Tips
Tags: auto insurance liability coverage, coverage limits, insurance mandate, property damage, required coverage, state insurance laws