The answer to the question, “What auto insurance do I need to buy?” is a bit like asking, “How long is a piece of string?” In the case of auto insurance, it depends on where the driver lives and whether the car is fully paid for.
Each state determines whether car insurance is required and how much coverage drivers need to have in place to stay legal. Insurance companies must offer a prospective buyer a policy which meets the minimum standard; consumers can choose to buy one with a higher coverage limit if they wish, though.
In tort states, where the driver determined to be legally at fault in an accident is responsible for paying for damages he or she causes, third party liability coverage will likely be required. This type of protection includes bodily injury and property damage coverage. Bodily injury liability insurance coverage pay for medical expenses and lost wages incurred by the occupants of the other vehicle in an accident. It also pays for funeral expenses if the accident was a fatal one.
Property damage liability coverage pays for the cost of repairing or replacing the other driver’s vehicle following the accident. It also pays for repairs to public property, such as sign posts, light stands, guard rails, fences and sheds.
Drivers can also buy physical damage coverage to protect their own vehicle. Collision and comprehensive protection are put in place for this purpose.