Is requiring car insurance a state or federal law?

Driving in the U.S. can be a puzzle not only for drivers from foreign countries but also for drivers in the United States.

To obtain driving licenses from the state, contact the state Department of Motor Vehicles to determine the licensing requirements for the particular state.

The Department of Insurance for the state will have the minimum requirement for automobile insurance within the state.

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Foreign Nationals and Driving in the United States

If someone drives in the United States, he or she must have a valid driver’s license.

A visitor from outside the United States or Canada should check with the motor vehicle department of the state in which you will drive to determine drivers’ license requirements for that state.

Many states require an International Driving Permit (IDP) plus a valid license from your country. Obtain an IDP before you leave for your trip.

Other things you may find necessary are:

• Remember that the United States does not issue International Driving Permits so you must contact the authorities in your country of origin
• Renting a car can require both a driving license and an IDP. Ask about the company’s policies before renting
• Be cautious. There are international driver’s license frauds that can take advantage of unwary individuals

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Basic Insurance Coverage for Automobiles in the United States

Examine the state’s requirements for minimal automobile insurance.

You will find them stated as follows:

• Bodily injury liability – Your responsibility for injury to others in the event that you are involved with others in an accident and are responsible for the accident. This is usually stated as a split limit -example- $50,000 per person and $100,000 per accident.
• Property damage liability – your responsibility in case of an accident to pay for your liability for damage to the property of others.
• Underinsured/uninsured coverage – protect you if you are involved with someone without insurance. In 2012, it was estimated that an average of 12.6 percent of drivers had no insurance. This is one in every eight drivers.
• Medical payments coverage – purchased or have a provision for No-Fault insurance. These are designed to pay for injuries, death, and rehabilitation for you and your passengers in an auto accident.

Physical Damage to the Vehicle Itself

If you purchase an automobile, you may be constrained by the lender or car lease company to purchase insurance to repair the vehicle in an accident whether or not it is your responsibility.

This type of coverage is:

• Comprehensive coverage, which pays for damage to the vehicle from theft, fire, vandalism, animal damage, hail, windstorm, and glass damage
• Collision coverage, which pays for damage to the vehicle from collisions with other cars and running into objects

A deductible applies to each of these coverages. The amounts of the deductible can cause your premiums to fluctuate.

Saving Money on Car Insurance

There are several ways of saving on insurance premiums.

Some of these are:

• Obtain several quotes from insurance companies and comparison-shop
• Increase your deductible on collision and comprehensive. Consider not purchasing this coverage on older cars
• Look for discounts such as multiple policies with the same insurance company, your age – over 25, good grades for students, driving record, have anti-theft devices, or safety devices such as airbags or anti-lock braking systems

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Research Insurance Companies before Purchasing

Begin by researching the licensing, financial status, and claims history of the insurance companies you ask for quotes.

• Financial status of the insurance company found through NAIC or A.M. Best
• Claims records through your state’s insurance department
• Licensing of the insurance company and agent, you go through

Know and Understand the Quotes and Insurance Policy

Examine the quotes to be certain that they are adequate. Sometimes less expensive insurance can reflect savings in coverage. Read carefully, examine your policies, and do the appropriate research.

Sometimes less expensive insurance can reflect those savings in coverage. Read carefully, examine your policies, and do the appropriate research.

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