State Minimum Car Insurance Requirements

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Key takeaways...
  • All states have minimum car insurance requirements requiring vehicle owners or drivers, depending on the state, to carry a minimum amount of car insurance coverage
  • Car insurance companies and states work together to help make sure most minor accidents fall within minimum car insurance requirements
  • If you lease a car most leasing companies require 100/300/100 coverage

All states have minimum car insurance requirements requiring vehicle owners (or drivers depending on the state) to carry a minimum amount of car insurance coverage.

The amounts of auto insurance coverage will vary by state but most of the time they are only enough to cover your losses in the case of a minor car accident.

However, should you be involved in a serious car accident these state minimum car insurance requirements may not be enough and you will quickly learn how well the car insurance industry lobbies local governments to keep car insurance minimums low enough to prevent any type of large financial payouts.

For example, in the state of California, all drivers are required by law to have car insurance coverage with a minimum coverage of 15/30/15.

This is why you need to understand terms of your car insurance policy! Use our FREE quote tool to find auto insurance rates today.

What do the numbers 15/30/15 represent?

https://www.youtube.com/watch?v=qq4gjxq0v8o

These numbers represent the minimum amounts of car insurance coverage needed grouping by the common order of auto insurance policy elements.

If you live in California you must have a car insurance policy which has at least the following amount of coverage:

  • $15,000 of coverage for accidents involving injuries or death of one person
  • $30,000 of coverage for accidents involving death or injuries of multiple people
  • $15,000 of coverage for accidents involving property damage due to an accident by your fault

If you ask your financial advisor about how much protection these car insurance limits provided in the case of an accident many will say not very much.

Car insurance companies and states work together to help make sure most minor accidents fall within minimum car insurance requirements however you should never buy insurance just for a minor car accident but have the coverage needed to provide adequate financial protection in the case of almost any accident.

Most state minimum car insurance requirements are far lower than any responsible driver should have.

Just because the government has set a minimum does not mean you should only buy the minimum.

This is the same government who is constantly scrutinized for its lack of regulation, provides regular bailouts to the banks, can not agree on extending unemployment benefits in one of the worst recent economic times we can remember and hardly manages to pass a bill without conceding some tax benefit to a donor.

So take auto insurance coverage in your own hands.

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No-Fault Car Insurance

Although many states have no-fault car insurance laws which provide drivers semi-protection from nuisance lawsuits stemming from minor accidents these flaws do not prevent litigation in the event of negligence.

How quick is a lawyer ready to claim negligence on your behalf in this litigious nation we live in? Our guess is pretty quick.

So if you have the bare state minimum car insurance coverage in California you are covered for $30,000 maximum. A couple nights in an ER can surpass $30,000 quickly.

  • What about rehab?
  • What if you have to spend a week in hospital?
  • What if you need surgery?

$30,000 is more or less a tip on the amount of the real bills you could accumulate.

The Irony of Leasing a Car

Ironically, however, if you lease a car, most leasing companies require 100/300/100 coverage.

This means your leasing company is smart enough to cover their liability by getting much more coverage than the state minimum since they understand the possible expenses associated with serious accidents.

When leasing a car the title of the vehicle stays in the leasing company name unlike when you purchase a car and simply have the auto loan company as a lien holder.

So the leasing company requires:

  • $100,000 of coverage for accidents involving injuries or death of one (1) person
  • $300,000 of coverage for accidents involving death or injuries of multiple people
  • $100,000 of coverage for accidents involving property damage due to an accident by your fault

But the government requires roughly only 10 percent of the same coverage?

Who is smarter here?

The government or the leasing company? You do the math but minimum car insurance requirements are simply not enough.

Every driver should always consider expanded auto insurance coverage far beyond state minimum requirements.

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