Why You Need Car Insurance
Every state except New Hampshire requires drivers to carry minimum auto insurance. Even in New Hampshire, you are financially responsible for any damage you cause. Driving without insurance can result in fines, license suspension, and personal financial liability.
Types of Coverage
Liability insurance covers damage you cause to other people and their property. This is required in almost every state. It has two parts: bodily injury liability and property damage liability.
Collision coverage pays for damage to your own vehicle in an accident, regardless of who is at fault. This is optional but often required by lenders if you have a car loan.
Comprehensive coverage pays for damage to your vehicle from non-collision events like theft, vandalism, weather, or hitting an animal. Also optional but often required by lenders.
Uninsured motorist coverage protects you if you are hit by a driver with no insurance. Required in some states.
Minimum Requirements
Each state sets its own minimum liability coverage amounts. Common minimums are expressed as three numbers, like 25/50/25, meaning 25,000 dollars per person for bodily injury, 50,000 dollars per accident for bodily injury, and 25,000 dollars for property damage. These are minimums, and many experts recommend higher coverage.
Tips for Affordable Insurance as a New Driver
New drivers typically pay higher premiums. You can reduce costs by taking a defensive driving course, maintaining good grades if you are a student, choosing a safe vehicle, increasing your deductible, and shopping around for quotes from multiple companies.
DMV Test Connection
While the DMV written test does not test specific insurance details, you must show proof of insurance to register a vehicle and to take the driving test in most states. Understanding basic insurance concepts is part of being a responsible driver.