Key Takeaways
- Each state has its own legal requirements for insurance so a personal vehicle can be registered.
- Liability insurance covers the costs towards another individual’s vehicle or injuries in the event that you cause an accident.
- Collision and Comprehensive insurance protect your vehicle from damages whether caused by an accident or another situation.
- Personal body insurance and uninsured motorist insurance protect you in the event you are harmed in an accident and need medical assistance or if the individual who caused the accident does not have insurance.
State Requirements
Each state has its own specific requirements for the amount of coverage you need to have as a minimum. In Ohio, our state minimum for bodily injury liability coverage is $25,000 per person injured in any accident and $50,000 for all individuals injured in an accident. The required minimum for property damage liability coverage is $25,000 for damage of or destruction of private property. This is on the lower end of insurance cost however, and if you are able we highly recommend getting higher levels of insurance and adding collision and comprehensive insurance to cover the vehicle you are going to purchase as well.
The state requirement is simply a minimum required for everyone to register their vehicle. Oftentimes most dealerships, when you purchase the vehicle through their credit system, require the buyer to get full coverage for the vehicle at a minimum so if there is an accident, their losses can be recouped. When you get a loan through a bank or a different crediting system, they may have different requirements for insurance levels for the vehicle as well. Beyond being required to get different levels of insurance, you may want to look into each type of insurance and why it might be important for you to get more coverage.
Liability Insurance
There are two main types of liability insurance. Bodily injury insurance, and property damage liability insurance are both going to be part of your insurance plan as they are required by the state. However, your state's minimum can be wildly insufficient at times. In the event you cause an accident and the bodily injury liability insurance you do have maxed out at $25,000 for an individual and they need $35,000 worth of medical bills, that extra $10,000 would have to come out of your pocket. The same for property damage, which covers damages done to the other vehicle in the accident. If the vehicle is a 1990 Toyota Corolla, the state minimum will be sufficient, but if you were to have an accident with a BMW, Porsche, or a Lexus from the most recent year, these vehicles may be worth more than the $25,000 state minimum. Since the state minimum might not be enough, it may be worth getting more coverage in your plan.
Collision and Comprehensive Insurance
These two insurance types can often be synonymous in your insurance policy as they often come bundled together. Collision insurance specifically protects your vehicle against damages in the event of an accident, while Comprehensive insurance protects you in the event that there is damage done to your vehicle that is not related to an accident. Generally if you get a newer and nicer vehicle, you want this amount to be the total worth of your vehicle.
Personal Injury Insurance and Uninsured Motorist Insurance
These two insurance coverages are specifically built into policies to protect you in the event of an accident. Personal injury insurance pays for your medical bills in the event that an accident results in bodily harm. Uninsured motorist insurance protects you in the event that another motorist in an accident does not have sufficient insurance or is uninsured and can help you cover what they should owe you in the event your vehicle is hit.