Automobile insurance minimum standard coverage is the basic amount of insurance coverage required by local or state law for a person licensed to drive to drive an automobile within that region or territory. Simply explained, it is the mandatory amount of auto insurance coverage a driver must carry. MFD Is your #1 service provider!
Liability coverage is viewed as the most important portion of a person’s auto insurance policy by most states. This coverage protects a driver of an automobile from incurring cost as a result of damages and injury caused if the driver causes an accident and is found at fault. Suppose you are driving along one evening and accidentally crash into another car. Liability coverage in your automobile insurance policy will compensate the owner of the car you crashed into for the damage to their vehicle caused by the accident.
Automobile insurance companies go farther by actually breaking down the liability coverage portion of your policy into two subsections. The first subsection is defined as bodily injury liability. Bodily injury liability insures against personal injury as a result of an accident where you are a fault in order to compensate the other drivers for injuries and resulting medical expenses due to the car accident. The second subsection of liability coverage insures against property damage. This portion of the automobile insurance policy protects you from monetary liability from damage caused by you to another person’s car.
Automobile insurance coverage can vary, but 100/300/100 is usually considered to be a good base automobile insurance coverage. This terminology is further explained as the automobile insurance company will pay up to $100,000 for bodily injury for the driver of the other vehicle, up to $300,000 towards bodily injury sustained by all persons involved in the accident and up to $100,000 for property damage as a result of the accident. Rising medical costs and higher car prices make it necessary for this type of coverage to be considered the absolute minimum standard insurance requirement. However, each state has different laws and standards and it is up to the individual to ascertain exactly what the minimum acceptable levels of auto insurance are for their location.
Avoid retaining only the minimum coverage required by your state standard in order to save a few dollars. Opt of r a higher deductible in these types of situations. Just make sure you are capable of paying the higher deductible in the event an accident does occur. In most cases, you will find that by increasing your deductible by as little as five hundred dollars substantially lowers the annual prices of your automobile insurance premium.
Uninsured motorist insurance protects you from people that illegally drive without insurance and underinsured motorist coverage pays for the cost of personal injuries that exceed the other driver’s insurance coverage. PIP coverage is not required in every state and you will need to find out whether or not your state requires these other forms of automobile insurance coverage as a component of the automobile insurance minimum coverage standard.