Auto Insurance

2007-06-09T08:29:00.000-07:00

If you own a car, auto insurance is not just an option—it is a legal necessity. And you wouldn't want it any other way. If you are involved in an accident or have your car stolen, owning the right kind of auto insurance can help to ease a difficult situation. The information below will provide some answers and help you ask the right questions in order to find the most appropriate solutions.

What is auto insurance?

	Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage: Property coverage pays for damage to or theft of your car. Liability coverage pays for your legal responsibility to others for bodily injury or property damage. Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses. An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements. Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

What is covered by a basic auto policy?

	Your auto policy may include six coverages. Each coverage is priced separately.

	1. Bodily Injury Liability This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission. It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.

	2. Medical Payments or Personal Injury Protection (PIP) This coverage pays for the treatment of injuries to the driver and passengers of the policyholder's car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

	3. Property Damage Liability This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

	4. Collision This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you're not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you'll also be reimbursed for the deductible.

	5. Comprehensive This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer. Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium. Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible. States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

	6. Uninsured and Underinsured Motorist Coverage This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.

Can I drive legally without insurance?

NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. But insurance exists to protect your assets. Trying to see how little you can get by with can be very shortsighted and dangerous.

If you've financed your car, your lender may require comprehensive and collision insurance as part of the loan agreement.

Below is an example of the state minimum limits for auto liability insurance. The first number refers to liability limits for bodily injury for any one person, the second to limits for all persons injured, and the third refers to property damage liability limits. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual and $10,000 coverage for property damage.

			Proof of insurance required (1)
State	Insurance required (2)	Minimum liability limits (3)	At registration	At time of accident	At all times in vehicle	Insurer verification of insurance (4)	Penalties for noncompliance (first offense)
AL	BI & PD Liab	20/40/10	Yes	Yes	Yes	c	$500 fine, license suspension (6)
AK	BI & PD Liab	50/100/25	No	No (5)	Yes	b	license suspension/revocation (6)
AZ	BI & PD Liab	15/30/10	No (7)	Yes	Yes	a,b,d	$250 fine, license suspension
AR	BI & PD Liab, PIP	25/50/25	Yes	No	No	b,d	$50-$250 fine
CA	BI & PD Liab	15/30/5 (8)	Yes	Yes	Yes	a,b,d	$100-$200 fine
CO	BI & PD Liab	25/50/15	Yes	Yes	Yes	a,d	$500 fine
CT	BI & PD Liab, UM, UIM	20/40/10	Yes	Yes	Yes	a	registration suspension
DE	BI & PD Liab, PIP	15/30/10	No	Yes	Yes	b,c,d	$1,500-$2,000 fine; six-month license suspension
DC	BI & PD Liab, UM	25/50/10	Yes	Yes	Yes	a,c	$300-$500 fine or maximum 30 days jail
FL	PD Liab, PIP	10/20/10 (9)	Yes	Yes	Yes	a,d	license/registration revocation (6)
GA	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,d	$200-$1,000 fine, maximum 12 months jail (6)
HI	BI & PD Liab, PIP	20/40/10	No	Yes	Yes	a	$500 fine
ID	BI & PD Liab	25/50/15	No	Yes	Yes	none	$75 fine
IL	BI & PD Liab, UM	20/40/15	Yes	Yes	Yes	b,c	$500-$1,000 fine
IN	BI & PD Liab	25/50/10	Yes	Yes	No	a	1-year license and/or registration suspension
IA	BI & PD Liab	20/40/15	No	Yes	Yes	a	removal of license plates/registration receipt, possible impoundment
KS	BI & PD Liab, PIP, UM	25/50/10	Yes	No	No	a	$300-$1,000 fine, maximum 6 months jail
KY	BI & PD Liab, PIP	25/50/10	Yes	Yes	Yes	a,d	$500-$1,000 fine and/or up to 90 days in jail
LA	BI & PD Liab	10/20/10	Yes	No (5)	Yes	a,d	$50 reinstatement fee, confiscation of plates
ME	BI & PD Liab, UM, UIM	50/100/25 (10)	No	Yes	Yes	a,b	$100-$500 fine, 30-day license and registration suspension (6)
MD	BI & PD Liab, PIP (11), UM	20/40/15	Yes	No	No	a	up to $1,000 fine and/or 1-year jail (6)
MA	BI & PD Liab, PIP, UM	20/40/5	Yes	No	No	a,d	$500-$5,000 fine or maximum 1-year jail (6)
MI	BI & PD Liab, PIP	20/40/10	Yes	No	No	a	$200-$500 fine or maximum 1-year jail (6)
MN	BI & PD Liab, PIP, UM, UIM	30/60/10	No	Yes	Yes	c	$200-$1,000 fine, maximum 90-days jail (6)
MS	BI & PD Liab	25/50/25	No	Yes	Yes	a	$500 fine, license suspension
MO	BI & PD Liab, UM	25/50/10	Yes	Yes	Yes	a,d	license and registration revocation, $20 reinstatement fee (6)
MT	BI & PD Liab	25/50/10	No	Yes	Yes	a	$250-$500 fine or not more than 10 days in jail
NE	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,b	$500 fine (6), license and registration suspension
NV	BI & PD Liab	15/30/10	No	Yes	Yes	a,d	up to $1,000 fine (6)
NH	FR only, UM	25/50/25	No	No (5)	No	None	none
NJ	BI & PD Liab, PIP, UM	15/30/5 (12)	No	Yes	Yes	a,d	$300-$1,000 fine, community service, 1-year license suspension
NM	BI & PD Liab	25/50/10	Yes	No	No	a,c,d	up to $300 fine, registration suspension (6)
NY	BI & PD Liab, PIP, UM	25/50/10 (13)	Yes	Yes	Yes	a,d	$150-$1,500 fine, maximum 15-days jail
NC	BI & PD Liab	30/60/25	No	No	No	a,d	$50 fine, 30-day registration suspension (6)
ND	BI & PD Liab, PIP, UM	25/50/25	No	No (5)	No	c	$150 fine, registration revocation, license suspension
OH	BI & PD Liab	12.5/25/7.5	No	Yes	Yes	a,c	90-day license suspension, $75 reinstatement fee
OK	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,d*	$250 fine, no more than 30 days jail, license and registration suspension (6)
OR	BI & PD Liab, PIP, UM	25/50/10	No	Yes	Yes	a,c	license suspension and/or revocation (6)
PA	BI & PD Liab, PIP	15/30/5	No	Yes	Yes	a	$300 fine, license and registration suspension (6)
RI	BI & PD Liab, UM	25/50/25 (9)	No	No	No	c	$100-$500 fine, up to 3 months license/registration suspension
SC	BI & PD Liab, UM	25/50/25	Yes	Yes	Yes	a,d	$100-$200 fine, less than 30 days jail
SD	BI & PD Liab, UM	25/50/25	No	Yes	Yes	a	up to 1-year license suspension (6)
TN	BI & PD Liab	25/50/10 (9)	No	No	Yes	a	up to $100 fine
TX	BI & PD Liab	20/40/15	Yes	Yes	No	a,b**	$175-$350 fine
UT	BI & PD Liab, PIP	25/50/15 (9)	No	Yes	Yes	d	$400 fine
VT	BI & PD Liab, UM, UIM	25/50/10	No	Yes	Yes	c	less than $100 fine, license suspension (6)
VA	BI & PD Liab, UM	25/50/20	No	No	No	a,b,c,d	none
WA	BI & PD Liab	25/50/10	No	No	No	a	$250 fine, community restitution (6)
WV	BI & PD Liab, UM	20/40/10	Yes	Yes	Yes	a	30-day license suspension, registration revocation, $200-$5,000 fine
WI	FR only, UM	25/50/10	No	No	No	a	license and or registration revocation (6)
WY	BI & PD Liab	25/50/20	Yes	Yes	Yes	c,d*	up to $750 fine; up to six months in jail
(1) Proof of valid insurance. The form of evidence varies by state and may take the form of an insurance policy, binder, certificate of self-insurance, surety bonds, or certificate of deposit. Many states require insurance identification cards issued by the insurer. Self-certification, where the driver is required to identify the insurer and policy number in writing rather than in person, is not included. "Yes" in "At all times" columns includes states where drivers must produce proof on demand. (2) Compulsory Coverages: BI Liab=Bodily injury liability PD Liab=Property damage liability UM=Uninsured motorist PD=Physical damage Med=First party (policyholder) medical expenses UIM=Underinsured motorist PIP=Personal Injury Protection. Mandatory in no-fault states. Includes medical, rehabilitation, loss of earnings and funeral expenses. In some states PIP includes essential services such as child care. FR=Financial responsibility only. Insurance not compulsory. (3) The first two numbers refer to bodily injury liability limits and the third number to property liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage. (4) a. Insurer must notify Department of Motor Vehicles or other state agency of cancellation or nonrenewal. b. Insurer must verify financial responsibility or insurance after an accident or arrest. c. Insurer must verify randomly selected insurance policies upon request. d. Insurers must submit entire list of insurance in effect, which may be compared with registrations at a state agency. Also known as a computer data law. Also includes cases where insurers are required to report new issues and/or renewals. (5) Insured must provide evidence of insurance at some point after the accident to the Department of Insurance, other state agency, or law enforcement officer. Deadlines vary among the states. (6) Penalties are provided for in the law but may not be mandatory for first offenses. (7) Proof of insurance must be presented within 30 days of registration. (8) Low-cost policy limits for low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3. (9) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state. (10) In addition, policyholders must also carry at least $1,000 for medical payments. (11) May be waived for the policyholder but is compulsory for passengers. (12) Basic policy (optional) limits are 10/10/5. Uninsured and underinsured motorist coverge not available under the basic policy but uninsured motorist coverage is required under the standard policy. (13) In addition, policyholders must have 50/100 for wrongful death coverage. The system must be operational by July 1, 2008. *SB 1670, effective September 1, 2005 requires the Texas Department of Insurance to establish a vehicle insurance verification system.

What if I lease a car?

If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You'll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.

Collision covers the damage to the car from an accident with another automobile or object.
Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.

The leasing company may also require "gap" insurance. This refers to the fact that if you have an accident and your leased car is damaged beyond repair or "totaled," there's likely to be a difference between the amount that you still owe the auto dealer and the check you'll get from your insurance company. That's because the insurance company's check is based on the car's actual cash value which takes into account depreciation. The difference between the two amounts is known as the "gap."

On a leased car, the cost of gap insurance is generally rolled into the lease payments. You don't actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a "gap waiver." This means that if your leased car is totaled, you won't have to pay the dealer the gap amount. Check with the auto dealer when leasing your car.

If you have an auto loan rather than a lease, you may want to buy gap insurance to protect yourself from having to come up with the gap amount if your car is totaled before you've finished paying for it. Ask your insurance agent about gap insurance or search the Internet. Gap insurance may not be available in some states.

Do I need insurance to rent a car?

	When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and comprehensive, this may be enough. Before you rent a car: Contact your insurance company. Find out how much coverage you have on your own car. In most cases, the coverage and deductibles you have on your personal auto policy would apply to a rental car, providing it's used for pleasure and not business. If you don't have comprehensive and collision coverage on your own car, you will not be covered if your rental car is stolen or if it is damaged in an accident. Call your credit card company. Find out what insurance your card provides. Levels of coverage vary. If you don't have auto insurance, you have two choices: you can buy coverage at the car rental counter; or you can purchase a a non-owner auto liability insurance policy .

	Rental car counter insurance Rental car counter insurance can provide the following coverage: Collision Damage Waiver (CDW). Sometimes called a Loss Damage Waiver (LDW), this coverage relieves you of financial responsibility if your rental car is damaged or stolen. The CDW may be void, however, if you cause an accident by speeding, driving on unpaved roads or driving while intoxicated. This coverage generally costs between $9 and $19 a day. If you have comprehensive and collision on your own car, you may not need to purchase this coverage. Liability Insurance. This provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. Generally, this does not offer enough protection in a serious accident. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance. It generally costs about $9 to $14 a day. If you don't own a car, and rent cars often, consider purchasing a non-owner liability policy. This costs approximately $200 - $300 per year. Frequent car renters sometimes find this more cost-effective than constantly paying for the extra liability coverage. Personal Accident Insurance. This provides coverage to you and your passengers for medical/ambulance bills. This type of insurance, usually costs about $1 to $5 per day, but may be unnecessary if you are covered by health insurance or have adequate medical coverage under your auto policy. Personal Effects Coverage. This provides coverage for the theft of personal items in your car. However, if you have homeowners or renters insurance, you may be covered for items stolen from the car, minus your deductible. You need to have receipts or other proof of ownership. This type of insurance usually costs about $1 to $4 per day. Some rental car companies combine personal accident and personal effects coverage together as one type of insurance, while others sell it individually. The cost of insurance at the rental car counter will vary depending on the rental car company, state, and location of the dealer and the type of car you rent. Some rental car companies may check your credit and driving history and may deny coverage. Check with the rental car company to find out its policy.

	Non-owned auto liability insurance Instead of buying liability coverage from the car rental company each time you rent a car, you can purchase a non-owner auto liability insurance policy from an insurance company for about $300 a year which might be cheaper if you rent frequently. In addition, if you're thinking of buying an umbrella liability policy, a non-owner auto policy may meet the underlying auto insurance policy requirements. Umbrella liability insurance provides high limits of liability coverage above basic policies. Most insurers will not issue an umbrella liability policy unless the basic policies meet certain dollar limits of coverage. A non-owned auto insurance policy covers you for damage you may cause to some else’s car and liability for injuries to its occupants, or to pedestrian, in the event of an accident. The policy will also provide medical payments coverage for you and your passengers, and under-insured and uninsured coverage. This pays for the cost of an accident involving a hit-and-run driver or a driver who has little or no insurance. However, non-owned auto insurance does not provide collision coverage. Collision coverage pays for damage to the car you’re driving if you crash into another car or object or the car rolls over. You have to buy this from the car rental company. However, some credit cards provide collision coverage if the rental car is paid for with the card—so check with your credit card company first.

	Note: If you're renting a car abroad, you may need an international drivers license.

What are the driving laws in my state?

AUTOMOBILE FINANCIAL RESPONSIBILITY LAWS

Most states require car owners to buy a minimum amount of bodily injury and property damage liability insurance before they can legally drive their cars. All states have financial responsibility laws. This means that people involved in an automobile accident will be required to furnish proof of financial responsibility up to certain minimum dollar limits. To comply with financial responsibility laws, most drivers purchase automobile liability insurance. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident since accidents may cost far more than the minimum limits mandated by most states.

AUTOMOBILE FINANCIAL RESPONSIBILITY LIMITS AND ENFORCEMENT BY STATE

			Proof of insurance required (1)
State	Insurance required (2)	Minimum liability limits (3)	At registration	At time of accident	At all times in vehicle	Insurer verification of insurance (4)	Penalties for noncompliance (first offense)
AL	BI & PD Liab	20/40/10	Yes	Yes	Yes	c	$500 fine, license suspension (6)
AK	BI & PD Liab	50/100/25	No	No (5)	Yes	b	license suspension/revocation (6)
AZ	BI & PD Liab	15/30/10	No (7)	Yes	Yes	a,b,d	$250 fine, license suspension
AR	BI & PD Liab, PIP	25/50/25	Yes	No	No	b,d	$50-$250 fine
CA	BI & PD Liab	15/30/5 (8)	Yes	Yes	Yes	a,b,d	$100-$200 fine
CO	BI & PD Liab	25/50/15	Yes	Yes	Yes	a,d	$500 fine
CT	BI & PD Liab, UM, UIM	20/40/10	Yes	Yes	Yes	a	registration suspension
DE	BI & PD Liab, PIP	15/30/10	No	Yes	Yes	b,c,d	$1,500-$2,000 fine; six-month license suspension
DC	BI & PD Liab, UM	25/50/10	Yes	Yes	Yes	a,c	$300-$500 fine or maximum 30 days jail
FL	PD Liab, PIP	10/20/10 (9)	Yes	Yes	Yes	a,d	license/registration revocation (6)
GA	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,d	$200-$1,000 fine, maximum 12 months jail (6)
HI	BI & PD Liab, PIP	20/40/10	No	Yes	Yes	a	$500 fine
ID	BI & PD Liab	25/50/15	No	Yes	Yes	none	$75 fine
IL	BI & PD Liab, UM	20/40/15	Yes	Yes	Yes	b,c	$500-$1,000 fine
IN	BI & PD Liab	25/50/10	Yes	Yes	No	a	1-year license and/or registration suspension
IA	BI & PD Liab	20/40/15	No	Yes	Yes	a	removal of license plates/registration receipt, possible impoundment
KS	BI & PD Liab, PIP, UM	25/50/10	Yes	No	No	a	$300-$1,000 fine, maximum 6 months jail
KY	BI & PD Liab, PIP	25/50/10	Yes	Yes	Yes	a,d	$500-$1,000 fine and/or up to 90 days in jail
LA	BI & PD Liab	10/20/10	Yes	No (5)	Yes	a,d	$50 reinstatement fee, confiscation of plates
ME	BI & PD Liab, UM, UIM	50/100/25 (10)	No	Yes	Yes	a,b	$100-$500 fine, 30-day license and registration suspension (6)
MD	BI & PD Liab, PIP (11), UM	20/40/15	Yes	No	No	a	up to $1,000 fine and/or 1-year jail (6)
MA	BI & PD Liab, PIP, UM	20/40/5	Yes	No	No	a,d	$500-$5,000 fine or maximum 1-year jail (6)
MI	BI & PD Liab, PIP	20/40/10	Yes	No	No	a	$200-$500 fine or maximum 1-year jail (6)
MN	BI & PD Liab, PIP, UM, UIM	30/60/10	No	Yes	Yes	c	$200-$1,000 fine, maximum 90-days jail (6)
MS	BI & PD Liab	25/50/25	No	Yes	Yes	a	$500 fine, license suspension
MO	BI & PD Liab, UM	25/50/10	Yes	Yes	Yes	a,d	license and registration revocation, $20 reinstatement fee (6)
MT	BI & PD Liab	25/50/10	No	Yes	Yes	a	$250-$500 fine or not more than 10 days in jail
NE	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,b	$500 fine (6), license and registration suspension
NV	BI & PD Liab	15/30/10	No	Yes	Yes	a,d	up to $1,000 fine (6)
NH	FR only, UM	25/50/25	No	No (5)	No	None	none
NJ	BI & PD Liab, PIP, UM	15/30/5 (12)	No	Yes	Yes	a,d	$300-$1,000 fine, community service, 1-year license suspension
NM	BI & PD Liab	25/50/10	Yes	No	No	a,c,d	up to $300 fine, registration suspension (6)
NY	BI & PD Liab, PIP, UM	25/50/10 (13)	Yes	Yes	Yes	a,d	$150-$1,500 fine, maximum 15-days jail
NC	BI & PD Liab	30/60/25	No	No	No	a,d	$50 fine, 30-day registration suspension (6)
ND	BI & PD Liab, PIP, UM	25/50/25	No	No (5)	No	c	$150 fine, registration revocation, license suspension
OH	BI & PD Liab	12.5/25/7.5	No	Yes	Yes	a,c	90-day license suspension, $75 reinstatement fee
OK	BI & PD Liab	25/50/25	Yes	Yes	Yes	a,d*	$250 fine, no more than 30 days jail, license and registration suspension (6)
OR	BI & PD Liab, PIP, UM	25/50/10	No	Yes	Yes	a,c	license suspension and/or revocation (6)
PA	BI & PD Liab, PIP	15/30/5	No	Yes	Yes	a	$300 fine, license and registration suspension (6)
RI	BI & PD Liab, UM	25/50/25 (9)	No	No	No	c	$100-$500 fine, up to 3 months license/registration suspension
SC	BI & PD Liab, UM	25/50/25	Yes	Yes	Yes	a,d	$100-$200 fine, less than 30 days jail
SD	BI & PD Liab, UM	25/50/25	No	Yes	Yes	a	up to 1-year license suspension (6)
TN	BI & PD Liab	25/50/10 (9)	No	No	Yes	a	up to $100 fine
TX	BI & PD Liab	20/40/15	Yes	Yes	No	a,b**	$175-$350 fine
UT	BI & PD Liab, PIP	25/50/15 (9)	No	Yes	Yes	d	$400 fine
VT	BI & PD Liab, UM, UIM	25/50/10	No	Yes	Yes	c	less than $100 fine, license suspension (6)
VA	BI & PD Liab, UM	25/50/20	No	No	No	a,b,c,d	none
WA	BI & PD Liab	25/50/10	No	No	No	a	$250 fine, community restitution (6)
WV	BI & PD Liab, UM	20/40/10	Yes	Yes	Yes	a	30-day license suspension, registration revocation, $200-$5,000 fine
WI	FR only, UM	25/50/10	No	No	No	a	license and or registration revocation (6)
WY	BI & PD Liab	25/50/20	Yes	Yes	Yes	c,d*	up to $750 fine; up to six months in jail
(1) Proof of valid insurance. The form of evidence varies by state and may take the form of an insurance policy, binder, certificate of self-insurance, surety bonds, or certificate of deposit. Many states require insurance identification cards issued by the insurer. Self-certification, where the driver is required to identify the insurer and policy number in writing rather than in person, is not included. "Yes" in "At all times" columns includes states where drivers must produce proof on demand. (2) Compulsory Coverages: BI Liab=Bodily injury liability PD Liab=Property damage liability UM=Uninsured motorist PD=Physical damage Med=First party (policyholder) medical expenses UIM=Underinsured motorist PIP=Personal Injury Protection. Mandatory in no-fault states. Includes medical, rehabilitation, loss of earnings and funeral expenses. In some states PIP includes essential services such as child care. FR=Financial responsibility only. Insurance not compulsory. (3) The first two numbers refer to bodily injury liability limits and the third number to property liability. For example, 20/40/10 means coverage up to $40,000 for all persons injured in an accident, subject to a limit of $20,000 for one individual, and $10,000 coverage for property damage. (4) a. Insurer must notify Department of Motor Vehicles or other state agency of cancellation or nonrenewal. b. Insurer must verify financial responsibility or insurance after an accident or arrest. c. Insurer must verify randomly selected insurance policies upon request. d. Insurers must submit entire list of insurance in effect, which may be compared with registrations at a state agency. Also known as a computer data law. Also includes cases where insurers are required to report new issues and/or renewals. (5) Insured must provide evidence of insurance at some point after the accident to the Department of Insurance, other state agency, or law enforcement officer. Deadlines vary among the states. (6) Penalties are provided for in the law but may not be mandatory for first offenses. (7) Proof of insurance must be presented within 30 days of registration. (8) Low-cost policy limits for low-income drivers in the California Automobile Assigned Risk Plan are 10/20/3. (9) Instead of policy limits, policyholders can satisfy the requirement with a combined single limit policy. Amounts vary by state. (10) In addition, policyholders must also carry at least $1,000 for medical payments. (11) May be waived for the policyholder but is compulsory for passengers. (12) Basic policy (optional) limits are 10/10/5. Uninsured and underinsured motorist coverge not available under the basic policy but uninsured motorist coverage is required under the standard policy. (13) In addition, policyholders must have 50/100 for wrongful death coverage. The system must be operational by July 1, 2008. *SB 1670, effective September 1, 2005 requires the Texas Department of Insurance to establish a vehicle insurance verification system. Source: Property Casualty Insurers Association of America; state departments of insurance and motor vehicles.

STATE AUTO INSURANCE LAWS GOVERNING LIABILITY COVERAGE

	First-party benefits		Restrictions on lawsuits		Thresholds for lawsuits
“True” no-fault	Compulsory	Optional	Yes	No	Monetary	Verbal
Florida	X		X			X
Hawaii	X		X		X
Kansas	X		X		X
Kentucky	X		X	X (1)	X (1)
Massachusetts	X		X		X
Michigan	X		X			X
Minnesota	X		X		X
New Jersey	X		X	X (1)		X (1), (2)
New York	X		X			X
North Dakota	X		X		X
Pennsylvania	X		X	X (1)		X (1)
Utah	X		X		X
Puerto Rico	X		X		X

Add-on
Arkansas		X		X
Delaware	X			X
D.C.		X	X (3)	X (3)
Maryland	X			X
New Hampshire		X		X
Oregon	X			X
South Dakota		X		X
Texas		X		X
Virginia		X		X
Washington		X		X
Wisconsin		X		X
(1) “Choice” no-fault state. Policyholder can choose a policy based on the no-fault system or traditional tort liability. (2) Verbal threshold for the Basic Liability Policy, the Special Policy and the Standard Policy where the policyholder chooses no-fault. The Basic and Special Policies contain lower amounts of coverage. (3) The District of Columbia is neither a true no-fault nor add-on state. Drivers are offered the option of no-fault or fault-based coverage, but in the event of an accident a driver who originally chose no-fault benefits has 60 days to decide whether to receive those benefits or file a claim against the other party. Source: American Insurance Association.

In the following 28 states auto liability is based on the traditional tort liability system. In these states, there are no restrictions on lawsuits:

Alabama
Alaska
Arizona
California
Colorado
Connecticut
Georgia
Idaho
Illinois
Indiana
Iowa
Louisiana
Maine
Mississippi
Missouri
Montana
Nebraska
Nevada
New Mexico
North Carolina
Ohio
Oklahoma
Rhode Island
South Carolina
Tennessee
Vermont
West Virginia
Wyoming

SEAT-BELT LAWS

Only 24 states and the District of Columbia have a primary seat-belt enforcement law, which allows law enforcement officers to stop a car for noncompliance with seat-belt laws. The other states have secondary laws; officials can only issue seat-belt violations if they stop motorists for other infractions. New Hampshire is the only state that does not have a seat-belt law that applies to adults.

Seat-belt use reached a record 82 percent nationwide in June 2005. States with primary seat-belt laws had an average 85 percent usage rate, versus 75 percent in states with secondary laws.

STATE SEAT-BELT USE LAWS

State	Enacted legislation effective date	2006 usage rate (1)	Primary enforcement (2)	Additional information (3)
Alabama	6/1/2000	82.9%	X	$25 fine; front seat only
Alaska	9/12/1990	83.2	X	highway only; over age 16, $60; under age 16, $200 plus two points on license; all seats; damage mitigation by case law only
Arizona	1/1/1991	NA		damage mitigation; $10 fine; all seats
Arkansas	7/15/1991	69.3		$25 fine; front seat only
California	1/1/1986	93.4	X	$20 fine; all seats
Colorado	7/1/1987	80.3		$15 fine; front seat only; limited damage mitigation
Connecticut	1/1/1986	83.5	X	$15-$37 fine; front seat only
Delaware	1/1/1992	86.1	X	$25 fine; all seats
D.C.	12/12/1985	85.4	X	$50 fine; all seats
Florida	7/1/1986	NA		damage mitigation; $30 fine; all seats
Georgia	9/1/1988	NA	X	$15 fine; all seats
Hawaii	12/16/1985	92.5	X	$45 fine; all seats
Idaho	7/1/1986	79.8		$25 fine; all seats
Illinois	7/1/1985	87.8	X	$25 fine; front seat only (4)
Indiana	7/1/1987	84.3	X	$25 fine; front seat only
Iowa	7/1/1986	89.6	X	damage mitigation up to 5% max; $10 fine; front seat only
Kansas	7/1/1986	73.5		$10 fine; front seat only
Kentucky	7/13/1994	67.2	X	$25 fine; all seats
Louisiana	7/1/1986	74.8	X	$25 fine; front seat only
Maine	12/27/1995	77.2	X	$50 fine; all seats
Maryland	7/1/1986	NA	X	$25 fine; front seat only
Massachusetts	2/1/1994	66.9		$25 fine; all seats
Michigan	4/1/2000	94.3	X	damage mitigation up to 5% max; $25 fine; all seats
Minnesota	10/1/1986	83.3		$25 fine; front seat only
Mississippi	3/20/1990	73.6	X	$25 fine; all seats
Missouri	9/28/1985	75.2	(5)	damage mitigation up to 1% max; $10 fine; all seats
Montana	10/1/1987	79.0		$20 fine; all seats
Nebraska	1/1/1993	76.0		damage mitigation up to 5% max; $25 fine; front seat only
Nevada	7/1/1987	NA		$25 fine; all seats
New Hampshire		NA		under 18 yrs old: $25 fine
New Jersey	5/1/2000	90.0	X	$20 fine; damage mitigation; all seats
New Mexico	1/1/1986	89.6	X	$25 fine; all seats
New York	12/1/1984	83.0	X	damage mitigation; $50 fine; all seats
North Carolina	10/1/1985	88.5	X	$25 fine; front seat only
North Dakota	7/14/1994	79.0		damage mitigation; $20 fine; front seat only
Ohio	5/6/1986	81.7		damage mitigation; $20-$30 fine; front seat only
Oklahoma	2/1/1987	83.7	X	$20 fine; front seat only
Oregon	12/7/1990	94.1	X	damage mitigation; $75 fine; all seats
Pennsylvania	11/23/1987	NA		$10 fine; front seat only
Rhode Island	6/1/1991	NA	(5)	$57 fine; all seats
South Carolina	7/1/1989	72.5	X	$10 fine; all seats
South Dakota	1/1/1995	71.3		$20 fine; front seat only
Tennessee	4/21/1986	78.6	X	up to $50 fine
Texas	9/1/1985	90.4	X	$200 fine; all seats
Utah	4/28/1986	88.6	(5)	$45 fine; all seats
Vermont	1/1/1994	82.4		$25 fine; all seats
Virginia	1/1/1988	78.7		$25 fine; front seat only
Washington	6/11/1986	96.3	X	$37 fine; all seats
West Virginia	9/1/1993	NA		damage mitigation up to 5% max for medical expenses only; $25 fine; all seats
Wisconsin	12/1/1987	75.4		damage mitigation up to 15% max; $10 fine; all seats
Wyoming	6/8/1989	63.5		$10-$25 fine; all seats
United States		81.0
(1) Surveys used by states must be actual observation of shoulder belt use by drivers and front seat passengers. (2) Primary enforcement means police may stop a vehicle and issue a fine for noncompliance with seat belt laws. In other states, the law provides for secondary enforcement. This means that police may issue a fine for not wearing a seat belt only if the vehicle has been stopped for other traffic violations. (3) Applies to motor vehicle operators and passengers who are 16 years old and older. Damage mitigation means that a violation may result in damages, a legal term meaning court awarded compensation for injury, being reduced up to a certain percentage. Fines are the maximum allowed by law. (4) All seats if driver is under 18. (5) Primary enforcement for children; ages vary. NA=Data not available. Source: National Highway Traffic Safety Administration, U.S. Department of Transportation; Insurance Institute for Highway Safety.

DRUNK DRIVING LAWS

By 2004 every state and the District of Columbia had lowered the limit defining drunk driving from 0.10 BAC (blood-alcohol content) to 0.08.

STATE LAWS CURBING DRUNK DRIVING

	License revocation
State	Admin. Iicense rev./ susp. (1)	Manda-tory 90-day license rev./ susp. (2)	Open con-tainer law (3)	Prelim. breath test permit-ted by law	DWI plea bargain-ing prohib-ited
Alabama	X	X	X
Alaska	X	X	X (4)	X
Arizona	X	X	X	X	X
Arkansas	X	X			X
California	X	X	X	X	X
Colorado	X	X	X	X	X
Connecticut	X	X
Delaware	X	X		X
D.C.	X	X	X	X
Florida	X	X	X	X	X (5)
Georgia	X	X	X
Hawaii	X	X	X	X (5)
Idaho	X	X	X
Illinois	X	X	X	X
Indiana	X	X	X	X (5)
Iowa	X	X	X	X
Kansas	X		X (4)	X	X
Kentucky			X	X	X (5)
Louisiana	X	X	X
Maine	X	X	X
Maryland	X		X	X
Massachusetts	X	X	X
Michigan			X	X	X (5)
Minnesota	X	X	X	X
Mississippi	X	X		X	X
Missouri	X			X
Montana			X	X
Nebraska	X	X	X	X
Nevada	X	X	X	X	X
New Hampshire	X	X	X	X
New Jersey			X		X (6)
New Mexico	X	X	X		X (5)
New York	(7)		X	X	X
North Carolina	X		X	X (5)
North Dakota	X	X	X	X
Ohio	X	X	X
Oklahoma	X	X	X (4)
Oregon	X	X	X		X
Pennsylvania			X	X	X (5)
Rhode Island			X (4)	X
South Carolina	X	X	X
South Dakota			X	X
Tennessee			X (4)
Texas	X	X	X
Utah	X	X	X		X (5)
Vermont	X	X	X	X
Virginia	X			X
Washington	X	X	X
West Virginia	X	X		X
Wisconsin	X	X	X	X
Wyoming	X	X	X (4)		X
(1) On-the-spot drivers license suspension or revocation if BAC is over the legal limit or the driver refuses to take a BAC test. (2) Mandatory penalty for violation of the implied consent law, which means that drivers who refuse to take a breath alcohol test when stopped or arrested for drunk driving will have their license revoked or suspended. (3) Prohibits unsealed alcohol containers in motor vehicle passenger compartments for all occupants. Arresting officer not required to witness consumption. (4) Applies only to the driver. (5) With limitations or conditions. (6) Not specifically for drunk driving; Attorney General has established a no plea bargain policy. (7) Administrative license suspension lasts until prosecution is complete. Source: U.S. Department of Transportation, National Highway Traffic Safety Administration; Insurance Institute for Highway Safety; Property Casualty Insurers Association of America; Insurance Information Institute.

All states and the District of Columbia have adopted 21 as the legal drinking age.
All states have more stringent restrictions for under-21 drivers, ranging from zero tolerance to a limit of 0.02 BAC.
A death is considered alcohol-related when any person involved in the accident had some measure of alcohol in his or her blood, even if it was below the legal limit.
There is an alcohol-related traffic death in the United States every 31 minutes and an injury every 2 minutes.
In 2005, 16,885 traffic deaths were alcohol-related, down 0.2 percent from 16,919 in 2004.
In 2005, 39 percent of all traffic fatalities were alcohol-related, unchanged from 2004 but down from 51 percent in 1990.
A major factor in the long-term downward trend in alcohol-related fatalities is the enactment, beginning in the 1980s, of state laws designed to deter drunk driving such as:

— Requiring persons to be at least 21 years old before they can purchase alcohol

— Mandatory drivers license revocation when a driver’s BAC level is above the state’s legal limit

— Lowering the legal BAC level to 0.08

— Prohibiting open containers of alcoholic beverages in motor vehicles

— Increasing measures to prevent underage drivers from obtaining alcohol

— Canceling the vehicle registration of drivers who have had their licenses suspended or revoked due to alcohol-related offenses

— Instituting sobriety checkpoints

OLDER DRIVERS

“Older” drivers (age 70 and above) have higher rates of fatal crashes, based on estimated annual travel, than any other group except young (under age 21) drivers, according to the U.S. Department of Transportation, in part because they are less likely to survive the trauma of an accident.

Recognizing the higher fatality rates and the need for older drivers to retain their mobility and independence, some states issue restricted licenses. Depending on ability, older drivers may be limited to driving during daylight hours or on nonfreeway types of roads. In most states, restrictions such as these can be placed on anyone’s drivers license, regardless of age, if his or her medical condition warrants it.

STATE DRIVERS LICENSE RENEWAL LAWS INCLUDING REQUIREMENTS FOR OLDER DRIVERS

	Require retest for renewals at all ages (1)				Age at which states require older drivers to pass tests
State	Vision	Road	Know- ledge	Medical	Vision	Road	Know- ledge	Medical	Require doctors to report medical conditions (2)	Age limits on mail renewal
Alabama
Alaska	X	(3)	X							69
Arizona	X	(3)			65					70
Arkansas	X
California	X	(3)	X	(3)					X (4)	70
Colorado	X	(3)	(3)	X						61
Connecticut					65					65
Delaware		(3)	(3)	(3)	(3)	(3)	(3)	(3)	X
D.C.					70	75	75	70
Florida	X	(3)	(3)		80					(13)
Georgia	X			(3)					X	64
Hawaii	X	(3)		(3)		(3)	(3)	(3)
Idaho	X	(3)		(3)
Illinois	(5)		X	(3)		75
Indiana				(3)				(3)
Iowa		(3)	(3)	(3)
Kansas	X	(3)	X
Kentucky		(3)		(3)
Louisiana	X	(3)	X		70					70
Maine					40, 62 (6)
Maryland	X	(3)	(3)		40			(3)
Massachusetts
Michigan	X	(3)	X	(3)
Minnesota	X		X
Mississippi		(3)	(3)
Missouri	X
Montana	X	(3)								(13)
Nebraska	X	(3)	(3)
Nevada	X (7)	(3)	(3)		65			70 (8)	X	(14)
New Hampshire	X					75
New Jersey	(9)								X
New Mexico
New York		(3)	(3)	(3)
North Carolina	X	(3)	X	(3)
North Dakota	X	(3)	(3)
Ohio	X	(3)	(3)	(3)
Oklahoma	(9)
Oregon					50				X
Pennsylvania	(10)			(8)	45 (11)			45 (11)	X
Rhode Island	X	(3)		(3)
South Carolina	X	(3)	(3)	(3)	65
South Dakota	X
Tennessee	(12)
Texas	X			(3)
Utah		(3)	(3)	X	65				X
Vermont
Virginia	X		(3)		80
Washington	(3)	(3)	(3)	X
West Virginia									X
Wisconsin		(3)		(3)
Wyoming	X	(3)	(3)
(1) Periodic retests. Some states will waive vision retests for mail renewal or clean-record drivers. (2) Physicians must report physical conditions that might impair driving skills. (3) Retesting only for cause, e.g., after specific number of accidents or other points and infractions, for specific physical conditions; sometimes at examiner’s discretion. (4) Specifically requires doctors to report a diagnosis of dementia. (5) 8-year vision re-examination. (6) Vision tests are required at first renewal at age 40; at every second renewal after age 40; at every renewal after age 62. (7) Except for in-state renewals by mail, unless applicant is over 70. (8) Renewing by mail. (9) 10 percent of all renewals are screened. (10) 10 percent of drivers at or over 45 randomly chosen for medical and/or vision test. (11) Random re-examination at specified age. (12) Will retest at renewal for nonspecified cause. (13) Only two successive renewals may be made electronically or by mail, regardless of age. (14) All drivers must renew in person every 8 years. Source: U.S. Department of Transportation, Federal Highway Administration; AARP; American Automobile Association; American Association of Motor Vehicle Administrators; Insurance Institute for Highway Safety.

YOUNG DRIVER LAWS

Young drivers account for a disproportionate number of motor vehicle crashes. States are increasingly adopting laws to help lower the crash rate. One approach has been to lower blood alcohol content (BAC) limits so those young drivers who drink even small amounts of alcohol will be penalized. Another has been to require a more rigorous learning period before granting young drivers the privilege of a drivers license. This requires young drivers between the ages of 15 and 18 to apply for a graduated drivers license (GDL) to help them improve their driving skills and habits before receiving full driving privileges.

Graduated licensing as defined by the National Highway Traffic Safety Administration consists of three stages. Some of the requirements and recommendations included in Stage 1 (learner’s permit) are a vision test, a road knowledge test, driving accompanied by a licensed adult, safety-belt use by all vehicle occupants, a zero BAC level, and six months with no crashes or convictions for traffic violations. Stage 2 (intermediate license) includes the completion of Stage 1, a behind-the-wheel road test, advanced driver education training, driving accompanied by a licensed adult at night, and 12 consecutive months with no crashes or convictions for traffic offenses before reaching Stage 3 (full license).

Every state has some form of restriction on young drivers. Most states and the District of Columbia have three-stage graduated licensing systems, but the systems vary in strength. Other states have enacted only some components of graduated licensing.

Motor vehicle crashes are the leading cause of death among 15- to 20-year olds.
Among licensed drivers, motorists between the ages of 15 and 20 have the highest rate of fatal crashes relative to other age groups, including the elderly.
Immaturity and lack of driving experience are the two main factors leading to the high crash rate among teens. Graduated licensing laws have been successful in reducing teen motor vehicle accidents, according to the Insurance Institute for Highway Safety.

STATE YOUNG DRIVER LAWS (1)

	Graduated licensing (2)
State	Learners permit required for a minimum period	Intermediate or provisional license required	Restrictions on night driving (3)	Passenger restrictions (4)	Driver may not operate a cell phone in learner and/or intermediate stages
Alabama	6 months	X	X	X
Alaska	6 months	X	X	X
Arizona	5 months
Arkansas	6 months	X
California	6 months	X	X	X	X (5)*
Colorado	12 months	X	X	X (6)	X
Connecticut	6 months (7)	X	X	X	X (5)
Delaware	6 months	X	X	X	X
D.C.	6 months	X	X	X	X (5)
Florida	12 months	X	X
Georgia	12 months	X	X	X
Hawaii	6 months	X	X	X
Idaho	6 months	X	X	X
Illinois	3 months	X	X	X	X
Indiana	2 months	X	X	X
Iowa	6 months	X	X
Kansas	6 months
Kentucky	6 months	X	X	X
Louisiana	6 months	X	X
Maine	6 months	X	X	X	X
Maryland	6 months	X	X	X	X
Massachusetts	6 months	X	X	X
Michigan	6 months	X	X
Minnesota	6 months	X			X
Mississippi	6 months	X	X
Missouri	6 months	X	X	X
Montana	6 months	X	X	X
Nebraska	6 months**	X	X	X**	X**
Nevada	6 months (8)	X	X	X
New Hampshire	3 months (9)	X	X	X
New Jersey	6 months	X	X	X	X (5)
New Mexico	6 months	X	X	X
New York	6 months (10)	X	X	X	X (5)
North Carolina	12 months	X	X (11)	X	X (12), (13)
North Dakota	6 months
Ohio	6 months	X	X	X
Oklahoma	6 months	X	X	X
Oregon	6 months	X	X	X
Pennsylvania	6 months	X	X
Rhode Island	6 months	X	X	X	X (12)
South Carolina	6 months	X	X	X
South Dakota	6 months (7)	X	X
Tennessee	6 months	X	X	X	X
Texas	6 months	X	X	X	X
Utah	6 months	X	X (14)	X
Vermont	12 months	X		X
Virginia	9 months	X	X	X	X***
Washington	6 months	X	X	X
West Virginia	6 months	X	X	X	X
Wisconsin	6 months	X	X	X
Wyoming	10 days	X	X	X
(1) Designed to aid young novice drivers between the ages of 15 and 18 gain driving experience. To date they apply only to drivers under the age of 18. All states have lower blood alcohol content laws for under-21 drivers which range from none to 0.02, in contrast with 0.08 for drivers over the age of 21 in all states. (2) Graduated licensing as defined by the National Highway Traffic Safety Administration. (3) Vary by state with regard to age of driver, night hours that driving is restricted, and who must accompany driver during night hours. Exceptions may be made for work, school activities or emergencies. (4) Limits the number of passengers a young driver may have in the vehicle to eliminate distractions. (5) Laws ban all drivers from using handheld cell phones. (6) For the first six months, newly licensed teen drivers must not transport under-21 passengers unless a licensed driver over age 21 is present. During the next six months, teen drivers may transport only one under-21 passenger. (7) Required for a shorter period if driver has taken a drivers education course. (8) Driver education required of all licensed applicants under age 18 unless there is no program within a 30-mile radius of the applicant's residence. (9) New Hampshire does not issue learner’s permits. The minimum holding period refers to the intermediate license for 16-and 17-year-olds for the first 3 months only. (10) Minimum holding period applies to the limited junior driver license for permit holders who pass a road test and certify 20 or more hours of practice; with some restrictions. (11) For the first six months after a learner’s permit is issued. Thereafter there are no restrictions. (12) For drivers younger than 18. (13) Cell phone restriction does not apply to calls with physicians, parent, guardian or spouse. (14) Drivers under age 17 may operate a vehicle between the hours of 12:00 am and 5:00 am if driving directly to the driver's residence from a school-sponsored activity for which transportation to and from the school property was provided. Effective July 1, 2008. Effective January 1, 2008. **Effective July 1, 2007. Source: Insurance Institute for Highway Safety; U.S. Department of Transportation, National Highway Traffic Safety Administration; National Conference of State Legislatures; Insurance Information Institute.