Are you shopping for car insurance? It is important to know the terminology. The first time I went searching for an auto insurance policy the insurance agent asked me what I wanted the amount to be for bodily injury liability and property damage liability. I am pretty sure my response was, “huh??” I had no clue what he was referring to, so I just told him to give me the best coverage possible. While my response guarantees the best coverage, it is definitely not what the state requires and it also might be coverage than you need.

Liability insurance is divided into 3 different numbers (i.e. 10,000/20,000/10,000). The first 2 numbers represent personal injury coverage. The first number, in this case 10,000 is the maximum amount covered per person. The second number, 20,000, equals the maximum amount per accident. The third and final number, 10,000, is the property damage coverage.

When you purchase liability insurance, there is a minimum amount required by your state. If you choose, you can get additional coverage. Here is the minimum liability coverage required for 10 most populated states:

California: 15,000/30,000/5,000
Texas: 20,000/40,000/15,000
New York: 25,000/50,000/10,000
Florida: 10,000/20,000/10,000
Illinois: 20,000/40,000/15,000
Pennsylvania: 15,000/30,000/5,000
Ohio: 12,500/25,000/7,500
Michigan: 20,000/40,000/10,000
Georgia: 15,000/ 30,000/10,000
North Carolina: 30,000/60,000/25,000

Many of us hate paying costly insurance premiums, especially when we feel like we have a decent driving record or do not use or cars very often. If we were to evaluate our risk of getting in an accident, we would assume it was probably unlikely, so why is it that we have to pay for auto insurance?

No matter where you live, you are required to pay some time of auto insurance. Usually, you are required to pay for the liabilities that you might be at fault for, however the person injury protection and property damage levels often vary from state to state.

There are, however, a few that do not require liability insurance – Wisconsin and New Hampshire. Although, it may seem like a wonderful thing to be free from auto insurance premiums, these states do charge an annual. Apparently the fee can be as high as $500.

Also, before you consider packing up all your belongings and moving to one of these fine states to say on auto insurances, remember that you are putting yourself in serious financial jeopardy when you drive without auto insurance. Although you may be a great driver, you also never know when something could go wrong or someone with no insurance could hit you.

Everyone knows someone who is afraid of flying. They avoid planes, preferring to drive or take alternative transportation. Maybe you are this person. However, given the statistics, this is an odd principle to live by. After all, fewer accidents happen in planes. This is one of the reasons why most states require auto insurance. Depending on where you live, though, different models of auto insurance apply.

The first model of auto insurance is called the ballpark model. Did you realize that every time you attend a baseball game you put yourself at risk for injury from a baseball or a bat that might fall into the crowd? Maybe, but you probably didn’t consider the risk thoroughly when you attended that recent ball game. And, it’s not like you have insurance to cover your ballpark injuries. In a similar manner, when the ballpark model is applied to auto insurance, those on the road are merely participants in the traffic and they put themselves at risk for accident. It is up to them whether or not they want insurance.

Another model commonly used in auto insurance is the Disneyland model. When you are riding Space Mountain at Disneyland and something happens, Disneyland is liable. You paid for admission and it was their ride that malfunctioned. When the Disneyland model is applied to the road, you were simply granted admission to the road. Anything that happened and therefore caused you injury is now the liability of the responsible party and hopefully their insurance.

It’s not always easy to get the right insurance to meet your needs. You can find a lot of companies out there offering cheap rates, but do they really give you good coverage? You often get what you pay for, and using an insurance company that you know nothing about and have never heard of might not be a good choice when you have to make a claim. You can be left with nothing if your car is wrecked and there is some ‘loophole’ that keeps your insurance company from paying. Some companies simply disappear with your money, too, so that’s another thing that you should pay close attention to.

When you do find a great company, take the time to decide which coverage you need. If you have a nice, newer car you’ll likely want to have full coverage insurance so that anything that can happen to the car will be handled by the insurance company, minus your deductible. Most people set their deductible at $500, but there are other options.

Financed cars generally require full coverage, but it’s a good idea on all newer cars, regardless of financing status. For older cars, personal injury protection (PIP) and liability is usually all you’ll need, but if your car is still worth a bit or you live in a high crime area, adding comprehensive coverage that will handle fire, theft, and glass breakage can save you a lot of money and headaches.

If you believe the hype, you’ll find that you supposedly have to pay a great deal of money with a big-name company to get reliable car insurance. Now, it’s true that you shouldn’t use a fly-by-night company that you don’t know anything about, but that doesn’t mean that you have to use the most expensive company you can find. This isn’t a contest to see who can use the snootiest insurance company. You want good coverage at the lowest rate possible, and you can find that if you’re willing to look.

Some companies give discounts if you belong to a certain professional group or are in a certain age bracket, so be aware of that. Also, know that any legitimate company is worth working with if they can bring you low rates for the coverage you need. Just check out the company and make sure it’s valid and looks as though it won’t be going anywhere.

Shop around. If one company quotes you much higher than another, show them the lower quote and ask them why they charge more. Sometimes they’ve overlooked something and can lower your rate based on additional information. Also, some companies try to sign you up for a lot of extra coverage that you don’t need, so try to avoid that, as well. If you don’t travel much you probably don’t need roadside assistance or rental car reimbursement. Be smart. Buy only what you need.

If you have auto insurance, you probably don’t think much about it. You just drive your vehicles and do your thing. However, if you have a motorcycle you’ll find that the auto insurance you have to cover your car won’t cover your bike. Instead, you have to have specific insurance that’s just for your motorcycle, and you can get that through the agent or company that you got your car insurance from.

Most companies insure motorcycles and the cost is usually very low, but some companies charge more than others and some won’t insure motorcycles because they feel that the risk of injury (and therefore of paying a claim) is too high. Many states also don’t require motorcycles to be insured, largely because they don’t do much damage to vehicles or structures, so you might not even need insurance.

However, responsible riders generally insure their motorcycles anyway, if only to protect themselves and their families against the high cost of medical bills. Having PIP (personal injury protection) and liability is a good choice for any vehicle that you own, so look into getting them on your motorcycle and keeping them current. If you have an accident or need to make a claim, you’ll be glad that you have insurance to cover it.

In short, no. Auto insurance is not required in New Hampshire, Tennessee, and a couple of other states. However, you have to provide proof of financial responsibility, and you often have to have uninsured motorists coverage. As for things like PIP and liability, though, these states don’t require them. All other states want you to have some type of liability coverage, and most also ask for PIP, uninsured motorist coverage, and other specifics.

The amount of protection you have to have as a dollar figure also varies between states. Some states might require ten thousand dollars worth of PIP, for example, and other states might require twenty-five thousand, so it’s important to see what the requirements are where you live.

You definitely don’t want to go along without any insurance in a state that requires it. Even if you don’t have to have it, though, it’s a good idea because of the financial implications. If you have no insurance and are involved in an accident, who will pay to fix your vehicle? Who will cover your medical bills? Getting away with the cheapest choices are not always the best choices, and even though you aren’t required to carry a lot of insurance in some states you’ll be glad that you have it if you ever need it. It’s usually a pretty good investment.

Overall, there are three main types of car insurance – PIP (personal injury protection) and liability, comprehensive, and collision. PIP and liability is the type of insurance that most states require by law. There are still a few states that don’t require you to insure your vehicle, but there aren’t very many of them. People who do have insurance in these states often pay more, too, because the insurance companies know the chance of claims is higher when there are so many uninsured drivers on the road. PIP and liability covers medical bills and the damage that’s done by you to the property of others in a collision.

Comprehensive covers issues like fire, theft, and glass breakage, and it’s not required unless your vehicle is financed, but it’s still a good idea just in case. Collision only covers collisions, but it will pay to fix your car regardless of fault. If you don’t have it and the other driver is uninsured, paying to fix your car is your responsibility. That can be exceedingly costly – much more so than the price of the insurance.

Like comprehensive, collision insurance isn’t required unless you have your vehicle financed, but it’s still a good idea to have unless your vehicle is very old and/or worth very little.

What your car insurance will cover depends on the type of insurance that you get. If you get some that only offers minimum coverage you won’t be covered if your car is stolen, catches fire, or has the windows broken. You also won’t be covered to have your car repaired in a collision. In order to get that kinds of coverage you’ll need to purchase both comprehensive (fire, theft, and glass breakage) and collision coverage.

Naturally, if you’re in an accident that is the fault of someone else that person’s insurance should pay to fix your vehicle. But what if that person doesn’t have insurance? Then what? Just because insurance is required doesn’t mean that everyone has it, so if your car is worth much at all, or if you can’t afford to lose it, make sure you keep full coverage on it.

You can also get coverage for rental car reimbursement, towing and breakdowns, and other problems. Most basic car insurance, though, covers the damage that you do to someone else’s vehicle if you’re at fault, and the medical bills that you, your passengers, and the other driver and passengers may have from the accident. You can get car insurance that’s very simple or that’s very complex, depending on what you really need covered and what you’re willing to pay.

When it comes to car insurance you definitely want to get what you need at a good price. However, if you’re not that familiar with insurance it can be difficult to know what you really need. You might be confused by some of the terms or you might be unsure whether you need particular kinds of coverage.

Doing some research into the issue is a good idea, and you can also talk with an insurance agent – or more than one! Many people are getting their auto insurance online today, but you don’t have to do it that way if you don’t feel comfortable about it. If you’re unsure it’s better to find out before you buy a policy instead of having a problem and discovering that you’re not covered.

When something like that happens you can be out thousands of dollars, so it’s definitely something that you want to avoid. You should also avoid getting the cheapest car insurance possible. It might seem like a great deal at the time, but when it comes time to make a claim you might find that it’s not such a great deal after all. Saving money is wonderful but only if it’s a legitimate savings from a legitimate company. Make sure you’re getting your car insurance from a reputable place.