These are the maximum amounts your insurer will pay out after an accident you cause. MarketWatch Logo Go to the homepage. Learn More. How much car insurance do I need? A Home Media. Compare car insurance quotes. Answer a few simple questions to save money on your policy.
What type of car insurance do I need? State required coverage As mentioned, a liability insurance policy is required in some form by almost every state. Liability coverage is broken down into two parts: Bodily injury liability : Covers medical expenses and lost wages for individuals other than the at-fault driver Property damage liability : Reimburses another party for damage to their vehicle or property when the policyholder is at fault for an accident How much liability insurance do I need?
Other required coverage States may also mandate additional coverage besides bodily injury and property damage liability coverage. It offers assistance for medical expenses, lost wages and car damage.
Medical payments MedPay : MedPay covers medical bills for the policyholder and other passengers, regardless of fault. It also covers lost wages, funeral expenses and child care in certain situations. How much car insurance do I need when financing? Gap insurance In addition to comprehensive and collision coverage, a lienholder may ask that a driver purchase gap insurance as well. Optional types of insurance Outside of liability and full coverage insurance, there are a number of add-on policies that insurers offer to give drivers greater peace of mind on the road.
If the car is leased or financed, the leasing company or lender may require you to have Physical Damage coverage, even though the state law may not require it. Medical Expenses — Covers the cost of medical care for you and your passengers in the event of an accident.
The limit you choose under Medical Expenses coverage is the maximum that will be paid for medical claims to each driver. In some states, this coverage is limited to bodily injury, while in others it may cover property damage, as well. The limits required and optional limits that may be available are set by state law. Curfews can save lives. Learn how. What teens drive is almost as important as how teens drive. Learn why. Where will you or a family member be when your vehicle is disabled? Invest in peace of mind.
Get Saved Quotes. Text Size: A A A. The actual coverages in your state may differ and are specified by state law and the insurance policies of insurers offering the coverages. These choices will be signaled globally to our partners and will not affect browsing data.
We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Your Practice. Popular Courses. Investopedia Personal Finance. Table of Contents Expand. Personal Liability Insurance. Personal Liability Insurance Limits. Why Do You Need It? How Much Should You Buy? Key Takeaways Personal liability coverage protects you financially if you're at fault in an automobile accident that injures another person or damages someone's property.
Almost all states require car owners to have liability coverage as part of their auto insurance. States also set minimum amounts of liability coverage, but you can—and often should—buy more. Note Liability insurance doesn't pay for your medical expenses or repairs to your vehicle if you're involved in an accident.
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