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Who and what does auto insurance cover?

In most areas of the country, having at least basic insurance coverage on a car that you drive is a requirement for taking it out on the roadway. However, this is not always the case. Auto insurance laws vary by state, and while most mandate coverage, a couple of jurisdictions make it optional.

However, if you have auto insurance, and chances are that you do, it may be helpful to know what your coverage entails and who your policy applies to. This way, you can tell if you are not getting the coverage you deserve from your insurance company. 

Basic requirements

According to the Insurance Information Institute, the minimum auto insurance coverage requirements you must meet depend a great deal upon the laws of your state. Three types of coverage requirements are nearly universal: 

  • Uninsured motorist coverage
  • Property damage liability
  • Bodily injury liability

In other words, you typically require enough coverage to pay for damage that you may cause to someone else's person or property with your car. Additionally, you need coverage for injuries or damage that you may sustain if someone without insurance crashes into you. Sixteen states also require personal injury protection, which covers medical expenses regardless of who is at fault. In other states, PIP coverage is available but not mandatory. 

Covered drivers

If you are the policyholder, you may add additional drivers to your policy, meaning that coverage extends to them if an accident occurs while they are operating the vehicle. This is helpful if you share the use of the car among two or more family members, roommates, etc. 

The information in this article is not intended as legal advice but provided for educational purposes only.

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