What to Know About Auto Insurance Coverage Limits

While every state except New Hampshire and Virginia require drivers to carry a minimum amount of liability coverage on their car, the amounts and types of insurance you need vary according to where you live. Of course, you can (and you may be required to) carry more than the minimum amount required by your state's laws.

While insurance coverage limits vary by state and policy, your policy limits indicate the maximum dollar amount an insurance company will pay following a covered accident. The car owner is fully responsible for paying the rest out of pocket when the limit is met.

Minimum insurance and coverage limits

Your state’s minimum requirements include bodily injury liability limits for each person involved in an accident, maximum bodily injury liability per accident, and property damage liability limits. The most liability coverage you can buy is $100,000 per person, $300,000 per accident, and $500,000 in property damage coverage.

Required insurance for financed vehicles

If you have a loan or lease on your vehicle, the lender is named on the title as the second owner. That way, if you default on your loan or fail to make your lease payments on time, they can legally repossess the car. Because your lender has a vested interest in the value of your vehicle, they typically require full coverage insurance and in some cases, gap insurance.

Understanding full coverage auto insurance and deductibles

Full coverage insurance covers your state's minimum requirements for liability and includes collision coverage, as well as comprehensive coverage. Some lenders may also require gap coverage, which covers the "gap" between the amount you owe on the car and the car's market value if you are in an accident that causes your insurance company to deem your vehicle a "total loss."

Full coverage auto insurance

With full coverage auto insurance, if your car is swept away in a flash flood, is damaged by falling rocks, or you are the victim of vandalism, your insurance will pay to have the damage fixed, minus your deductible. These insurance coverages also handle damage caused by an accident, even if the other driver is at fault and uninsured. Comprehensive and collision coverage will also cover repair costs if you hit a stationary object or an animal.

Auto insurance deductibles

Every time you make a claim, you must pay your deductible. You can set your deductible depending on your financial situation. Most insurance companies provide options that include $250, $500, or $1,000 deductibles. Higher deductibles usually come with lower premiums.

How much car insurance do I really need?

It's wise to purchase as much liability coverage as you can afford. When your insurance coverage runs out, you are personally responsible for covering the remaining bills associated with an accident you cause while driving.

Today, learn more about how Ridesure can help protect your financial stability with mechanical breakdown coverage.

If you own your car outright, you can choose whether to purchase additional coverage over your state's minimum requirement. You can also select more coverage than your state's minimum requirement whether you have a loan or lease or own your car.

However, if you don't have full coverage insurance and are in an accident where you are the at-fault driver or your car suffers damage due to events beyond your control like a fire or flood, insurance won't pay to repair the damage.

Does full coverage auto insurance cover mechanical breakdowns?

No, your auto insurance doesn't cover mechanical breakdowns due to failing parts and systems outside of included incidents and accidents. These breakdowns over time are inevitable and can be some of the most expensive repairs you'll make when you own your car.

With Ridesure, you'll have a partner who can help you pay for necessary repairs. The Ridesure representatives deal with claims so you can concentrate on getting on with your life, even when expensive auto repairs slow you down.