Every state has an agency that handles auto insurance requirements. For most states, this is known as the department of motor vehicles. The regulations and minimums are set on a state level and they vary based on state auto insurance laws, population density and other factors.
The biggest variation with auto insurance is between states that are considered no-fault states and tort states. A no-fault state is one in which the driver of the vehicle is responsible for injury to everyone in his or her vehicle regardless of who is at-fault.
How do no-fault and tort states impact the auto insurance minimums?
All states that are no-fault states require motorists to carry personal injury protection. This will protect you and your passengers in the event of an accident that causes bodily injury. Since there is no fault determined in the car accident, your insurance policy needs to cover your injuries. In other states, the insurance policy of the driver who is at-fault will be required to pay the bill.
Some states require motorists to carry uninsured motorist coverage. This further protects you in the event that you sustain injuries from an accident caused by an uninsured driver. That driver would be in breach of the law for not having the minimum required amount of liability insurance. This still ensures that drivers are protected from the negligence of other motorists.
Why are there minimum requirements for auto insurance?
The purpose behind the minimum coverage is to protect all motorists and pedestrians in terms of bodily injury that is sustained from an accident. Not all states require you to purchase insurance to protect yourself in the event of an accident, but almost all require you to purchase insurance to pay for medical expenses from injuries sustained by other motorists involved in the accident.
In an at-fault state a person that in an accident that sustains injuries needs to have proper medical care. By having that driverâ€™s own insurance pay for this it ensures that somebody injured in an accident will receive medical care and not be turned away for not having insurance.