Vehicle Insurance Requirements

Vehicle insurance requirements vary from state to state. Some requirements are needed to register your vehicle. Not having the vehicle insurance required can cost you your license to drive legally in the state. Some vehicle insurance requirements are ordered by the lease or finance company. The reason insurance is required is to protect others in the event you cause an accident or to protect you if you or your vehicle is involved in some kind of loss.

Vehicle Insurance Requirements to Register

Each state requires a vehicle owner to prove financial responsibility before it will register a vehicle. Most states have a minimum insurance requirement needed to comply. Liability insurance is the most common, but some states require personal injury coverages for you as well as for your passengers. Some states will allow you to post a financial bond for a minimum amount rather than carrying insurance.

Liability Insurance Definition

Liability coverage pays for property damage or bodily injury to other people when you are found at fault for an accident. Most states have a per person/per accident vehicle insurance coverage requirement for bodily injuries to drive legally. Most also require a minimum amount of property damage insurance coverage to pay to repair others' damaged personal property.

Financed/Leased Cars

Financed or leased vehicles have special vehicle insurance requirements by the finance company. Part of the lease or financing agreement is that the owner will carry insurance coverage for the vehicle to repair or replace the car in the event of an accident. The amount varies per lease or finance agreement. If a car owner does not maintain the insurance requirements for the vehicle, the finance company will force-place insurance on the car. Force-placed insurance costs are added to the monthly payment. Force-placed insurance is usually more expensive than the cost of getting your own insurance.

Personal Injury

Some states require that vehicle owners carrying personal injury protection, also known as PIP. This coverage pays for medical costs for the driver and their passengers regardless of who is at fault. Personal injury protection may also cover you if you are a pedestrian hit by a car as long as you have the coverage on your vehicle.

Information Needed

You will need to provide certain information to get car insurance. The required information varies from state to state but can include your Social Security number, the vehicle identification number, the ages and names of all drivers in the household and the driver record of all drivers covered. You will also need to provide the year, make and model of the vehicle to be insured.