In the United States, it is completely illegal to drive without car insurance coverage, and for good reason. Without car insurance, any accident could potentially bankrupt one or both of the parties involved, and the legal system would be filled to the brim with auto law disputes. However, it is not enough to simply have some sort of car insurance policy. Each state sets a minimum amount of specific coverage types that a driver must buy. If the driver is involved in an accident and only has less than the required amount of insurance, he or she is in violation of the law. Penalties can be relatively harsh, and depending on the state, a driver’s license might be taken away, and heavy fines could be levied.

These sorts of marks against an individual’s record can be quite the burden, so buying the appropriate amount of car insurance is very important. Luckily, drivers have some help in this department. In many states, if a driver is under the set coverage limits, he or she will receive warnings from the state’s insurance department, which provide an incentive to go in and get the right amount of coverage. If a customer is buying a car with a lease or a loan, the bank loaning the money will often require proof of car insurance, or the vehicle will be repossessed. Many insurance companies have also adapted their websites and phone support so that drivers asking for less than their state’s minimum require auto insurance coverage are turned away.

Still, it’s advantageous for a driver to know his or her state’s limits to avoid serious legal issues. All it takes to find this information is a call to the state car insurance commission or a visit to the state DMV’s website. Minimum amounts of coverage are usually clearly posted. The limits vary from state to state but always include liability coverage to protect other drivers. Many banks also require comprehensive as well as collision coverage insurance on the vehicle, but these requirements are not state mandated.

Knowing your legal car insurance minimums is important, but most consumers should consider buying a greater amount of coverage than the bare minimums. Remember that these limits are set to protect the other drivers on the road, but not necessarily to protect you or your vehicle. Buying additional coverage can help prevent a financially catastrophic accident and can provide for hospital and repair costs in major incidents. Other types of coverage can protect your vehicle from theft. Minimums are important, but more insurance is often helpful.