Basic Coverage: A Guide for Independent Students
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UPDATED: Nov 5, 2019
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Just as your driver’s license was an induction into adulthood, so is purchasing your first car insurance policy. Granted, finding the right insurance policy doesn’t carry the same adventurous allure of those first days on the open road; but you’ve probably discovered that the freedom and independence of adulthood requires some rather tedious obligations – like ironing and paying taxes. But finding the right car insurance doesn’t have to be complicated, and it doesn’t have to be expensive.
Let’s start with the basics. Before you can legally drive your vehicle, you need to meet a set of minimum insurance requirements determined by your state. If you’re an independent student and you’re taking out your own insurance policy, rather than remaining on your parents’ policy, it’s important to have an understanding of those requirements so you can shop around for the best rates.
Minimum auto insurance requirements exist as a protection for both you and the other drivers on the road. If you have insurance and you cause an accident, your coverage will help pay for the damages resulting from the collision. Insurance also works to keep you from getting sued and having to pay for damages and injuries out-of-pocket.
Exact minimum requirements will vary by state, and most states don’t require you to carry insurance coverage for your own vehicle or its occupants; however, all states have monetary requirements for damage and injury to other vehicles and occupants in the following categories:
- The bodily injury or death of one person in an accident
- The bodily injury or death of two or more people in an accident
- Property damage liability
Some states may require additional uninsured motorist coverage, which will protect you in the event that an uninsured driver injures you or damages your property, or in the event of a hit-and-run.
Some states, like Hawaii and Kansas, are considered no-fault states. These states require drivers to have personal injury coverage, which will help pay the policyholder’s medical bills, regardless of which driver is at fault for the accident. No-fault laws help protect drivers and keep insurance fraud rates low.
Once you have met the minimum insurance requirements of your state, you are covered regardless of where you drive within the United States. If you leave state lines and drive into a state where the insurance requirements are higher, your policy will automatically adjust to cover those higher requirements. On the other hand, if you drive to a state where the insurance requirements are lower, your policy will not decrease; rather, it will stay at the coverage requirement of your home state.
Although you can legally drive your vehicle once you meet your state’s insurance requirements, you may want to consider additional coverage. If you cause a collision that exceeds your coverage, you may have to pay out-of-pocket for any additional expenses caused by the accident. Additional policies can also help protect you against flooding, theft, and vandalism. On the other hand, if you own a very old or inexpensive car, you may be better off sticking to your state’s minimum requirements. Visit our Policy Guide to learn more about different types of coverage.