What Is Covered By Basic Car Insurance?

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While shopping for car insurance, you might have come across terms like basic car insurance and full coverage auto insurance. But what exactly is included in basic car insurance and how does it compare to full coverage?

In this article, we will discuss basic car insurance coverage in each state and how much coverage you should actually purchase. Then, we will recommend some best car insurance providers based on extensive research into coverage, cost, and customer experience.

Use our tool below or call (844) 246-8209 to start comparing car insurance quotes:

 

 

In this article:

• What Is Basic Car Insurance?
• 6 Types Of Standard Car Insurance Coverage
• Understanding Your State’s Basic Car Insurance Requirements
• Special Cases With State Minimums
• Is Basic Car Insurance Enough?
• Our Recommendations For Car Insurance Providers

What Is Basic Car Insurance?

Basic car insurance is to the minimum amour of insurance coverage a driver needs to meet local and state laws. These insurance requirements vary from state to state. Many states only require bodily injury and property damage liability to cover injuries or damages you cause to others in the event of an auto accident.

Other types of car insurance include personal injury protection, medical payments, uninsured and underinsured motorist coverage, collision, and comprehensive insurance – although not all of these are required by state law.

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6 Types Of Standard Car Insurance Coverage

Each state has different definitions of the most basic auto insurance coverage required by motorists to make their car street legal. Before we delve into state minimums, let’s take a closer look at the six standard types of coverage that you will encounter:

Liability Insurance (BI/PD)

Liability car insurance is required in most states and can be split into bodily injury liability and property damage liability coverage.Bodily injury covers other drivers and their passengers in accidents that you cause. Property damage liability covers damages to other vehicles in accidents that you cause.After a major accident, you could be sued which would leave your home and savings vulnerable. It’s a good idea to get more than the minimum state requirements for liability coverage.

Personal Injury Protection Insurance (PIP)

This type of basic auto insurance pays for your injuries after an accident. The extent of PIP ranges but can include:

• Medical expenses 
• Lost wages
• Funeral costs

Medical Payments Coverage (MedPay)

MedPay is similar to PIP and optional in most states. It covers medical bills and can be used to supplement your health insurance. Health insurance would be used first to cover the cost of your injuries, then MedPay could come into play to cover the costs of deductibles and copays.

Uninsured and Underinsured Motorist Coverage (UM/UIM)

If you’re hit by an uninsured motorist, you’ll be thankful for this type of basic car insurance coverage. UM/UIM reimburses you when the person who hit you is uninsured or doesn’t have sufficient insurance to cover damages or a total loss.

UM/UIM will also cover you if you’re a victim of a hit-and-run by an uninsured or underinsured motorist.

Collision Insurance

Collision coverage takes care of damages to your car after a collision with a vehicle or another object like a tree. You can elect to add this onto a basic car insurance plan that you purchase. If you have a lease or loan on your car, this coverage might be required.

Comprehensive Insurance

Comprehensive car insurance will cover your losses due to theft or damage caused by something other than a collision like:

• Fires, earthquakes, windstorms, hails, floods
• Falling objects
• Missiles or explosions
• Vandalism or riots
• Animal damage, like colliding with a deer

If you feel like this type of coverage would be a good fit for you, you can add it onto the basic coverage plan that you purchase. If you have a lease or loan on your vehicle, this type of coverage might be required. 

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Understanding Your State’s Basic Car Insurance Requirements 

Each state has its own auto insurance laws, and it’s important to know what’s required in your location.

Typically numbers for BI/PD state minimums are written out in a format like this: 25/50/25. The first number represents the amount of bodily injury liability insurance required per person. The second represents bodily injury required per accident, and the last represents required property damage liability.

For example, if the BI/PD minimum coverage limits in your state are 25/50/25 this could be broken down into:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $25,000 property damage

BI/PD isn’t the only type of insurance requirement, but it is the most common. Your state may also require PIP, MedPay, or UM/UIM. Collision and comprehensive coverage are the only types of basic auto insurance not required in any state, but that doesn’t necessarily mean you should bypass those coverages.

Now that you understand the numbers and what each type of coverage means, look for your state in the list below to become familiar with your state’s basic car insurance requirements according to the Insurance Information Institute (III).

*In states without requirements for BI and/or PD, data represents the minimum amount motorists without insurance are responsible for in the case of an accident.

 

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Special Cases With State Minimums

There is no minimum car insurance coverage required by the state of New Hampshire. But if you’re a driver in New Hampshire without car insurance, you are required to be financially responsible. Being financially responsible means that you have to compensate for any injuries you cause as a result of your driving, and you are expected to cover the cost of any property damage you cause.

Similar to New Hampshire, Virginia motorists don’t necessarily need to buy a basic car insurance plan, but they still have minimum financial responsibility numbers. The laws there require that all drivers have a way to pay for injuries and/or property damage caused by an accident. The minimum car insurance limits available to comply with Virginia laws include:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $20,000 property damage

This means that without motorist insurance, you’re responsible to meet those minimum payment amounts out of pocket. Car insurance can help save you from out-of-pocket costs after an accident.

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Is Basic Car Insurance Enough?

As with most answers when it comes to car insurance questions, it depends. How much car insurance is enough for you?  When you’re deciding if basic auto insurance provides enough coverage for you and your family members, you’ll want to assess your tolerance for risk and your financial situation.

In many accident situations, state coverage is just enough to satisfy the legal requirements, but it’s not always enough to cover the cost to take care of yourself and the other people, vehicles, and property that could be involved in an accident.

Look at the coverage you already have, and ask yourself if you were involved in an accident with a motorist with the same coverage as you, would you be confident that their insurance was enough to pay for repair costs and your injuries?

Now, let’s up the ante. If you hit a Tesla, would you be comfortable with the amount your insurance does or does not cover for the cost of damages? What about a multi-car accident that you cause? State minimums for basic car insurance coverage might not cover all of the costs, leaving some to come out of your pocket. Because collision coverage isn’t required by any state, you would be left to pay to repair or replace your own car in an at-fault accident, too.

It’s recommended that you purchase more than just the minimum car insurance to protect yourself from the costs that come from unexpected accidents.

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Our Recommendations For Car Insurance Providers 

We reviewed the top car insurance companies in the nation – considering factors such as cost, coverage, and industry reputation – and Progressive and Geico were two that came out on top. If you’re looking for basic car insurance or something more comprehensive, we recommend getting a quote from both of these providers and comparing auto insurance policies.

Whenever you shop for car insurance, we recommend getting quotes from multiple providers so you can compare coverage and insurance rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.

Use our tool below or call our team at (844) 246-8209 to start comparing personalized car insurance quotes:

 

Progressive

We reviewed Progressive car insurance and found that this company is a great option for people in their 20s or with a DUI in their history looking for coverage. Progressive is one of the biggest auto insurance companies in the United States. It has thousands of positive reviews from satisfied customers and high ratings from top names in the auto industry like the Better Business Bureau (BBB) and AM Best.

When you buy auto insurance from Progressive, your options include the types of basic car insurance discussed above, as well as Progressive roadside assistance and towing services,  rental reimbursement, custom parts and equipment coverage, and rideshare coverage. Plus, Progressive has many money-saving features, including a deductible savings bank, bundling, usage-based insurance, and the Name Your Price^Ⓡ tool that quickly lets you find a plan to fit your budget.

To learn more, read our full Progressive insurance review.

 

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Geico

We’ve found that Geico auto insurance is a great insurance company option for students. Geico offers competitive rates and numerous discounts for car insurance. It has an A+ BBB rating, an AM Best financial strength rating of A++, and impressive scores in numerous J.D. Power studies. With those high marks and a variety of discounts, Geico is a strong contender for most drivers.

When you’re looking at insurance options from Geico, you’ll have your option of basic coverage as well as more comprehensive plans and add-ons like mechanical breakdown insurance.

To learn more, read our full Geico review.

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Methodology

In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

• Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
• Availability: We consider availability by state as well as exclusions for specific groups of drivers.
• Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
• Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
• Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
• Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.

 

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