Car insurance quotes for basic and standard cover

Mandatory liability coverage

In all but three US states, it is a crime to drive on a public road unless you have a minimum liability car insurance policy in force. If you do not have a valid policy, this can result in a fine and, in some state, loss of your car. To avoid this potential penalty, most drivers buy either a basic or standard policy.

The basic policy is the minimum required to satisfy the law. This is expressed as three numbers showing the maximum amount payable to any one person injured in an accident where you are at fault, the total amount that can be claimed for medical expenses in any single accident, and the maximum payable for property damage. Because the majority of states have not adjusted these amounts to match inflation, they are low numbers and often not enough to cover the likely claims. This can leave you underinsured.

The standard policy offers more generous liability coverage and often includes an element of personal injury protection to pay your own medical expenses should you injure yourself.

Whether you opt for the basic or the standard will depend on your financial circumstances. If you have no significant assets and own an older vehicle, a basic policy may be sufficient. But if you have some savings and investments, buying at least a standard policy may be in your interests. The rule is that, if your policy does not have enough value, anyone injured can sue you to recover the balance. Obviously, it is uneconomic to sue you unless you have assets.

What is the relationship to other policies?

The general practice is for insurers to specialize in basic policies. If you do decide to buy a basic policy, this usually prevents you from buying collision, comprehensive or one of the other policies. If you buy a standard policy, you can not only adjust the amounts in the liability coverage, but buy any of the other policies on offer. As a general rule of thumb, it is sensible to have at least 100/300/100 in liability coverage. But, if medical costs keep rising, you should consider increasing either or both personal injury elements.

On most of the sites operated by the Insurance Commissioners, you will find an explanation of the local requirements for mandatory coverage and advice on when to buy a standard or better policy.