Other Drivers and Your Car's Auto Insurance Coverage

The liability coverage contained in your auto insurance policy insures you, your spouse, family members, and anyone else who uses your auto. As long as the driver of your car has your permission, he/she is covered by your car insurance.

The amount of liability coverage you select determines how much the car insurance company will pay you in the event of an accident.

State Requirements for Auto Insurance Coverage

New Hampshire and Wisconsin are the only U.S. states that do not require liability car insurance coverage; however, these states do have financial responsibility laws.

These laws require car owners to have the assets necessary to cover any claims that are their fault. If you take out a loan to pay for your auto, the loan company may require collision and comprehensive auto insurance, even if your state of residence does not. Find out what your state requires and get a car insurance quote online.

What is Covered by Your Car's Auto Insurance

What is covered by your car insurance policy is entirely up to you. Once you have fulfilled the minimum state requirements for liability coverage in your auto insurance policy, you can tailor the remainder of your policy to fit your specific needs.

For private passenger autos, car owners can select coverage for the car;

* Coverage against collisions;
* Coverage for damage to your car from outside sources;
* Coverage against damage from uninsured or underinsured motorists;
* Coverage for medical payments for yourself and your passengers.

Find out what your state requires and get a car insurance quote online.

Auto Insurance and the Older Car

Most states require car owners to have auto insurance with a minimum amount of liability coverage. This insures that victims of an auto accident will receive financial compensation for personal injury and damage to their car when the collision is caused by another driver.

If your car is older and has low market value, you may choose not to purchase comprehensive or collision coverage from your car insurance company, since the cost to repair an older car can often be more than the car's market value.

Auto Insurance and the Leased Car

Leased autos are required to have car insurance coverage. The company that is financing your lease -- either the auto dealer or your bank -- will require comprehensive insurance and collision coverage in addition to any coverage required by your state of residence.

Drivers of leased cars may also be required to have gap insurance, a cost that is often rolled into their lease payment. This insurance covers the leased car in the event of an accident that totals the vehicle. The totaled amount issued by the auto insurance company may be less than the amount the driver owes the auto dealer or bank for the auto, and gap insurance covers the difference.