How Does Car Insurance Work in My State?

(Get your answers from an expert and find the coverage you need.)
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Q: How does car insurance work? Does it vary by state? 

A: Now, the first thing that I would say about car insurance is that every state is different. Every state mandates different coverages, whether you have to purchase insurance before you're able to get your license plates. There are a lot of different regulations. So, I would encourage you, for specific questions about your state, to contact a licensed insurance professional. We have a whole directory here at that will help you answer your very specific questions.

But on a high level, car insurance has four major components: at-fault liability, personal injury protection, uninsured motorist coverage and physical damage. The two that most people think about when they consider car insurance is first, at-fault liability. So, you get into an accident, you damage someone's car or you give bodily injury to somebody, somebody gets hurt and your auto insurance policy pays for that. The other is physical damage coverage, known technically as comprehensive and collision. Most people call these full coverage. What these do is protect your car in the event that you get into an accident and there's damage. If you slide off the road and you hit a tree, your physical damage coverage will provide for a replacement or fix any damage.

The other two lesser-known are personal injury protection which provides medical reimbursement and sometimes up-front payments for bodily injury damage to people inside your car. Every state handles this a little bit differently but, understand, that's the coverage that's providing medical payments for people inside the car. The last is uninsured motorist. This would be if someone who hits you either doesn't have insurance or doesn't have enough insurance. This coverage would actually provide for your damages. Your policy can pay for your own damages if the other person doesn't have enough.

In a nutshell, this is very high level and I would always encourage you to contact a licensed insurance professional. Find someone that understands auto insurance in your state and ask them your very specific questions and make sure that you have the proper coverage at the most competitive rate.

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