Is Car Insurance Always Required?

You’ve certainly heard how important having car insurance is, but it might seem unnecessary if your car isn’t particularly valuable. When you’re unsure of your area’s specific requirements, you might be confused about whether you need coverage and how much.

So, is car insurance always required, or can it be skipped if you’ve got a car that’s barely worth the gas money you put into it? We're here to help you answer these questions, and an independent insurance agent can help you get set up with the right policy for your vehicle. But first, here's a deep dive into why you really do need car insurance in most, if not all, circumstances.

Is Car Insurance Necessary Even If My Car Is a Junker?

That’s a legitimate question, but the answer is still yes, at least from a liability standpoint. You are legally obligated to pay if you cause damage to someone else’s vehicle or other property or cause them injury with your car. That’s why your state may require you to have a minimum amount of liability insurance to cover damage you do with your car.

However, you're usually not required to have coverage for damage to your own car, like comprehensive insurance and collision insurance. If your car is a junker and has no cash value if it gets totaled, it’s up to you to decide whether paying for comprehensive or collision coverage is worth it. But you'll most likely need to have liability coverage for your vehicle, no matter what.

Which States Have Minimum Car Insurance Requirements, and What Are They?

Nearly every state requires drivers to purchase bodily injury and property damage liability insurance at a minimum. Before you ever buy or lease a vehicle, you should be familiar with the exact car insurance requirements by state. There are only a couple of states that don't require both types of auto liability insurance by law:

Florida: The state of Florida only requires property damage liability coverage and personal injury protection (PIP) coverage.
New Hampshire: New Hampshire is the only state that does not require drivers to purchase car insurance, but if you register a vehicle in the state, you must either purchase insurance or prove you can satisfy the state’s financial responsibility requirements if you cause an accident. You might also be required to have car insurance if you've been convicted of a DUI or other driving offenses.

A local independent insurance agent can help you learn more about your state’s minimum auto insurance requirements. Your state may require you to have uninsured/underinsured motorist coverage or personal injury protection coverage, for example.

What Is Bodily Injury Liability Coverage?

Standard auto insurance policies provide two types of important liability coverage. The first is bodily injury liability coverage, which can pay for costs stemming from injuries or death that result from you or another driver on your policy driving your car. Remember, your liability coverage doesn't cover injuries to you or any passengers in your car. That would be covered under medical payments coverage or personal injury protection.

The bodily injury liability portion of your auto insurance policy reimburses injured parties for their medical treatment, ambulance rides, and other expenses related to the accident. Injuries can be expensive, so having bodily injury liability coverage is crucial.

What Is Property Damage Liability Coverage?

The other type of liability coverage provided by standard auto insurance policies is property damage liability coverage, which can pay for costs associated with damage you or another person driving your car inflicts to property, such as buildings, fences, mailboxes, etc., or other vehicles.

This coverage reimburses the owner of the damaged property for repairs or replacements. Property damage liability coverage is also critical for all drivers on the road to carry, regardless of the value of their personal vehicles.

What Are Some Common Damage Claims That Car Insurance Can Cover?

Your car insurance can help you with more than you think, especially if you buy more than the state-mandated liability protection. Here are just a few ways your car insurance can help you pay for damage to your vehicle:

Collision with another vehicle: While your liability coverage pays for damage you’ve caused to other vehicles or property, your collision coverage protects your own car if you hit another vehicle.
Hitting a tree: Your collision coverage also kicks in if you collide with a stationary object like a tree or a fence post.
Hitting a large animal: Animal collisions, such as those with deer, are very common. Since these are technically not considered vehicular or object collisions by your car insurance company, your comprehensive coverage can help cover the damage to your vehicle, not your collision coverage.
Damaged windshield: Windshields can be chipped or cracked by all kinds of things, including driving behind a truck on the freeway and getting hit by a rock. Having comprehensive auto insurance can protect you in these instances.
Parking lot damage: If your car sustains a mysterious door-ding or is hit by an errant shopping cart while parked, your collision coverage can help you cover the damage.
Hail damage: Hail can damage vehicles and even destroy windshields during severe storms. If you live in an area prone to hailstorms, you’ll want comprehensive coverage to protect your vehicle.
Vandalism: Cars can be vandalized in many ways, including by being keyed, tagged, having the tires slashed, or being broken into. Once again, the damage would be covered under comprehensive auto insurance.
Theft: If your car is stolen, your comprehensive coverage can reimburse you for the car's replacement value.

Your independent insurance agent can provide more real-life examples of why it’s imperative to have the right auto insurance coverage before you even hit the road.

Does My Car Insurance Cover Rental Cars or RV Road Trips?

You can buy optional rental reimbursement coverage. It covers the cost of a rental car if your vehicle is damaged, and you must rent a vehicle while it's undergoing repairs.

If you rent a car when you go on a trip, your auto insurance policy likely extends coverage to any cars you rent, along with your personal vehicle. Your collision coverage applies to damage you cause to any car you’re driving after you’ve paid your deductible. Your comprehensive coverage should apply to any vehicle you’re driving, as well, if it is damaged by a fire, theft, vandalism, or some “other than collision” event, again after the deductible.

If you cause an accident, your liability insurance should pay for damages to someone else’s vehicle or injuries to others, even if you’re driving a rental car. However, it’s always important to read your personal auto policy to know how or if it covers rental cars. Your independent insurance agent can help you review your policy.

As for rented RVs, those can get tricky. Your car insurance covers the liability portion or the damage you do with the RV, but most likely not the damage you do to it. You would need to sign a loss damage waiver when renting the RV and purchase additional coverage from the rental company to protect yourself from crashing or otherwise damaging the vehicle.

What Are the Risks If I Don’t Have Car Insurance?

Without car insurance, you’d be stuck paying out of your pocket for accidents and other vehicle damage expenses. If you rear-end another driver, seriously damage their car, and injure the driver, you’d be on the hook for the cost to repair their vehicle and their medical bills. Further, you could even be sued for additional damages and have to pay for attorney fees and potentially a larger financial payout.

Car insurance is important to protect your vehicle against other threats, too, like severe weather, vandalism, theft, or falling objects. Without the right coverage, you might have to pay to repair or replace your car out of your own pocket if it’s damaged. Work with a local independent insurance agent to get your vehicle properly protected against all kinds of threats.

Here's How an Independent Insurance Agent Can Help You Get the Best Car Insurance

When it comes to answering your important questions about car insurance and other types of personal insurance, no one’s better suited to help than an independent insurance agent in your area. Independent insurance agents can get quotes from multiple car insurance companies and walk you through them to help you choose the best coverage for your needs and budget.

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