When you get a standard insurance policy for a vehicle you actually get a whole package of different insurance coverage types. And there's usually a certain degree of flexibility when it comes to modifying the list of coverages and the amounts each type has.
Yet, each and every states has its own laws in what concerns the least amount and selection of coverage a driver is required to carry. In some states you will have to provide proof of insurance coverage even when buying or registering your vehicle. So to make a long answer short, you will have to buy insurance coverage no matter how cheap your ride turns out.
Liability coverage is required in every state.
What liability coverage of any insurance policy does is protects you financially from any liability claims that may arise as a result of a car accident that caused the other party property damage or bodily injuries. There are mandatory minimums of this type of coverage set by state authorities individually, which vary from state to state significantly. However, these minimum amounts are never enough to provide full coverage in case of a serious accident, and of course it will be your wallet that will have to pay the difference. That's why insurance experts recommend getting a much higher amount of liability coverage in case you want to be adequately protected against any claims.
Some types of coverage are a must in certain states, while being only an option in others.
Such types of coverage are usually medical payments coverage and uninsured/underinsured motorist coverage. Medical payments coverage pays, as the title suggests, for any medical bills that you, your family members or passengers face after being injured in a car accident that involved the insured vehicle. Uninsured/underinsured motorist pays for the damage inflicted in an accident caused by a driver who has no car insurance or doesn't have the required amount of coverage. Deciding which type of coverage you need and what amount to get depends on your personal needs and situation on the road in your area. It's recommended to consult with your insurance agent concerning these questions.
Collision and comprehensive coverage is optional in simply all states.
The collision and comprehensive coverage in your car insurance policy pays for the damage inflicted to your car by causes other than actual car accidents. These may include natural disasters like fire, flood, earthquake, thunderstorm, or collision with animals and birds, This type of car insurance coverage also pays for theft. However this is where the value of your car plays a big part. In case of a used vehicle that costs less than $1,000 it's simply not feasible for you to have collision and comprehensive coverage because after the deductible is subtracted you'll be paid the actual value of the car (even if it's completely destroyed). And taking in account the premiums you'll have to pay each year this is not the best way to save on car insurance out there.
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