What Does a "Minimum Auto Insurance Requirement" Really Mean?

State government understands that uninsured drivers are just going to lead to a mess for the court system sooner or later. That's why every state has a minimum auto insurance requirement for all of its licensed drivers that has to be met before they're "allowed" to be out on the highways. But what does that requirement really mean? And what's local law enforcement going to do if you just don't have it?

As previously stated, a minimum auto insurance requirement is the minimum amount of insurance your state requires you to carry before you will be considered "insured". This minimum insurance requirement is usually stated in a/b/c terms (for example, 15/30/5). "a" represents the amount of bodily injury liability insurance you're required to have per person if you're in an accident. "b" is the amount of bodily injury liability insurance you have to have per accident, and "c" is the amount of property damage liability you have to have per accident.

If you're not familiar with those terms, liability auto insurance is the insurance that's going to take care of everyone else's expenses when you cause an accident (i.e. it picks up the tab for the car you hit). By establishing this minimum auto insurance requirement the state is making sure that their drivers are protected if they're ever in an accident and minimizing the amount of time drivers spend in court trying to pull a settlement out of an uninsured driver. That's a process that can drag on for years, especially with the cost of auto repair and medical care these days!

Bear in mind that having a minimum auto insurance requirement is kind of like saying you only have to have a shirt and shoes to walk into an establishment. You're going to want a little more than that! Minimum insurance requirements aren't going to do you a lot of good if you cause a ten car pile-up on I-95 that results in hundreds of thousands of dollars, and auto insurance companies know that. That's why they keep a list of state minimum requirements, but they're almost always going to recommend that you purchase more than that. Most experts recommend that you carry a minimum of $100,000 per person and $300,000 per accident in bodily injury liability and a minimum of $50,000 in property damage liability.

If you're caught driving without insurance, or the police investigate your coverage and realize that you are underinsured, you could be facing some pretty stiff consequences. You're definitely going to be paying some fines. How stiff they're going to be is going to depend on which state you live in. You also may lose your license and/or spend up to five years in jail. Any way you want to look at it, it's not going to be a good thing!

To break it down, what does minimum auto insurance requirement really mean? Your minimum auto insurance is the bare minimum of insurance coverage you need to get you by. It's a starting point, and smart and savvy insurance shoppers will treat it as such and keep their levels up higher where they can really keep them protected out on the highway.

By Michael F. McDonough