The purpose of this report is to help the consumer get a better understanding about auto insurance before comparing quotes online or contacting a local company or agent. Within, we include information about each states auto insurance laws. For example, NJ requires drivers to have 3 types of insurance coverage. Readers can also learn more about the following topics including: understanding auto insurance coverages, how much coverage to buy and which are the highest rated auto ins providers. According to NAIC, the National Association of Insurance Commissioners: "To get the best value for your money, you must take responsibility for your auto insurance purchase and make your own decision."

Table of Contents

  1. Introduction

  2. Factors that Effect Auto Insurance Rates

  3. Auto Insurance Laws by State

  4. Understanding Car Insurance Coverages

  5. How much Coverage do you Need?

  6. Online Car Insurance Quotes - Safety Tips

  7. How to get an Affordable Car Insurance Quote?

  8. List of Auto Insurance Companies

  9. Auto Insurance Providers - Review

  10. Most Expensive Automobile Insurance by Cities and States

  11. Classic Car Insurance

Introduction - Auto Insurance Review

There are over 100,000 car accidents each day, according to Kiplingers.com, making auto insurance a necessary evil. Like it or not most states require some amount of liablity insurance; however, for many drivers this low coverage dollar amount is not enough to adequately protect themselves and their assets, should an accident of which they are at fault occur. Factors for consumers to consider when comparing auto insurance rates and quotes are: how much coverage to buy and how best to take advantage of auto policy discounts. If buying insurance online consumers are advised to shop smartly, compare quotes and be educated about their chosen insurance company, before deciding. Because the auto insurance industry is not federally regulated, each state does its' own. The Department of Insurance is a state run government agency that licenses and regulates the rates and practices of insurance companies, agents and brokers. This agency can protect consumers, and especially online, to let them know whether an insurance company is in fact licensed to do business in their state.

Factors that Effect Auto Insurance Rates

Insurance companies seek to get a fair representation of you, doing so by rating and evaluating the risk of insurance claims that you present. With a bevy of statistics and analysis at their side, insurers group individuals according to how they check out for a variety of factors. Factors that may weigh-in include:

  • Your Age
  • Your Gender
  • Your Marital status
  • Where you Live
  • Your Credit Rating
  • Type of Car you Drive
  • Your Driving History

It's not just teenage drivers who have higher insurance rates, men under 25 also tend to pay more because statistics show men have an increased number of accidents as compared to women in this demographic. Unfortunately, individuals can't do much about gender, age, where you live or marital status; but keeping your driving record clean by avoiding accidents and working to improve your credit score, even reviewing your automobile purchase before buying for "low theft rate" and "crash worthiness" can help lower your premium. Consider also the type of car you drive. Does it have safety device features such as anti-lock breaks daytime running lights and air bags? If you live in a high vehicle theft area consider putting in an anti-theft device like a car alarm.

Each year the Insurance Institute for Highway Safety conducts crashworthiness tests which serve insurance companies who use this data; as well as the safety conscious consumer looking to buy smart and safe, and also perhaps, save on auto insurance. Here are some of the top IIHS safety picks for 2008 automobiles:

  • Audi - A6, A3, A4
  • Acura - MDX, RDX
  • BMW - X3, X5
  • Ford - Taurus, Edge, Taurus X
  • Honda - Accord 4-door models, Odyssey, Element, Pilot, CR-V
  • Hyundai - Entourage, Santa Fe, Veracruz (Built after August 2007)
  • Kia - Sedona
  • Lincoln - MKX
  • Mercedes - M Class
  • Mercury - Sable
  • Saab - 9-3
  • Saturn - VUE (Built after December 2007)
  • Suburu - Legacy, Impreza, Tribeca, Forester
  • Volvo - S80, XC90, C70
  • Toyota - Highlander, Tundra,

Auto Insurance Laws by State

Find your state's existing requirements for auto insurance in Florida, NY, California…

The following chart shows the minimum auto insurance requirements by state, by type of insurance required, and by dollar amounts. Most states require some liability insurance, which is broken into bodily or property injury. The 3 numbers or split limits, noted in the minimum liability limits column, show coverage for bodily injury caused to another person, the second is for bodily injuries endured and the last is for property damages. For example, Alabama requires 20/40/10 which equals $20,000 for bodily injury caused, $40,000 for injuries sustained and $10,000 for property damages.

No fault coverage, required in some states, means that your auto policy must pay medical bills for injuries suffered in an auto accident regardless of who caused the accident.

Uninsured or underinsured motorist coverage, also required in some states, covers you in the event the other motorist involved in the accident has none or not enough liablity insurance. Be sure to confirm all requirements with your auto insurer as they may change at any time.

State
Liability Insurance Required?

Required Insurance Coverage
No Fault Coverage Required?
Uninsured Motorist Coverage Required?

Minimum Liability Limits

Alabama
YES

Bodily Injury and Property Damage Liability

NO
NO

20/40/10

Alaska
YES

Bodily Injury and Property Damage Liability
NO
NO

50/100/25

Arizona
YES

Bodily Injury and Property Damage Liability
NO
NO

15/30/10

Arkansas
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/25

California
YES

Bodily Injury and Property Damage Liability
NO
NO

15/30/5

Colorado
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
NO
NO

25/50/15

Connecticut
YES

Bodily Injury and Property Damage Liability, Uninsured and Underinsured Motorist
NO
YES

20/40/10

Delaware
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
NO
NO

15/30/5

D.C.
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
YES
YES

25/50/10

Florida
NO

Property Damage Liability, Personal Injury Protection
YES
NO

0/0/10

Georgia
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/25

Hawaii
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
YES
NO

20/40/10

Idaho
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/15

Illinois
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

20/40/15

Indiana
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/10

Iowa
YES

Bodily Injury and Property Damage Liability
NO
NO

20/40/15

Kansas
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
YES
YES

25/50/10

Kentucky
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
YES
NO

25/50/10

Lousiana
YES

Bodily Injury and Property Damage Liability
NO
NO

10/20/10

Maine
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist, UnderinsuredMotorist
NO
YES

50/100/25

Maryland
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection , Uninsured Motorist
NO
YES

20/40/10

Massachusetts
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
YES
YES

20/40/5

Michigan
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
YES
NO

20/40/10

Minnesota
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured and Underinsured Motorist
YES
YES

30/60/10

Mississippi
YES

Bodily Injury and Property Damage Liability
NO
NO

10/20/5

Missouri
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
NO

25/50/10

Montana
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/10

Nebraska
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/25

Nevada
YES

Bodily Injury and Property Damage Liability
NO
NO

15/30/10

New Hampshire
NO

Financial Responsibility Only, Underinsured Motorist
NO
YES

0/0/25

New Jersey
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
YES
YES

15/30/5

New Mexico
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/10

New York
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
YES
YES

25/50/10

North Carolina
YES

Bodily Injury and Property Damage Liability
NO
NO

30/60/25

North Dakota
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
YES
YES

25/50/25

Ohio
YES

Bodily Injury and Property Damage Liability
NO
NO

12.5/25/7.5

Oklahoma
YES

Bodily Injury and Property Damage Liability
NO
NO

10/20/10

Oregon
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection, Uninsured Motorist
NO
YES

25/50/10

Pennsylvannia
YES

Bodily Injury and Property Damage Liability, Medical Payments
YES
NO

15/30/5

Rhode Island
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

25/50/25

South Carolina
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

15/30/10

South Dakota
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

25/50/25

Tennessee
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/10

Texas
YES

Bodily Injury and Property Damage Liability
NO
NO

20/40/15

Utah
YES

Bodily Injury and Property Damage Liability, Personal Injury Protection
YES
NO

25/50/15

Vermont
YES

Bodily Injury and Property Damage Liability, Uninsured and Underinsured Motorist
NO
YES

25/50/10

Virginia
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

25/50/20

Washington
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/10

West Virginia
YES

Bodily Injury and Property Damage Liability, Uninsured Motorist
NO
YES

20/40/10

Wisconsin
NO

Financial Responsibility Only, Uninsured Motorist
NO
YES

0/0/10

Wyoming
YES

Bodily Injury and Property Damage Liability
NO
NO

25/50/20

Understanding Car Insurance and Coverage

Auto insurance is a contractual agreement between an insurance company and a policyholder. In exchange for an insurance policy, the insurance company promises to provide certain coverage such as:

  • 1. Bodily Injury Liability Coverage
  • 2. Property Damage Liability Coverage
  • 3. Uninsured Motorist Coverage
  • 4. Underinsured Motorist Coverage
  • 5. Collision Coverage
  • 6. Comprehensive Coverage
  • 7. Personal Insurance Protection
  • 8. Roadside Assist
  • 9. Rental Reimbursement

1. Bodily Injury (BI) - Protects you against financial loss when you are legally responsible for a car accident which causes death or injury to another individual. In addition, BI also covers you for legal costs involved in your defense for a covered suit including bail bond expenses and court costs. This coverage amount is a "Split Limit", such as $50,000/$100,000. The first number is the maximum limit provided for 1-injured person. The second number is the limit provided for two or more persons in any one accident or occurrence.

2. Property Damage Liability (PD) - Protects you against financial loss if you are found liable for damages to another person's property caused by your automobile.

3. Uninsured motorist coverage (UM) - This coverage pays for death or bodily injury caused by an uninsured driver. It can also cover a hit and run driver or cover an insured driver whose Bodily Injury Liability limits are not enough to cover the bodily injury losses incurred. UM covers you, your family members and other passengers in your vehicle.

4. Underinsured motorist coverage (UIM) - This coverage provides benefits for damages to your auto caused by an uninsured driver or an insured driver whose property damage liability limits are not enough to cover the property damage losses incurred.

5. Comprehensive Coverage (Other than Collision)- This coverage pays for your insured vehicle, up to the cash value, less the deductible amount as the result of damages caused by events. Events may include: fire, hail, windstorm, theft, glass breakage, riot, etc.

6. Collision Coverage - Collision coverage pays for physical damage to your vehicle caused by your vehicle colliding with an object, including another car or if it overturns.

7. Personal Injury Protection (PIP) - Some states require PIP and it is similar to No Fault Insurance. PIP coverage typically includes expanded coverage of accident-related medical costs. In a number of states, PIP also pays for lost wages and similar losses. Considering how expensive medical treatments are these days,

8. Roadside Assist (Towing and Labor Coverages) - Provides coverage if your vehicle becomes disabled, for towing costs and/or labor performed at the place of disablement.

9. Rental Reimbursement (Optional Transportation) - This coverage allows you to rent a substitute if your car becomes disabled due to a covered loss. This coverage pays the cost of the rental car up to your policy limit.

How Much Coverage do you Need?

Choose the level of liability insurance you need;
liability protects you if you are at fault in an accident

Besides the state required minimum liability insurance, each individual needs to carefully consider his/her needs when determining how much liability coverage to buy. Of course this type of thinking may not appeal to an individual looking for cheap auto insurance; keep in mind that the purpose of liability insurance is to protect you from being sued, if you are at fault, for your personal assets if you don't carry enough insurance. (Personal assets can include: income, home, retirement, savings)

Take a look at the following auto accident statistics reported in 2006 by the National Highway Transportation Safety Association:

  • 42,642 people were killed in car accidents
  • 5,973,000 (appx.) police reported motor vehicle traffic crashes
  • 2,575,000 people were injured
  • 4,189,000 crashes involved property damage only

Coverage Considerations:

1. Bodily Injury Liability Coverage (BI) - Buy enough to protect your assets. A recommendation from the Insurance Information Institute (I.I.I.) is that you have $100,000 of bodily injury protection per person and $300,000 per accident. Another suggestion by the I.I.I, is that if your net worth is more than $300,000, to consider buying additional liability protection, such as an umbrella policy. Here are some common BI choices:

  • $50,000/$100,000
  • $100,000/$300,000
  • $250,000/$500,000

2. Property Damage Liability Coverage (PD liab) - Even though states like California, New Jersey and Pennsylvania require motorists to carry only a $5,000 minimum in Property Damage Liability, an individual carrying this little will be very underinsured when hitting a brand new Mercedes. Consider coverage in the amount of $50,000 or $100,000.

3. Uninsured Motorist Coverage (UM) - This coverage pays for death or bodily injury caused by an uninsured driver. It can also cover a hit and run driver or cover an insured driver whose Bodily Injury Liability limits are not enough to cover the bodily injury losses incurred. UM covers you, your family members and other passengers in your vehicle.

4. Underinsured Motorist Coverage (UIM) - This coverage provides benefits for damages to your automobile caused by an uninsured driver, or, an insured driver whose property damage liability limits are not enough to cover the property damage losses incurred.

5. Comprehensive and Collision Coverage - For these two coverages you don't choose how much to buy but you do decide on what deductible-amount to pay, typically between $250 and $1000. The reason you don't buy an amount is because these coverages are determined by the market value of your car and the cost to repair it. If you want to save money on your premium, choose a higher deductible. However, make sure that you have enough money set aside in case you need to make a claim. What about if driving an old jalopy car? According to the I.I.I., "Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing this coverage may not be cost effective."

Online Car Insurance Quotes - Safety Tips

Safe guidelines to follow before purchasing a policy on the Internet

Shopping the Internet to buy auto insurance will soon become the norm. Today, large insurance companies, brokers and agents are staking-out online territory to compete for your business. And to your advantage, most companies offer free rate quotes which allows you to compare different company rates side by side. Learn more about getting safe online insurance quotes, Click Here.

How to get an Affordable Car Insurance Quote?

Did you know that insurance companies charge different rates for the exact same coverage on the exact same vehicle? It's true! The National Underwriter's annual online quest found that rates varied by as much as $450 for a 6-month premium. This suggests that the consumer is better off pounding the internet pavement and comparing quotes from different companies. Another way to lower your rates is to shop for discounts. Discounts can include:

  • Anti Theft Discount
  • Anti Lock Brake Discount
  • Good Student Discount
  • Senior Defensive Driver Discount
  • Multi-Car Discount
  • Multi-Policy Discount
  • Professional Group Discount
  • Electronic Funds Transfer
  • Alternative Fuel Discount

Following that, you will want to know whether this particular insurance company is:

  • (1) Licensed to sell insurance in your state
  • (2) Has a reputation for having good customer service and paying claims

List of Top Auto Insurance Companies:

Company Name

Home Office Located In:

 

21st Century

 

 

AAA

 

 

AARP

 

 

AIG

 

 

Allied

 

 

Allstate

 

 

American Family

 

 

Amica

 

 

Auto-Owners

 

 

Erie

 

 

Esurance

 

 

Farmers

 

 

Geico

 

 

GMAC

 

  

Liberty Mutual

 

  

Mercury

 

 

Nationwide

 

 

Progressive

 

 

Response

 

 

Safeco

 

 

State Farm

 

 

The HartFord

 

 

Travelers

 

 

Unitrin Direct

 

 

USAA

 

 

Auto Insurance Provider Review:

According to J.D. Power and Associates 2007 National Auto Insurance Study, auto insurance carriers are more likely to renew their policy if they have experienced "overall satisfaction" from their insurance company. J.D. Power's Auto Insurance Study measured several factors designed to interpret satisfaction. These included:

  • 1) overall satisfaction
  • 2) price and claims
  • 3) interaction
  • 4) policy offerings
  • 5) billing and payment

From this study, here are the best rated auto insurance providers:

  • #1 - Amica Mutual (8th year in a row)
  • #2 - Erie
  • #3 - GEICO
  • #4 - State Farm
  • #5 (It's a tie!) - American Family and Auto-Owners

Note:
USAA, like Amica Mutual, also received high marks in the following categories: overall satisfaction, price and claims, interaction, policy offerings, billing and payment. However, because this insurer provides auto insurance and financial services, only, to the US military community and their family, it wasn't included in the ranking order.
USAA Ranked #1 in Customer Service with BusinessWeek.

Want more Ratings?

To find out an Insurance companies' financial strength ratings visit: AM Best and Standard & Poor's

For example:

Esurance is rated 'A' (Excellent) by industry-leader A.M. Best
Geico is rated A++ (Superior) rating for financial stability

Drivers Living in High Traffic Urban Areas Pay Higher Rates

There is a price to pay when it comes to driving and owning a vehicle in a high density urban area like many of the cities throughout the United States. This can be seen in cities like New York, Detroit and Newark, New Jersey - rated as having some of the highest auto insurance premiums in the country.

According to the Insurance Institute for Highway Safety,"Crashes that cause injuries and property damage occur at the highest rates in urban areas." In addition; cities, versus rural areas, tend to have:

(A) Increased chance of vehicle theft
Here are the Top 10 Metropolitan areas with the highest vehicle theft in 2006. (Information from a study conducted by the National Insurance Crime Bureau, NICB):

  • (1) Las Vegas/Paradise, NV
  • (2) Stockton, CA
  • (3) Visalia-Porterville, CA
  • (4) Phoenix/Mesa/Scottsdale, AZ
  • (5) Modesto, CA
  • (6) Seattle/ Tacoma/ Bellevue, WA
  • (7) Sacramento/Arden/Arcade/Roseville, CA
  • (8) Fresno, CA
  • (9) Yakima, WA
  • (10) Tuscon, AZ
  • (Note: Auto Theft is covered under Comprehensive coverage)

(B) Increased chance of vandalism

(C) Greater incidence of fraud

(D) Higher density traffic
Here are the Top 10 Most Congested Cities:

  • (1) Los Angeles, CA
  • (2). San Francisco, CA
  • (3) Denver, CO
  • (4) Miami, FL
  • (5) Phoenix, AZ
  • (6) Chicago, IL
  • (7) San Jose, CA
  • (8) Washington, DC
  • (9) Portland, OR
  • (10) Boston, MA

City Auto Insurance Review:

New York City - In 2005, the average expenditure for a car insurance policyholder in New York state (which ranks the 3rd most expensive state in the country) was $1,122. Compared to the average annual premium in NYC in 2006, which was $3,430. Learn more about New York City Auto Insurance Insurance.

Scottsdale, Arizona - MoneyMagazine.com rates Scottsdale, Arizona in the top 10 for being one of the best small cities in which to live. However, in terms of vehicle theft, this city doesn't score as well.

Insurance for Classic Cars

Not what you might think, getting classic car insurance is very affordable. However, most insurers specializing in this type of auto insurance have standard requirements that classic car owners must adhere to in order to become insured. (More on this topic coming soon)

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