Auto Liability Insurance – What You Need to Know


Each state in the U.S. has restrictions for driving a vehicle.  Each state has a minimum auto insurance requirement.  All vehicles have to carry auto liability insurance.   Even if you don’t own a vehicle, you’re responsible for making sure the vehicle you drive has liability insurance.  Some states have computerized financial responsibility systems to verify if you have auto liability insurance. 

What is auto liability?

Auto liability provides bodily injury and property damage coverage to third parties in the event you cause an at fault accident.  Personal passenger type vehicles such as cars, trucks and sport utility vehicles are allowed to carry lower limits.  The minimum limit requirements vary from state to state.  Heavier vehicles such as buses, tractor trailers, and wreckers are required to carry higher limits.  

What is non-ownership auto liability?

You are responsible for making sure that the vehicle you drive has insurance, even if you’re driving someone else’s vehicle.  You can purchase a non-owner liability policy if you don’t own a vehicle and will be driving another person’s vehicle regularly.   If you drive an uninsured vehicle and don’t have your own insurance, you can’t use the excuse that you don’t own the vehicle.  You will still be held liable if you have an at-fault accident.  In addition, you will get a ticket for no insurance in a regular traffic stop. 

What is the purpose of a computerized financial responsibility system? 

The computerized financial responsibility system allows state and government agencies to view your auto liability information.  The system provides the insurance carrier, the vehicles insured, and the term of the auto liability policy.  In states where this system is utilized, you will get a ticket if the system doesn’t reflect that you’re insured at the time of a traffic stop or auto accident. 

What are the consequences of not carrying state minimum insurance?

If you don’t carry auto liability insurance, you are still liable for any at-fault accident you cause.  Bodily injury and property damage amounts are substantially higher than the annual premium of an auto liability policy.  If you get a ticket for no insurance, you have to pay a hefty fine.  In some states your license is suspended for a long period of time for driving without liability insurance. 

Each state has minimum auto liability insurance requirements.   The limits of liability vary from state to state.    You can purchase a non-owner liability policy, if you drive a car regularly that’s not insured.     Some states have a computerized financial responsibility system to view your auto liability information.  If you don’t have auto liability insurance on your vehicle, you’re responsible for damages resulting from any accident you cause. 

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