• What You Should Know About Applying for Auto Liability Coverage

    If you drive a car in the United States, you are required by law to have auto liability coverage insurance – regardless of which state you live in. Although the requirements for auto liability insurance coverage vary considerably state to state, every state requires similar types of liability coverage. So, continue reading to find out what common requirements for auto liability coverage are and how they affect you.

    Common Liability Coverage Requirements

    In exchange for allowing you the privilege of driving on your state’s roads and highways, your state requires that you maintain minimum levels of automobile liability insurance coverage. Liability car insurance coverage will pay for the medical expenses and car repair costs of other people involved in an accident where you are found to be at fault. It will not pay for repairing your vehicle or pay your medical expenses.

    The type of liability coverage required in all states must meet minimum state level requirements for two types of coverage: personal bodily injury coverage and property damage coverage. Your liability insurance policy must meet state minimum limit requirements for the amount of coverage for each person that is injured in an accident, the aggregate amount of coverage for all persons injured in a single accident as well as meet the minimum policy limit for damage repair expenses. While the minimum amounts vary, typical minimum coverage amounts range between $10,000 and $30,000 for each type of coverage.

    Also, all states will require that you purchase car insurance coverage from an insurance company that is licensed to sell insurance policies in that state. So, if you move to a different state, you will need to make sure that the company that provides your auto liability policy is licensed to do business in the new state that you move to. If they are not, you will need to find a company that is.

    Other Liability Car Insurance Requirements

    Many car insurance companies require that you provide proof of title before they will issue a liability auto insurance policy. If you are listed as the registered owner of a vehicle, and you are still making payments to a bank or auto lender, most insurance companies will refuse to write a liability policy for you. This is because most car loan lenders maintain actual title ownership of the vehicle as long as you are still making payments; so, insurance companies may be prohibited from issuing a liability policy when you’re not the true owner of the vehicle.

    Even if you are able to find an insurance company that will write you a liability insurance policy under these circumstances, the lien holder (or bank or lender that actually holds title to the vehicle) may in turn purchase a full coverage policy and simply add the cost of the policy to your car loan. You may not be aware of it, but you agreed to this when you signed the loan documents for your car loan. Your car loan lender does this in order to protect their investment and to make sure that they receive as much money as possible in the event that your car is totaled or damaged beyond repair.

    Switching your car insurance coverage from comprehensive collision coverage to auto liability coverage can save you hundreds of dollars each year. Here are some tips to help you find and apply for auto liability coverage.

    Make Sure the Car is Paid Off

    If you’re still making car payments to a bank or other car loan lender, don’t waste your time trying to apply for auto liability coverage. When you signed the loan documents for your car loan, you probably also agreed to maintain full coverage insurance on the vehicle for as long as you were making payments. If you switch your policy to liability coverage only, before the car is paid off, your car loan lender will probably purchase a full coverage policy for the vehicle and pass on the cost of the coverage to you. You will be required to pay these additional costs before the lender releases the car title.

    Call Your Current Insurance Company

    The easiest way to find auto liability coverage for your vehicle is to simply call the insurance company you are using now for full coverage. Simply tell your agent that you want to change cover coverage type from comprehensive collision to liability. The agent may try to talk you out of it because he/she receives higher commissions on full coverage policies; however, in the end your current car insurance company will be the easiest way to change your coverage type.

    Shop Online

    If you’re thinking of changing insurance companies, wait until it’s almost time to renew your policy and begin searching for new insurance companies on the Internet. Visit websites like Insweb.com to quickly shop for quotes from multiple insurance companies. Simply enter your personal information, information about your driving record as well as information about your car and click the submit button. You will receive several auto liability policy quotes from different companies within a day or two.