In the United States, all automobiles are required by law to carry an automobile insurance policy while on the road. Although laws vary from state to state, all require car owners to have Minimum Liability Insurance, and failure to comply with this requirement may result in fines or even suspension of the driver’s license. There are many types of auto insurance in the U.S., with semi- and full coverage being the most common types of insurance. Next, Tiger will take you to understand the specifics of half and full coverage auto insurance in the United States.
I. What is semi-insurance and full insurance?
Semi, also known as Liability Insurance, is the most basic form of automobile insurance. It is used to pay for property damage and bodily injury costs of the other party in an automobile accident. It’s important to note that this insurance typically does not cover the cost of your property and personal injury damages. Specifically, semi-insurance includes:
1. Property Damage Liability: If you are found to be at fault in an accident, this insurance policy will cover the cost of repairing or replacing the other party’s property, including vehicles, fences, buildings, and signals, according to the terms of the policy.
2. Bodily Injury Liability (BIL): If you are found to be at fault in an accident, this insurance policy will pay for the medical expenses, rehabilitation costs, and other related medical expenses of any person injured in the other vehicle, according to the terms of the policy.
The Minimum Liability Limit varies from state to state in the U.S., but is generally between $10,000 and $50,000.
Take New York State, for example:
Minimum $10,000 for property damage caused by a single accident.
25,000 for single person bodily injury and $50,000 for death.
Minimum $50,000 for multiple bodily injury and $100,000 for death.
It is important to note that insurance companies generally pay a maximum of $100,000 to $500,000 for liability coverage. If an accident occurs and the maximum insurance coverage is not enough to pay the full compensation, you will have to pay the difference out of your own pocket. Therefore, Tiger suggests you to decide the maximum benefit amount according to your own property.
Full Coverage Insurance is a more comprehensive type of auto insurance. It is used to pay for property damage and bodily injury costs for you and the other party after a vehicle accident. Specifically, full coverage insurance must be included:
- Liability Insurance: If you are found to be at fault in an accident, this insurance will pay for the cost of repairing or replacing the other party’s property and related medical expenses, according to the terms of the policy.
- Collision Coverage: If your vehicle is damaged or destroyed in an accident with another vehicle, regardless of who is at fault, this coverage will pay for the cost of repairing or replacing the vehicle for both you and the other party, according to the terms of the policy.
- Comprehensive Coverage: This coverage is designed to protect your vehicle against a wide range of non-collision damages or risks, with claims paid according to specific terms. Common causes of claims include fire, theft, natural disasters, falling objects, animal collisions, and malicious damage by others.
In addition to these three, car owners can also choose their own additional insurance. Common additional insurances include:
Medical Payments Coverage: This coverage will pay for medical related expenses incurred by you and your passengers in a car accident, such as ambulance fees, surgical procedures, prescription drugs, medical imaging, funeral expenses, etc., according to the terms of the policy. Medical payments insurance provides compensation regardless of who is responsible for the accident. Typically with this coverage, the insurance company will pay for the medical expenses directly without you having to pay a deductible or make an advance payment.
Uninsured/Underinsured Motorist Coverage: This coverage is used to protect against a vehicle accident where the other driver is at fault but is uninsured or underinsured.
Personal Injury Protection (PIP): This coverage pays for medical, lost wages, funeral and other expenses incurred by you and your passengers in a car accident, regardless of who is responsible for the accident. In the United States, sixteen states are mandatory for car owners to purchase this insurance, Tiger suggests that you consult the specific requirements in time when shopping for this insurance content.
Rental Reimbursement: This insurance is used to compensate for the cost of renting a car after an accident due to the need to repair the car, regardless of who is responsible for the accident. This type of insurance usually has a daily or per-accident maximum limit. You can choose different limits when purchasing your insurance, depending on your needs and budget.
Emergency Road Assistance Service (ERAS): This insurance is used in the event that your vehicle breaks down or becomes inoperable, the insurance company will pay for emergency services according to the terms and conditions, such as on-site repair and towing services for the owner of the broken down vehicle.
Note: All provisions of general liability insurance do not pay for the insured’s own damages. If the liability is on the other party, the other party’s liability insurance pays for you. If you are responsible, then your bodily injury and property damage will be covered by Medical Payments Coverage, Collision or Comprehensive, or your own medical insurance may be able to intervene (depending on your medical insurance). If you do not have auto insurance or medical insurance, you will have to pay for your own medical care.
II Which one should I choose, half or full coverage?
Choosing the right half and full coverage U.S. auto insurance for you depends on your personal needs, vehicle value, financial situation, and risk tolerance. Here are a few steps to help you make a better choice of the type of auto insurance you want:
Check Legal Requirements and Minimum Requirements: you need to know the legal requirements for auto insurance in your state. Each state has different legal requirements; some states only require car owners to purchase minimum liability insurance, while others require broader coverage auto insurance.
Check for Loan and Lease Requirements: If you have a loan or lease on your car, your lender or lessor will likely require you to purchase full coverage insurance. This is because they want to make sure the car is protected in the event of an accident.
Assessing the value of your vehicle: If your car is new or has a high value, it is more appropriate to purchase full coverage. This is because the cost of repairing or replacing your car in the event of an accident can be high. If your vehicle is more than ten years old, cheaper or used, semi-insurance may be more appropriate. This is because it will be cheaper to repair or replace car parts in the event of an accident.
Evaluate your personal situation and risk tolerance: If you are an experienced driver and can afford to pay for the damage to your vehicle, you can save a lot of money on your premiums by choosing semi-insurance. If you are new to driving or feel you cannot afford the costs associated with vehicle repair or replacement, full coverage may be more appropriate for you.
Frequency of Vehicle Use: If you drive frequently and drive in areas with poor road conditions, full coverage can provide more comprehensive protection. If you drive short distances and less frequently, and the roads in your driving area are in good condition, you will save a lot of money by choosing semi-permanent insurance.
Consult a professional: You can contact Tiger Tiger’s customer service to ask about auto insurance, Tiger Tiger will provide you with personalized advice and help you choose the right type of insurance and coverage.
If you want to learn more about auto insurance related content, check out our auto insurance blog posts. Tiger Tiger provides detailed information on the factors that affect the price of auto insurance , what to consider when buying auto insurance, ways to reduce the cost of auto insurance, and the US auto insurance vocabulary section!
