Which Auto Insurance Coverages Are Not Mandatory?

Acquiring auto insurance can be a tricky process. Depending on the state you live in, you may be required to purchase different types of coverage, including varying levels of liability insurance to no-fault coverage.

Aside from what’s mandatory from one state to another, there are some vehicles and types of coverage that are not required when purchasing auto insurance. Let’s take a closer look at what is mandatory and what is not.

What’s Mandatory in Auto Insurance?

For every state in the nation, with the exception of New Hampshire, carrying a liability insurance policy is required in order to operate a vehicle. A liability insurance policy typically requires that the driver assumes responsibility for another person’s vehicle, property and health if the driver causes the accident.

For instance, if you run into another person’s vehicle, you should already be carrying insurance to cover personal injuries and vehicle damage. If you don’t carry coverage, you are likely to face fines and pay for the expenses out-of-pocket.

Another type of coverage that is mandatory in some states is personal injury protection (PIP) or no-fault insurance. With this coverage, neither driver assumes financial responsibility in an accident. In addition to paying for the vehicle’s damages, this coverage will pay for medical expenses, wages lost and possibly even funeral expenses.

Also, you should know if you take out a bank loan on a vehicle, you will be required to carry full coverage (liability, comprehensive and collision insurance) until you’ve paid-off the vehicle and own the title.

What’s Not Required by Insurance?

Now let’s take a look at what is not considered mandatory insurance coverage. First, as long as you own your vehicle, you are not required to carry comprehensive or collision insurance, though it is recommended you do.

Medical coverage, rental reimbursements, towing and labor and other options are not mandatory either when purchasing auto insurance. While it doesn’t hurt to add these coverages, they are not required.

As for specific types of vehicles, you will always be required to carry liability insurance if you drive a car or truck. However, scooters, mopeds and other two- and three-wheelers may not require insurance, though it depends on your state. In order to find out, contact your local Department of Motor Vehicles (DMV). This way, you will know for sure that any vehicle you drive is covered completely according to state law.