Is auto insurance mandatory, and what type of coverage is required?

Issue

Pre-2009 Law

 "Truth in Auto" Law

(policies issued or renewed after Nov. 1, 2009, unless otherwise noted)

New Law

(policies issued or renewed after Nov. 1, 2011)

Mandatory Insurance

One of the two states in the U.S. that does not require all drivers to carry insurance

All drivers required to carry auto insurance

(effective June 1, 2010)

Auto insurance is still mandatory

Minimum Liability Limits

Set in 1982, minimum liability limits were $25,000 (one person)/ $50,000 (per occurrence)/ $10,000 (property)

Minimum limits were increased to $50,000/$100,000/$15,000

$25,000/$50,000/$10,000

Uninsured Motorist (UM)

Mandatory coverage, with minimum limits of $25,000/$50,000

Mandatory coverage, with minimum limits of $100,000/$300,000

Still mandatory, but minimum limits were reduced to $25,000/$50,000

Underinsured Motorist (UIM)

Coverage was optional, and if chosen, required limits of at least $50,000/$100,000

Mandatory coverage, with minimum limits of $100,000/$300,000

Coverage is now optional, but if coverage is included, limits must be at least $50,000/$100,000

Definition of UIM coverage

Each company can create its own definition of what is considered an underinsured motor vehicle.

Underinsured motor vehicle was defined by statute and compared the negligent driver's liability limit with the amount of damages actually sustained by a victim

Revert to the Pre-2009 law allowing companies to define UIM however they want, often comparing the negligent driver's liability limit to the victim's UIM coverage with no respect for actual damages sustained

UM/UIM Umbrella Coverage

Companies were obligated to offer UM/UIM coverage on an umbrella policy but were not required to document consumer responses to the offer

Companies must still offer UM/UIM coverage on an umbrella policy, but consumers refusing the coverages must do so in writing

Companies no longer need to offer UM/UIM coverage on an umbrella policy

Med Pay

Optional, $1,000 minimum

Optional, $10,000 minimum

Optional, $1,000 minimum

Stacking

Consumers who own more than one policy were not allowed to access coverages from the additional policies

Consumers were able to access additional coverages from up to 3 UM/UIM policies

Stacking is no longer mandated by statute -- refer to your individual policy to see if stacking is allowed

Reducing Clauses

Companies are allowed to reduce your UM/UIM coverages to reflect the insurance carried by the other driver

Reducing clauses were prohibited. Consumers could access all of the UM/UIM coverage they paid for.

Revert to the Pre-2009 law, reducing clauses are permitted.

Hit and Run Coverage

Companies could deny claims where no physical contact occurred, even if there were witnesses to the accident

UM coverage was required to cover hit and run accidents even if no physical contact occurred, if there was evidence by an independent third party to the accident

If you are run off the road, or an accident is caused by a vehicle that does not make physical contact with you, the new "Phantom Motor Vehicle" law requires  several things for coverage to be considered:

1)      You must have a witness who can corroborate what happened, and the witness cannot have a claim as a result of the accident

2)      Within 72 hours of the accident, an accident report must be made to law enforcement

3)      Within 30 days, you must file a report with your insurance company under oath setting forth the facts of the case