Basic personal auto insurance is mandated by most states, including Ohio, and provides you with financial protection in case of a crash. But is it enough? What are the options? Learn how car insurance works and what types of coverage are available.

Understanding auto insurance—the basics

Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of a crash or theft. In exchange for you paying a premium, the insurance company agrees to pay your losses as outlined in your policy.

Auto insurance provides coverage for:

• Property – such as damage to or theft of your vehicle
• Liability – your legal responsibility to others for bodily injury or property damage
• Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses

Basic personal auto insurance is mandated by most U.S. states, and laws vary. Auto insurance coverages are priced individually (a la carte) to let you customize coverage amounts to suit your exact needs and budget.

Policies are generally issued for six-month or one-year timeframes and are renewable. The insurance company sends a notice when it’s time to renew the policy and pay your premium.

What type of auto insurance is required in Ohio?

In Ohio, it is illegal to drive any motor vehicle without insurance or other proof of financial responsibility. You can meet this requirement by obtaining auto insurance and the required auto liability policy which includes bodily injury liability coverage as well as property damage liability coverage. This is the most common way to meet Ohio’s auto insurance requirement. 

Bodily Injury Liability Coverage: If you’re at fault for a crash that injures another person, bodily injury liability coverage helps pay for their medical expenses. Ohio’s required minimum coverage is $25,000 per person injured in any one incident, and $50,000 for all persons injured in any one incident.

Property Damage Liability Coverage: If you cause a crash that damages someone else’s property (their car, for example), property damage liability coverage helps pay for repairs. Ohio’s required minimum coverage is $25,000 for injury to or destruction of property of others in any one incident.

Other ways to meet Ohio’s auto insurance requirement include obtaining a certificate or filing a bond with the Ohio Bureau of Motor Vehicles (BMV) indicating that money or government bonds in the amount of $30,000 is on deposit with the Treasurer of the State; or obtaining a certificate of self-insurance if you have more than 25 vehicles registered in your name.

Examples of times you may need to show financial responsibility include:

• You are involved in a vehicle crash
• You are charged with a serious traffic offense that requires a court appearance
• You are stopped for a traffic violation
• You are stopped for a vehicle safety check 

The penalties for FR law violation depend on the number of offenses you have within a five-year period. Violator penalties could include a 90-day to two-year license suspension and reinstatement fees ranging from $125—$550, in addition to paying for at-fault damages.

Who is covered by my auto insurance—and under what circumstances?

Generally, your car insurance will cover other occasional drivers. However, if other drivers live with you and use your car—whether a spouse, a teen driver or a house mate—they should be listed on your policy.

Your personal auto policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. It will not provide coverage if you use your car for purposes in which you get paid—for instance, if you deliver pizzas. For his, you need commercial insurance.

Personal auto insurance will not provide coverage if you use your car to provide transportation to others through a ride-sharing service. For this, many auto insurers are now offering supplemental rideshare insurance products (at additional cost) that extend coverage for vehicle owners providing ride-sharing services.

What other types of auto insurance coverage are common?

While most basic, legally mandated auto insurance covers the damage your car causes, it does not cover damage to your own car or certain medical expenses. Consider these optional coverages:

• Collision helps pay to repair or replace your car if it’s damaged in a collision with another vehicle or object, such as a tree, guardrail, or fence, when you’re at fault.
• Comprehensive helps pay to repair or replace your vehicle if it’s stolen or damaged in an incident that’s not a collision. This includes theft, natural disasters (like a hurricane or tornado), falling rocks or trees, and fire.
• Medical Payments helps pay for medical, hospital, or funeral expenses for you and others injured or killed while riding in your car, regardless of fault. It also covers you and your family members if struck by a car as a pedestrian or if riding in another car.
• Uninsured Motorists helps pay for expenses including medical expensed and loss of wages, when a collision is caused by a driver who does not have auto insurance—or in the case of a hit-and-run.
• Underinsured Motorists helps cover costs when another driver lacks adequate coverage. This coverage pays for injury expenses to you or occupants of your vehicle when the other person’s insurance is inadequate and fills the gap in protection between the at-fault driver’s bodily injury liability coverage and your UIM coverage.