Must-Have (Core) Insurance Coverage
Liability Coverage
Auto liability coverage is mandatory in most states. Drivers are legally required to purchase at least the minimum amount of liability coverage set by state law. Liability coverage has two components:
- Bodily injury liability may help pay for costs related to another person’s injuries if you cause an
- Property damage liability may help pay for damage you cause to another person’s property while
- Alaska requires minimum coverage of $50,000 for injury or death to one person, $100,000 for injury or death per accident, and $25,000 for property damage.
Collision Coverage
If you’re involved in a crash with another vehicle or hit an object such as a fence, collision coverage may help pay to repair or replace your car (up to its actual cash value, minus your deductible). Collision coverage is typically required by your vehicle’s leaseholder or lender.
Comprehensive Coverage
Comprehensive may help cover damage to your car from theft, fire, hail, or vandalism. If your car is damaged by a covered peril, comprehensive coverage may help pay to repair or replace your vehicle (up to the vehicle’s actual cash value). This coverage has a deductible, which is the amount you’ll pay out of pocket before your insurer reimburses you for a covered claim. Comprehensive coverage in Alaska is optional but highly recommended to protect your vehicle against dangers like animal collisions.
Uninsured/Underinsured Motorist (UM/UIM)
If you’re hit by a driver who doesn’t have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you’re hit by an underinsured driver, that means they have car insurance, but their liability limits aren’t enough to cover your resulting medical bills. In Alaska, insurance companies are legally required to offer UM/UIM coverage on auto policies. While it is not mandatory to purchase, it is highly recommended to protect against drivers without insurance or those who lack enough coverage to pay for your damages or medical bills.
How to Choose the Right Insurance for You
- Lender Requirements: If you’re financing or leasing, your lender will usually require you to have Liability, Collision, and Comprehensive
- State Requirements: To drive legally in Alaska, you must carry auto liability insurance that meets or exceeds:
- $50,000 for bodily injury or death per person
- $100,000 for bodily injury or death per accident
- $25,000 for property damage per accident
Liability coverage is the only strictly mandatory requirement. However, the State of Alaska is a "No Pay, No Play" state, meaning uninsured drivers have severely limited rights to sue for damages if they are involved in an accident.
- Personal Needs: Consider your budget, the level of risk you’re comfortable with, and whether you could afford to pay for repairs or a replacement yourself if you don’t have certain
- Deductibles: An auto insurance deductible is the out-of-pocket amount you agree to pay per claim before your insurance kicks in. In Alaska, deductibles only apply to Collision and Comprehensive coverages, with $500 being the standard baseline. Raising your deductible from $500 to $1,000 will lower your monthly premium but increases your personal financial risk in the event of a covered loss.
Extra: Medical Payments (MedPay) and Personal Injury Protection (PIPs)
These help with medical bills for you and your passengers after an accident, no matter who’s at fault. PIP can even help with lost wages or childcare if you’re hurt.
If you, your passengers, or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for the costs of the injuries. Covered costs may include hospital visits, surgery, X-rays, and more. Medical payments coverage is required in some states and optional in others.
Personal injury protection (PIP) is available only in some states. Like medical payments coverage, PIP may help pay for your medical expenses after an accident. In addition, PIP may also help cover other expenses incurred because of your injuries — for example, childcare expenses or lost income. Personal injury protection is required in some states and optional in other states where it’s available.