In all U.S. states, the law says you’re financially responsible for damages you cause when you’re behind the wheel. Every state except one requires you to carry auto liability insurance as proof that you can pay for those driving mishaps. The amount of liability coverage you need and whether you’re subject to any extra insurance requirements vary by state.
Here’s a look at which coverage is required by law in each state.
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How each type of coverage works
Mandatory coverages in your state may include bodily injury liability, property damage liability, uninsured or underinsured motorist coverage, personal injury protection, medical payments coverage, or some combination of these. Let’s walk through how each of these coverages works.
Learn more: What is no-fault car insurance and how does it work?
Bodily injury liability
Bodily injury liability insurance protects you financially if you’re found responsible for an accident, and the other driver or one of their passengers is injured. This insurance can cover the injured party’s healthcare costs, lost wages, or legal counsel if you’re sued after an accident. It can also cover funeral costs.
Learn more: What is liability car insurance and how much do you need?
Property damage liability
Property damage liability insurance protects you financially if you’re at fault in an accident and the other driver’s vehicle needs repairs. It can also pay to repair other objects you hit, such as a fence or mailbox.
Bodily injury and property damage liability are often bundled together, with the coverage limits listed as a series of three numbers. For example, a 25/50/25 policy provides $25,000 in bodily injury protection per person, $50,000 in bodily injury protection per accident, and $25,000 in property damage liability protection per accident.
Uninsured/underinsured motorist coverage
If you’re involved in an accident with an at-fault driver who doesn’t have enough insurance to cover your vehicle repairs or health care costs, uninsured/underinsured motorist (UIM) coverage helps close the gap. Many states require insurance companies to offer UIM coverage, but you can usually sign a waiver to drop or reduce the coverage.
Uninsured/underinsured motorist coverage is generally broken down into two parts, similar to liability insurance:
It can pay for your medical bills and those of your passengers, as well as repairs to your car after an accident. A few states, such as South Carolina and Texas, may require policyholders to pay a small deductible on UIM claims.
Personal injury protection (PIP)
If you live in a no-fault auto insurance state, you may need personal injury protection (PIP) coverage, also called no-fault insurance. PIP covers medical bills and injury-related costs for you and your passengers, regardless of who caused the accident. If you or your passengers are unable to work or perform daily duties due to injury, PIP may reimburse lost wages and the costs of essential services like childcare and housekeeping.
Medical payments coverage
Medical payments coverage, also called medical expense or MedPay, is typically available in at-fault states, also known as tort states. It works like PIP, but the coverage is limited to medical expenses. MedPay does not reimburse lost wages or essential services costs.
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States that don’t require car insurance
Some form of car insurance is required in all U.S. states except New Hampshire. While New Hampshire drivers don’t have to carry insurance, they must prove their financial capacity if they cause an accident — or risk a license suspension. Because insurance is an easy way to prove that capacity, many drivers opt to have it.
Florida and New Jersey, which are no-fault states, don’t require bodily injury liability insurance but do mandate property damage liability coverage and personal injury protection (PIP) coverage.
Minimum car insurance FAQs
How much does minimum coverage cost?
Minimum auto insurance coverage varies in price based on several factors, including the insurance company you choose, your location, the type of car you drive, your driving record, and more. The average cost of a liability-only policy ranges from $89 to $133 per month. But that cost could be lower or higher depending on the factors mentioned.
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Should I get minimum or full-coverage car insurance?
If your car is financed, your lender likely requires you to have full-coverage car insurance. That typically involves liability, comprehensive, and collision. Comprehensive and collision pay to repair your vehicle in different situations when the accident was your fault or there isn’t another at-fault driver.
When you have the option to carry minimum coverage, make the decision based on your car’s value relative to the cost of coverage. If the car is only worth a few thousand bucks, it may not make sense to pay $500 a year for auto insurance.
What happens if I don’t have insurance?
Driving without adequate car insurance is illegal in most U.S. states and could result in hefty fines. Car insurance also provides valuable financial protection if you’re in an accident., and iIf you don’t have a policy, you could end up paying significant expenses out of pocket.
If you get caught driving without insurance, your state may require an SR-22. This is a certificate of financial responsibility your insurance company files with the state on your behalf. Since an SR-22 filing is prompted by serious driving infractions, it considers you as a high-risk driver and your insurance costs will rise accordingly.
Why do states require auto insurance?
States require auto insurance to ensure that drivers can pay for the damages they cause. Without insurance, accident victims could bear the brunt of expenses. Without auto liability laws and insurance requirements, more accidents would likely result in lawsuits as victims pursue financial relief for their accident-related damages and injuries.
Is 30/60/25 coverage enough?
30/60/25 insurance provides $30,000 in bodily injury protection per person, $60,000 in bodily injury protection per accident, and $25,000 in property damage protection. Whether this is enough depends on your state’s requirements and your financial circumstances. Some states, including Maine, Michigan, and North Carolina, require higher coverage limits. You might also need to carry higher limits if you have a lot of assets that would be subject to seizure after a lawsuit.
What is the cheapest state to insure your car?
Maine, New Hampshire, and Hawaii are among the cheapest states to insure your car.
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