Auto insurance is legally required in almost every state for drivers who own a vehicle or regularly drive one. Each state has minimum coverage requirements to protect drivers financially in the event of an accident.
Typically, a minimum coverage auto insurance policy includes bodily injury liability and property damage liability, but some states require additional types of coverage as well. Minimum coverage car insurance can be a way to save on insurance premiums, but it’s usually only available for vehicles without a loan or lease.
What insurance is required?
Almost all states have some form of auto insurance requirement. Some states allow drivers to meet minimum requirements through a bond, deposits, proof of self-insurance, or by holding an auto insurance policy. New Hampshire does not have a car insurance requirement unless drivers receive certain convictions that require them to carry an SR-22.
Below are the types of coverage typically required with minimum auto insurance:
- Personal injury liability (BI): If you cause an accident with another driver, liability insurance will help pay for medical costs related to the other driver’s injuries. It can also cover your legal costs if the other driver sues you for their losses.
- Property Damage (PD) Liability: Property damage liability insurance covers property damage you cause to others. For example, if you hit another driver, your property damage liability insurance would help pay for repairs to their vehicle.
- Uninsured/Underinsured Motorist (UM/UIM) Coverage: Uninsured and Underinsured Motorist Coverage provides financial protection in the event of an accident with a driver who is uninsured or does not have sufficient coverage to pay for your losses.
- Personal Injury Protection (PIP): Personal Injury Protection is a requirement in states that have no-fault laws. If you have an accident, PIP can pay your medical bills, lost wages, rehabilitation costs and related expenses, regardless of who caused the accident. This coverage can also be purchased in certain responsible states.
- Medical Payment Coverage (MedPay): Medical Payments coverage helps pay for your medical costs following an accident and is not as robust as PIP. It is available in non-PIP states and is considered optional coverage in most states. However, a few states require drivers to have medical coverage.
Although these types of coverage are often required at the state level, the minimum amount of coverage allowed per person per accident is different depending on your location. To find the exact minimum coverage requirements in your state, you can visit your state’s Department of Insurance website or contact your auto insurer.
Minimum auto insurance requirements in each state
Before deciding to purchase minimum coverage auto insurance to meet your state’s insurance requirements, it’s a good idea to review your state’s minimum requirements. Also remember that you can always purchase more cover than is required if you want additional financial protection. It’s a good idea to consider getting quotes for multiple levels of coverage before choosing the least auto insurance coverage available in your state to save on auto insurance premiums.
The chart below includes the minimum auto insurance requirements in all 50 states and Washington DC
|State||Civil liability for bodily injury and civil liability for material damage||UM/UIM, PIP and MedPay|
|Michigan||50/100/10||Six PIP options: minimum $50,000 for Medicaid insureds|
|New Hampshire||25/50/25||25/50 UM
|New Jersey||15/30/5*||15/30 UM/UIM
|New York||25/50/10||25/50 UM
|North Carolina||30/60/25||30/60/25 UM
|North Dakota||25/50/25||25/50 UM/UIM
|Caroline from the south||25/50/25||25/50/25 UM|
|South Dakota||25/50/25||25/50 UM/UIM|
|washington d.c.||25/50/10||25/50/5 UM|
|West Virginia||25/50/25||25/50/25 UM|
*Based on standard policy minimum coverage requirements
States without car insurance requirements
Traditional auto insurance is not required in all states. Depending on where you live, there may be other options for filing a deposit or posting a bond with your state’s DMV, which serves as proof of financial responsibility. If you were to have an accident, this money would be given to the other driver to compensate him for his losses.
Here are some of the states that require either a standard auto insurance policy or a financial record:
- California: Option to deposit a deposit of $35,000
- Florida: Drivers can decline liability insurance by proving a net worth of at least $40,000
- Montana: Possibility of posting a bond or a deposit of $55,000 in cash or securities
However, keep in mind that forgoing traditional car insurance is usually a much more expensive option. The most flexible states for car insurance alternatives are New Hampshire and Virginia.
In New Hampshire, drivers are not required to carry auto insurance except where they must have an SR-22. In Virginia, drivers can waive auto insurance and pay a $500 uninsured motorist fee, making it the second cheapest state for alternative auto insurance.
Frequently Asked Questions
Is it better to have minimum coverage or full coverage?
Most car insurance companies sell minimum coverage and full coverage policies. While at least a minimum coverage policy is required in most states, a full coverage policy provides much greater financial protection. On the other hand, a minimum coverage policy is usually much cheaper than a full coverage policy. If you want more financial protection and have enough money to pay for the policy, consider purchasing comprehensive coverage.
What does a comprehensive car insurance policy include?
A comprehensive auto insurance policy typically includes liability insurance and your state’s minimum coverage requirements (if any), as well as collision and comprehensive coverage. Collision coverage covers repairs to your vehicle after an accident, while comprehensive coverage covers repairs to your vehicle after a non-collision incident.
How much does car insurance cost?
The cost of car insurance is different for every driver and depends on various personal factors. Your condition, claims history, driving record and deductibles can all affect the cost of your insurance. Bankrate’s 2021 quoted annual premium study found that in the United States, the average auto insurance premium is $1,674 per year for a full coverage policy and $565 per year for a full coverage policy. minimum. To find cheaper coverage, it helps to shop around and get quotes from multiple providers.
Is my new car covered by minimum coverage car insurance?
When you buy a new car, you must add it to your car insurance policy. You must purchase a new policy or add the new vehicle to your existing policy in order to be properly insured. If you buy the car without a loan or lease, you have the option of getting minimum coverage or full insurance. However, if you lease or finance the vehicle, your lender will most likely require you to obtain a full coverage policy and possibly even higher liability limits.
Does my minimum coverage car insurance cover me in another state?
Yes, your auto insurance policy is valid wherever you drive in the United States. Many policies also remain valid if you are driving across the border into Canada. When you purchase minimum coverage auto insurance, the policy must meet the coverage requirements in the state where the car is registered. However, there are no restrictions for driving in another state where the minimum requirements are higher.