To help provide better financial protection for drivers on the road, each state in the United States has minimum auto insurance coverage requirements that you must meet if you want to get behind the wheel legally. This means that if you live in the United States and own a vehicle, you must meet state requirements for auto insurance no matter where you live or what state you are in.
As for types of coverage, a minimum auto insurance policy typically includes liability coverage for bodily injury and property damage, and it generally provides the minimum amount of coverage you need to have in that state. However, some states also require additional types of coverage. Minimum coverage car insurance is usually cheaper on average than a full coverage policy, which provides additional protection for your vehicle, so can be a way to save on insurance premiums. However, it is generally only available for vehicles without loans or leasing.
What type of auto insurance should I have?
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 auto insurance requirements unless drivers receive certain convictions that require them to carry an SR-22. Additionally, there are a few states, such as Michigan, Minnesota, and New Jersey, where drivers are required to carry liability and injury protection coverage.
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 Coverage (UM/UIM): 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|
|Florida||10 PDL only||$10,000 PIP|
|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 foregoing traditional car insurance is usually a much more expensive option in the long run or if you are involved in an accident. 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.