Minimum Car Insurance Requirements By State
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Minimum car insurance requirements vary from state to state. This means the car insurance coverages and limits that work for a friend or family member living elsewhere might not be right for you. NerdWallet has assembled minimum requirements by state;so you can quickly and easily find how much car insurance you need to drive legally.
Top 5 Most Expensive States For Car Insurance
The places with the priciest car insurance arent concentrated in one region of the U.S; theyre all over the country.
While it might make sense that states with high traffic and dangerous weather have higher insurance premiums, that doesnt entirely explain why car insurance is so expensive in certain states. For example, insurance companies are more wary of Louisiana drivers because nearly 12% are uninsured and about 40% only have the state minimum coverage of $15,000 per person and $30,000 per accident, which is low compared to other states.;
Some states are more protective of consumers and want to make sure rates are more fair, and others have very limited oversight over insurance companies, says Heller. That can drive real differences in rates.
Two other states on the list also have an unusually higher number of uninsured drivers: Michigan at nearly 26%, the second-highest in the country, and Florida, at about 20%. When an uninsured driver crashes, the cost of the accident is passed along to insured drivers, typically through higher premiums. But theres a reason Michigan, a no-fault state, has so many uninsured drivers: it has some of the highest minimum coverage requirements for auto insurance in the country, which has made coverage unaffordable for many.
These are the five most expensive states for car insurance:
Is Car Insurance Required
Traditional car insurance is not legally required in every state; New Hampshire and Virginia are the exceptions. However, states that dont require car insurance do require drivers to carry some form of financial responsibility. Even if you live in a state that doesnt require insurance, an alternative will apply.;
Each state also requires drivers to carry several different types of car insurance. Bodily injury liability and property damage coverage the two kinds that are typically required at the state level. All other coverages, like collision and comprehensive coverage, are optional.
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Minimum Requirements For Car Insurance By State
Car insurance requirements vary by state. Nearly all states have minimum requirements for liability coverage, but there are a number of other coverages that may or may not be required in a specific state. Car insurance coverages that may be required in your state include:
- Liability insurance: Almost all states require a minimum amount of liability insurance. This coverage helps pay for any injuries or damages you cause in a car accident, including those of the other driver and their passengers.
- Uninsured/underinsured motorist coverage:UM/UIM coverage helps cover the cost of injuries to you and your passengers, as well as damage to your car and other property, if you’re hit by a driver with little or no insurance. About half of all states require UM/UIM coverage, and some may only require you to purchase coverage for bodily injury.
- Personal injury protection :PIP covers medical expenses for insured drivers and their passengers, regardless of fault. It can also cover lost wages or other benefits not covered by health insurance. You’ll typically only need this coverage in no-fault states, but a few at-fault states require it as well.
- Medical payments coverage: This coverage goes toward medical expenses due to injuries from a car accident. It covers you, your family, or your passengers. It doesn’t cover lost wages or any additional benefits. Maine is the only state that requires medical payments coverage.
Learn more about each type of car insurance coverage.
What States Don’t Require Car Insurance
There are only two states where car insurance is not mandatory for all drivers: Virginia and New Hampshire. In Virginia, an uninsured motor vehicle fee may be paid to the state, while in New Hampshire, vehicle owners have the option to post cash bonds. All other states have some form of car insurance requirements, typically liability or personal injury protection, depending on the related laws in the state.
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Showing Proof Of Financial Responsibility
Drivers who opt out of auto insurance need to provide proof of financial responsibility like other drivers. Instead of carrying insurance cards, they have to carry copies of their bonds and show them to the police if they are pulled over for traffic violations.
The real trouble comes when a driver is in a car accident, or even just pulled over, and can’t provide proof of car insurance or financial responsibility. There’s a good chance the driver’s license and registration will be suspended. Getting them reinstated will require you to obtain proof of insurance or financial responsibility. In some states, repeat offenders are required to have insurance coverage for a stated length of time, such as three years.
Exception: College Students Who Attend School Out Of State
College students who attend school in a different state than where they grew up may or may not need to buy a new policyit depends on the laws of the state. For example, people going to college in Idaho are specifically allowed to maintain out-of-state registration, while Connecticut students are not. Some states, like Massachusetts, allow out-of-state students to maintain a primary registration elsewhere, but they must notify the local police department of the vehicle.
Within a given state, you are more likely to be required to purchase student car insurance in the state the school is located if the following are true:
- The student legally owns the car and has their own separate policy .
- The student lives in the state year-round .
In either case, we recommend that you check with your insurance company to see if you are required to update your policy in order to protect your vehicle while at school, just to be safe.
When You Get Your New Policy Review It
Make sure the information is correct and the coverage is what you bought. Contact the company right away if you find an error. Send changes to your agent, broker, and/or insurance company in writing and keep a copy. Do not be afraid to contact the insurance company directly to make sure that your agent or broker has requested the coverage you wanted. Use “certified mail/return receipt requested” to make sure that your letter was received.
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How Much Coverage Do You Need
Depending on the value of your vehicle, the state’s minimum coverage may not be enough. According to ValuePenguin, they recommend at a minimum, a policy with:
- $100,000 bodily injury coverage per person
- $300,000 bodily injury coverage per accident
- $50,000 property damage per accident
It is always a good idea to evaluate your own insurance needs, considering things like how much it will cost to repair or replace your vehicle. Shop around to find a provider who offers you enough coverage.
How Much Do Car Inspections Cost
The costs associated with obtaining an inspection vary from state to state and within states depending on the circumstances. In Texas, for example, it typically costs only seven dollars for an annual safety inspection for newer vehicles, while safety and emissions tests can cost as much as $25.50 in Dallas and Houston.
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Ensure You Are Selecting The Right Car Insurance Coverage
Auto insurance is something that most people don’t think about very frequently. While there are several factors that drive people to look to change auto insurance carriers, it is important to educate yourself in order to ensure you select the right coverage for you. The right coverage means not paying for coverage you don’t need and not foregoing coverage that would make sense for your personal situation. While price is a major factor, we also consider other factors such as customer service and the claims process when choosing what we think are the best auto insurance providers.
Do I Need A Car Inspection To Get Insurance
Whether or not you will be required to have your vehicle pass an inspection to secure insurance depends upon the state where you are located. For example, certain states require inspections prior to a registration. Additionally, some insurance companies require an inspection independently of state requirements before issuing an automobile insurance policy. When considering the best car insurance company for your protection, ask about the carriers inspection requirements.
There are three general types of inspections that may be required by a carrier:
Worksheet For The Low Cost Auto Insurance Program
Use this worksheet to write down the costs of your auto insurance from the Low Cost Automobile Insurance Program .
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|With a CLCA policy you can also buy additional coverage. For an extra charge,;you can buy:||;|
What Types Of Car Insurance Are Mandatory
Several types of auto insurance coverage offer different protections in the event of an accident. How much coverage you will need depends on your state’s requirements and your personal circumstances.
The table below quickly summarizes the main differences between the mandated types of car insurance.
|Who and what it benefits|
Bodily injury liability
|$15,000 to $50,000 per person/$30,000 to $100,000 per accident||Another driver’s injuries|
|$5,000 to $25,000 per accident||Another driver’s car or property damage|
Uninsured/Underinsured motorist BI
|$20,000 to $50,000 per person/$40,000 to $100,000 per accident||Your injuries, if the other driver is not insured|
Uninsured/Underinsured motorist PD
|$5,000 to $25,000 per accident||Your car damage, if the other driver is not insured|
Personal injury protection /Medical benefits
|$1,000 to $50,000||Your injuries and your passengers’ injuries|
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Is There A Way To Save On Auto Insurance
Yes! The best way to save money on auto insurance is to shop around. Every company may charge a different rate for whats seemingly the same coverage.
The rate a particular company charges will depend on a number of factors. For example, one company may charge you more because you had a speeding ticket in the past. For another company, speeding tickets may not matter at all.
You can always ask if any discounts are available to you. Some of the most popular discounts are multi-policy and multi-car.
There are discounts for combining insurance policies for your auto and home and reduced rates for safe drivers and even for good students. You can always ask an insurer what kind of discount options they offer. Eventually, you may be surprised by how much you saved.
What Most Drivers Dont Know
State insurance departments often tell drivers they must get auto insurance. But dig into the regulations and youll find thats not always quite true. In many cases, you can arrange self-insured auto insurance by depositing cash or posting a bond with the state in lieu of insurance.
Heres a breakdown of states where you can deposit funds or post a bond in lieu of car insurance:
* In Maryland, drivers must also meet the states requirement for personal injury protection, unless waived, and uninsured motorist coverage.
** Or $30,000 in securities.
Most states will also consider self-insurance plans, in which vehicle owners pay for accidents they or their employees cause. States approve these plans on a case-by-case basis and typically require them to provide as much coverage as regular insurance. You usually must own a fleet of at least 25 vehicles to self-insure, but 10 states allow self-insurance plans for those who own fewer vehicles: Alaska, Connecticut, Georgia, Hawaii, Indiana, Maryland, New Mexico, North Dakota, Pennsylvania and Vermont.
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State Minimum Car Insurance Requirements
Always check your state’s minimum car insurance requirements when buying a policy. These are the state minimum requirements, listed as bodily injury liability per person, per accident, and property damage coverage, as well as any additional requirements.
These coverages are the minimums for each state listed. If you have a lease or an auto loan, you may be required to have even more insurance coverage.
Talk To The Department Of Insurance
We are the state agency that regulates the insurance industry. We also work to protect the rights of insurance consumers.
Contact the California Department of Insurance :;
- If you feel that an insurance agent, broker, or company has treated you unfairly.
- If you have questions or concerns about insurance.;
- If you want to order CDI brochures.;
- If you want to file a request for assistance against your agent, broker, or insurance company.;
- If you are having difficulty opening a claim with your insurance company.
- To check the license of an agent, broker, or insurance company.
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Car Insurance Laws In Virginia
Virginians have three choices: buy traditional car insurance, prove financial responsibility for an accident, or pay a $500 Uninsured Motor Vehicle Fee to the Virginia DMV at the time of registration. This fee does not act as car insurance, it simply waives your requirements for purchasing minimum requirements from a provider. Drivers and owners must also renew the fee each time they renew their registration.
If you do choose to buy car insurance in Virginia, it must follow these minimums:
- $25,000 bodily injury liability insurance per person
- $50,000 bodily injury liability insurance per accident
- $20,000 property damage liability insurance
Drivers who choose to pay the $500 UMF are still financially responsible if they cause an accident. Because of this, they can also apply for a self-insurance certificate from the DMV or deposit funds from an executed surety bond. This option is ideal for someone with a large amount of cash who would prefer to forgo the car insurance process.
Canceling Coverage With A Previous Insurance Company
If you already had insurance in place on your current car, make sure your new coverage is active before canceling the previous policy. You should get a refund for the unused months on the old policy.
Make sure you get confirmation that your policy was canceled.
If you cancel auto insurance before the new coverage is effective, your car will be uninsured, which can have serious legal and financial consequences if you get into a car accidentmeaning you will have to pay for all damages and expenses out-of-pocket, and you could be ticketed for driving uninsured.
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What Is State Minimum Car Insurance
State minimum car insurance is the minimum amount of insurance coverage that is legally required by the state in which you live. The requirements will vary from state to state. The state minimum requirements will usually include the following:
- Liability insurance: Liability covers any damages that you cause to another driver. Some degree of liability is a requirement in most states. Liability insurance is written with three numbers: the bodily injury coverage limit per person, coverage limit per accident, and limit of property damage coverage.
- Uninsured/underinsured coverage: While only about half of the states in the U.S. require uninsured/underinsured coverage, it can be beneficial if you’re in an accident with an uninsured driver.
- Personal injury protection : PIP coverage is only a requirement in about 20 percent of states, according to NerdWallet. It covers the medical costs of anyone injured in the accident, regardless of who is at fault.
- Medical payments coverage: Medical payments coverage is another option for covering costly medical expenses following an accident. It is a requirement in Maine and Pennsylvania.
While the minimum car insurance required by your state of residency will cover damages you cause to another driver, it will not cover your own. Additionally, it will not cover damages to your vehicle that are not from an accident, like a tree falling or theft. You will need full coverage for these types of events to be covered.
Why Does Where You Live Affect Your Car Insurance Rate
Your insurance company’s experience with losses in your neighborhood influences how much you pay. So does your states car insurance laws. In addition to state minimum liability requirements that differ, some states, for instance, allow insurers to consider your credit history and gender when calculating your cost, while others dont allow it.
Additionally, urban areas tend to have more cars on the road more often than rural areas. That leads an increased number of accidents, theft and vandalism.; The more claims made in an area, the higher the rates will be.
In your particular ZIP code, factors that can drive rates higher include the number of:
- Claims for that area and how much they cost
- Vehicles stolen
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