New Hampshire and Virginia are the only two states without mandated auto insurance requirements, though that doesn’t exonerate drivers from liability; instead, those opting out must demonstrate they can cover costs should an accident happen.
Most states mandate at least some minimum level of liability coverage, with some also mandating personal injury protection and uninsured/underinsured motorist property damage insurance policies. We strongly suggest purchasing more than the state minimum coverage requirements.
Minimum Coverage Requirements
Nearly every state in the U.S. mandates car insurance requirements for drivers. Coverages and limits may differ by state; however, nearly all require at least liability car insurance to protect bodily injury and property damage claims; some also mandate additional coverages such as medical payments or uninsured motorist protection policies; additionally most require minimum policy limits for their drivers to meet.
Many auto insurers will only sell you coverage that meets or exceeds your state’s minimum coverages, so it is vital that you review them prior to requesting car insurance quotes. Most experts advise purchasing higher policy limits than what is legally required.
PIP coverage, required in many states with car insurance requirements, covers medical bills and part of your lost wages in case of an accident – regardless of who caused it. While PIP is mandatory in Florida and Minnesota, most other states with such requirements allow drivers to opt-in voluntarily.
New Hampshire and Virginia do not legally require car insurance; however, drivers in these states must demonstrate they possess enough resources to cover damages they might cause in an accident should they be found responsible. They may have to deposit an amount with their state’s department of motor vehicles or provide evidence of another form of financial responsibility such as bonds or cash in reserves in order to do this.
Minimum coverages may be necessary components of most policies, but they’re often insufficient to protect you financially in the event of a major accident. Therefore, it is a wise idea to add collision and comprehensive coverage as these can cover repair or replacement costs in case of an incident and are also usually required by lenders who finance your vehicle; you can check your loan agreement or contact your bank/credit union to make sure you meet their requirements, or buy additional add-on coverage from your car insurance provider to meet these standards.
Additional Coverage Requirements
Nearly all states (with the exception of New Hampshire and Virginia) mandate car insurance. Minimum requirements vary between states; liability coverage is always mandatory at minimum; some may even mandate personal injury protection and uninsured motorist coverage as additional options.
Minimum liability limits vary between states, while many insurers provide policies with greater levels of coverage than these state minimums. It’s often beneficial to purchase higher limits of liability coverage to better safeguard your financial interests in case an accident happens due to your negligence.
Liability insurance provides coverage for injuries to other drivers and property damage caused by you in an accident; however, its limits may not cover all expenses resulting from serious accidents. Therefore, uninsured/underinsured motorist (UM/UIM) coverage can help pay medical expenses or other damages caused by drivers without car insurance policies or who have minimal coverage – something liability alone cannot provide.
In most instances, your car insurance policy’s uninsured/underinsured motorist (UM/UIM) coverage will equal or surpass its standard liability coverage. Therefore, it’s essential to understand their differences and select an UM/UIM policy appropriate to your unique circumstances.
Comprehensive and collision coverage are often added as options to their car insurance policies, providing coverage against repair or replacement costs regardless of who was at fault for an accident. Finance companies frequently require this form of protection when leasing or borrowing a vehicle from them.
Comprehensive Physical Damage coverage (CPD) can be an additional optional car insurance coverage to consider, providing for repairs or replacement of damage from sources like fire, theft, acts of nature and even glass breakage. Depending on the value and expense of your vehicle this could prove invaluable addition to your policy.
Exempt States
Only certain states do not mandate car insurance, yet drivers in those states still must show proof of financial responsibility when driving without traditional auto coverage. Typically this involves posting a cash bond or depositing funds with the state; some also maintain unsatisfied judgment funds to pay damages caused by uninsured drivers. No matter which form of evidence is submitted in lieu of traditional auto coverage – doing so violates state law and could lead to fines, penalties, suspension or revocation of your driver’s license and vehicle registration.
Nearly all states require liability insurance to cover injuries to other drivers and property damage caused by an accident caused by you, should liability arise. Most states also mandate personal injury protection (PIP), uninsured/underinsured motorist coverage (UM/UIM), and medical payments as mandatory coverages in no-fault states; PIP covers medical expenses in these instances while UM/UIM provides losses caused by an uninsured/underinsured motorist collision while medical payments cover both parties regardless of who was at fault in no-fault states while uninsured/underinsured motorist coverage covers losses from such collisions while medical payments cover both parties in situations in which one party was at fault;
Some insurance companies provide optional coverage options such as comprehensive and collision. Comprehensive covers damages caused by events not covered by liability policies such as natural disasters, fires, theft, vandalism or rollover accidents and can cover towing, rental car expenses and loss of use costs. Collision coverage reimburses for the damages sustained from collision with another vehicle or object (e.g. a guardrail or tree) as well as potholes or rollover accidents.
Most car insurance policies also contain a provision allowing your policy to remain active in any state where driving legally allows, making them particularly useful if you frequently travel between two states with different auto insurance laws, or own a car financed from out of state. In many instances, out-of-state rules will take precedence over your home state minimum requirements; be sure to consult your agent about specific details of your situation.
Uninsured Motorist Coverage
Virtually every state requires you to carry at least some liability insurance, which covers damages or injuries caused by accidents you cause. Some states also mandate uninsured motorist coverage (UM or UIM coverage), which pays your own medical bills and car repairs should you get hit by someone uninsured. Although optional in many states, having this kind of UM/UIM protection is crucial considering 13% of drivers nationwide remain uninsured.
In general, the only way to obtain UM/UIM coverage is through purchasing it as part of a comprehensive and collision policy – although some insurers offer them as packages; otherwise they’re available separately in most states. Some states even enforce “no pay, no play” laws mandating that drivers purchase this coverage before renewing their license or registration.
Some states also mandate property damage coverage (PPI). This provides coverage for damage sustained to your vehicle in an accident regardless of who was at fault, including tires, bumpers and windshields being damaged as a result. It may even cover lost income if an accident renders you incapable of working afterward.
Some states also mandate the purchase of uninsured/underinsured motorist protection and uninsured/underinsured motorist liability (UMPD/UMBI). While similar to UM/UIM, these coverages provide additional protections. For example, UMPD can cover medical expenses and property damages caused by an uninsured or underinsured driver, and help cover car repair if an at-fault driver doesn’t carry sufficient coverage limits to fully compensate you.
In the United States, nearly 29 million drivers operate without auto insurance policies. While the proportion varies by state – Mississippi boasts 29% while New Jersey only requires 3% uninsured motorists – some states attempt to encourage drivers by passing no-pay, no-play laws, insurance verification systems and random selection programs; these laws don’t prevent drivers from seeking non-economic damages compensation if injured by uninsured drivers in an accident.