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Is Car Insurance Legally Required?

Car insurance is legally mandatory in 49 out of 50 states in the U.S., except New Hampshire. In these 49 states, you are required to have proof of insurance to legally drive and register a car. While you have the option to skip the mandatory liability-only car insurance in New Hampshire, you need to have proof of financial responsibility through a surety bond, a cash deposit with the state treasurer, or by self-insuring a fleet of vehicles. To stay legally compliant and protect yourself financially, it is essential to ensure you have an active car insurance policy across the U.S.

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How Much Car Insurance Coverage Do You Need?

The amount of mandatory car insurance coverage you need depends on the state you’re located in. While state requirements vary from one state to another, the most common car insurance requirement is the liability-only coverage with a minimum limit of $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $25,000 for property damage per accident.

Generally, the mandatory minimum liability coverage is denoted as $25,000/$50,000/$25,000 or 25/50/25 in short. Apart from the liability-only coverage, some states require personal injury protection coverage (PIP), medical payments coverage (MedPay), and uninsured/underinsured motorist coverage (UI/UIM).

Car Insurance Requirements by State

If you want to stay legally compliant and financially secure, it’s important to understand your state’s car insurance requirements. The table below provides a state-by-state breakdown of minimum coverage laws across the U.S.

State

Bodily Injury Liability (per person/per accident)

Property Damage Liability (per accident)

Additional Coverage Requirements

Alabama$25,000 / $50,000$25,000No additional requirements
Alaska$50,000 / $100,000$25,000No additional requirements
Arizona$25,000 / $50,000$15,000No additional requirements
Arkansas$25,000 / $50,000$25,000No additional requirements
California$30,000 / $60,000$15,000No additional requirements
Colorado$25,000 / $50,000$15000No additional requirements
Connecticut$25,000 / $50,000$25000UM/UIM bodily injury: $25,000 / $50,000
Delaware$25,000 / $50,000$10000PIP: $15,000 per person / $30,000 per accident
Florida$10,000 / $20,000$10000PIP: $10,000
Georgia$25,000 / $50,000$25000No additional requirements

Eligibility for Car Insurance Coverage

To be eligible for car insurance coverage, you generally need to meet a few key requirements. Most insurers require drivers to hold a valid driver’s license, have a registered vehicle, and provide proof of residence. Your driving record, claims history, and even your credit score may also impact eligibility and the rate you qualify for. In some cases, high-risk drivers may face limited options or higher premiums. Regardless of your background, most states ensure every driver has access to basic coverage.

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Minimum Car Insurance Vs. Standard Coverage

Minimum Car Insurance

Standard Coverage

Legally required in most states (liability-only).Not legally required, but highly recommended.
Covers damages and injuries you cause to others.Covers liability plus your own car with collision, comprehensive, and other essential coverages.
Basic protection, limited to state minimums.Broader protection with higher limits.
Lower monthly premiums.Higher monthly premiums.
Higher financial risk since your damages aren’t covered.Lower financial risk with more covered by insurance.
Best for drivers seeking legal compliance at lowest cost.Best for drivers wanting stronger financial protection and peace of mind.
While minimum coverage is relatively cheaper, it is often insufficient to cover liability compensations. More importantly, minimum coverage does not pay for the repair/replacement costs of your car. Typically, the minimum coverage is only useful to keep you legally compliant, but if you want adequate financial protection, then the standard coverage is always a better choice.
Car insurance consequences

What Happens If You Drive Without Car Insurance?

  • Fines
  • License Suspension or Cancellation
  • Vehicle Impoundment
  • Driver Ban
  • Record on Driver’s License
  • Financial Liability
  • Cost of Auto Repair
  • Increased Future Premiums
  • Lack of Protection from Uninsured Drivers

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Frequently Asked Questions (FAQ)

Find answers to common questions about car insurance requirements and our services.

Is car insurance required in every state?

Car insurance is required in 49 out of 50 U.S. states. The only exception is New Hampshire, where drivers must show proof of financial responsibility instead of mandatory insurance. 

What are the minimum requirements for car insurance?

The minimum requirements for car insurance vary across states, while the most common is liability coverage with limits of $25,000 per person, $50,000 per accident for bodily injury, and $25,000 for property damage (25/50/25). Some states also require car insurance coverage, such as personal injury protection (PIP), medical payments coverage (MedPay), and uninsured/underinsured coverage (UI/UM).

What are the requirements for auto insurance in Michigan?

In Michigan, you're required to carry liability insurance of at least $50,000 per person, $100,000 per accident for bodily injury, and $10,000 for property damage (50/100/10). In addition, Michigan law mandates personal injury protection (PIP) coverage; you can choose from six coverage levels depending on your healthcare and financial needs.

Do car insurance requirements vary by state?

Yes, each state sets its own minimum coverage requirements, so the type and amount of insurance you need depend on where your car is registered.

What happens if you drive without car insurance?

As car insurance is a legal requirement in almost every state in the U.S., you can face legal penalties if you’re caught driving without at least the mandatory minimum car insurance coverage. These legal penalties include fines, license suspension, and vehicle impoundment. Additionally, you may face higher premiums and hefty out-of-pocket expenses for liability compensations, vehicle repair/replacement expenses, and medical costs.

Can I drive legally in New Hampshire without insurance?

Yes, but only if you can prove financial responsibility through a bond, cash deposit, or by self-insuring a large fleet of vehicles.

Is minimum liability insurance enough coverage?

While the minimum liability insurance fulfills legal requirements, it is often insufficient to cover accidental damage and expensive medical bills. So, if you’re seeking adequate financial protection, the minimum liability-only coverage may not be enough.

How do I know the car insurance requirements in my state?

You can check your state’s Department of Motor Vehicles (DMV) or insurance regulator’s website, or consult with a licensed insurance company like USA Auto.

Do car insurance requirements change over time?

Yes, states can update their minimum coverage laws. It’s important to review your state’s requirements regularly to ensure compliance.

About Us

USA Auto Insurance Company is a licensed Managing General Agent (MGA) providing auto insurance policies underwritten by USA Underwriters Insurance Company.

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