Car insurance is legally required in almost every state for drivers who own a vehicle or regularly operate one. Each state has minimum coverage requirements to financially protect drivers in the event of an accident.
Typically, a minimum coverage car insurance policy includes bodily injury liability and property damage liability coverage, but some states also require additional coverage types. Minimum coverage car insurance can be a way to save on insurance premiums, but it is usually only available for vehicles without a loan or a lease.
What insurance is required?
Nearly all states have some form of car insurance requirement. Some states allow drivers to satisfy minimum requirements through a bond, deposits, evidence of self-insurance or by carrying 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 coverage types that are typically required with minimum car insurance:
- Bodily injury (BI) liability: If you cause an accident with another driver, bodily injury liability coverage will help pay for medical expenses related to the other driver’s injuries. It may also cover your legal fees if the other driver sues you for their losses.
- Property damage (PD) liability: Property damage liability coverage pays toward property damage that you cause to others. For example, if you hit another driver, your property damage liability insurance would help pay for their vehicle’s repairs.
- Uninsured/underinsured motorist coverage (UM/UIM): Uninsured and underinsured motorist coverage offers financial protection in the event that you get into an accident with a driver who is uninsured or does not have enough 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 get into an accident, PIP can pay for your medical bills, lost wages, rehab costs and related expenses, regardless of who caused the accident. This coverage can also be purchased in some at-fault states.
- Medical payments coverage (MedPay): Medical payments coverage helps pay your medical expenses following an accident and is not as robust of coverage as PIP can be. It is available in non-PIP states and is considered optional coverage in most states. However, a few states do require drivers to carry medical payments coverage.
While these coverage types are often required at the state level, the minimum amount of coverage allowed per person and 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 car insurance requirements in each state
Before deciding to carry minimum coverage car insurance to satisfy your state’s insurance requirements, it is a good idea to review the minimum requirements in your state. Also, remember that you can always purchase more coverage than what is required if you want additional financial protection. It is a good idea to consider getting quotes for multiple coverage levels before choosing the least amount of car insurance coverage available in your state to save on auto insurance premiums.
The table below includes the minimum car insurance requirements in all 50 states and Washington D.C.
|State||Bodily injury liability and property damage liability||UM/UIM, PIP and MedPay|
|Michigan||50/100/10||Six PIP options: minimum $50,000 for insureds on Medicaid|
|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
|South Carolina||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 the Standard policy minimum coverage requirements
States without car insurance requirements
Traditional car insurance is not mandatory in all states. Depending on where you live, there may be alternative options to put down a deposit or post a bond with your state’s DMV, which serves as proof of financial responsibility. If you were to get into an accident, that money would be given to the other driver to compensate them for their losses.
Here are a few of the states that require either a standard car insurance policy or a financial filing:
- California: Option to put down a $35,000 deposit
- Florida: Drivers can decline liability insurance by proving a net worth of at least $40,000
- Montana: Option to post a bond or a $55,000 deposit of cash or securities
In New Hampshire, drivers are not required to carry auto insurance, except in cases where they must have an SR-22. In Virginia, drivers can forgo car insurance and pay a $500 uninsured motorist fee, making it the second cheapest state for alternative car insurance.
Frequently asked questions
Is it better to get 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 offers significantly more 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 to afford the policy, consider purchasing full coverage.
What does a full coverage car insurance policy include?
A full coverage car insurance policy generally includes liability insurance and your state’s minimum coverage requirements (if applicable), plus collision and comprehensive coverage. Collision insurance covers your vehicle’s repairs after an accident, whereas comprehensive coverage covers your vehicle’s repairs after a non-collision incident.
How much does car insurance cost?
The cost of car insurance is different for every driver and it depends on a variety of personal factors. Your state, claim history, driving record and deductibles can all impact the cost of your insurance. Bankrate’s 2021 study of quoted annual premiums found that in the U.S., the average car insurance premium is $1,674 per year for a full coverage policy and $565 per year for minimum coverage. To find cheaper coverage, it helps to shop around and get quotes from multiple providers.
Is my new car covered under minimum coverage car insurance?
When you purchase a new car, you must add it to your car insurance policy. You must buy a new policy or add the new vehicle to your existing policy so that you’re properly insured. If you purchase the car without a loan or lease, you have the option to get minimum coverage or full coverage insurance. However, if you lease or finance the vehicle, your lender will most likely require you to get a full coverage policy and possibly even higher liability limits.
Does my minimum coverage car insurance cover me in another state?
Yes, your car insurance policy is valid wherever you drive in the United States. Many policies also remain valid if you drive across the border into Canada. When you purchase minimum coverage car 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.