How Much Car Insurance Is Mandatory in Every State

All states have different minimum car insurance coverage requirements. Some coverages are nearly universally required — for example, property damage liability coverage is included in car insurance policies in all states and Washington, D.C., and bodily injury insurance is part of liability coverage everywhere except Florida. Other coverages are more state-specific, like uninsured/underinsured motorist (UM) insurance, which is mandatory for drivers in about half of states.

While minimum coverage is the cheapest insurance you can buy, it may not cover all your expenses after an accident. MoneyGeek compiled a list of each state’s car insurance requirements and compared rates to higher coverage plans to help you decide what policy is right for you.

A state’s minimum car insurance requirements may include the following types of coverage:

• Bodily injury liability insurance
• Property damage liability insurance
• Uninsured/underinsured motorist insurance for bodily injury
• Uninsured/underinsured motorist insurance for property damage
• Personal injury protection or medical payments coverage.

Full coverage insurance — which includes comprehensive and collision coverage — is not required in any state. However, if you financed or are currently leasing your vehicle, you may be required to carry a full coverage policy.

If you’re looking for the most affordable option, minimum car insurance is the cheapest coverage you can purchase. It typically only includes liability insurance, meaning your policy covers the other driver’s expenses from bodily injuries and property damage if you’re at fault in an accident. Costs often exceed minimum limits, though, so insurance professionals recommend increasing your coverage above the state's minimum auto insurance requirements for a greater level of financial protection from at-fault accidents.

Depending on where you live, a state’s minimum auto insurance requirements may include uninsured/underinsured motorist (UM/UIM) insurance or personal injury protection (PIP):

• Uninsured motorist insurance financially protects you if an uninsured driver hits you. Typically, it’s best to have the same limits for UIM and liability coverage. This also covers hit-and-runs.
• Personal injury protection covers expenses from injuries you or your passengers sustain in an accident, regardless of who was at fault.

Note that bare minimum car insurance requirements don’t include comprehensive and collision insurance, which are both part of full coverage policies. Collision insurance helps pay for the cost of repairs if your car is damaged from hitting another or an object. Comprehension insurance covers damages sustained from events like vandalism, fire or theft. Full coverage policies are typically required if you have an auto loan or lease.

Car insurance is required in most states. However, you don't need auto insurance in New Hampshire to operate a motor vehicle legally.

According to New Hampshire’s Financial Responsibility Law, you need to prove that you can pay for damages if you cause an accident. For most people, it’s cheaper and easier to purchase a policy that meets the state’s minimum liability coverage — in New Hampshire, that’s 25/50/25, liability and uninsured/underinsured motorist insurance and at least $1,000 in medical payments coverage.

Purchasing a policy is still a good idea as New Hampshire is a tort state, meaning that if you’re at fault in an accident, you have to pay the cost of damage resulting from it. Because of this, MoneyGeek recommends buying car insurance even though it’s not required.

The average cost for auto insurance policies with state minimum coverage limits is $752 per year, although it varies by state. In comparison, full coverage insurance with liability limits of $300,000 for bodily injury per accident with a maximum of $100,000 for each individual and $100,000 for property damage has an average annual rate of $1,352.

There are several factors to consider to determine how much car insurance you need, including the kind of car you have and how much coverage you can afford. While they tend to be more expensive than liability-only policies, comparing quotes from different providers can help you find cheap full coverage car insurance.

When purchasing insurance, it’s important to understand the difference between different types of policies. Policies that meet the state's minimum auto insurance requirements don’t include collision and comprehensive insurance.

Comprehension insurance covers damages sustained from events like theft, vandalism, fire, severe weather events, animal strikes and cracked windshields. Collision insurance helps pay for the cost of repairs if your car is damaged from hitting another or a stationary object like a tree or light pole. It also covers rollover accidents and pothole damage.

Outside of being involved in an accident, there are several situations where full coverage car insurance is required, such as if you purchased your car using bank financing. Leasing agreements also typically require full coverage policies for the entire term of the lease. MoneyGeek highly recommends purchasing 100/300/100 full coverage insurance for the best financial protection from at-fault accidents.