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Minimum State Insurance Requirements



All States, other than Virginia, require drivers to carry some level of minimum automobile insurance (otherwise known as “compulsory” insurance). Virginia requires drivers to pay a fee if they don’t want to carry the minimum insurance (so effectively, you’re paying for insurance in every state). The minimum coverage levels vary state by state and are intended to keep the roadways safe for all drivers; they are not intended to be “recommended” levels of coverage. Only you can determine what coverage fits your specific needs.

Whether the minimum legal insurance requirements meet your needs or whether you need a more robust policy is a tough question. What we can do is help to find you free car insurance quotes online so that you can shop for the right car insurance policy, at the most affordable price without commitment; all from the comfort of your home and at your own pace.

In general, most states require drivers to carry personal injury insurance for the driver/policyholder, personal injury insurance for others who might be involved in the accident and property damage insurance. Some states add uninsured or underinsured motorist coverage to protect against drivers who violate the law and don’t purchase car insurance. Insurance quotes often cite the coverage in a standard format: XX/XX/XX. For instance: 25/50/10. This convention is generally interpreted as $25,000 of personal injury insurance for the driver (maximum benefit paid per claim after the policyholder pays the deductible), $50,000 of personal injury coverage for all people involved in an accident and $10,000 of property damage coverage per claim. The information provided below follows this convention.

You may be wondering why a State’s legal insurance requirements wouldn’t meet your needs. If the laws exist to protect the public’s safety and to keep the roadways safe shouldn’t they be adequate for your needs? They very well may be, but before you decide whether that’s the case keep in mind some basic facts.
Politicians make the laws and in politics upsetting the people who have elected you to office by requiring them to pay a large cost for car insurance isn’t usually going to win you much support in future elections. While we aren’t suggesting that politicians would risk the public’s safety by legislating requirements that are less than optimal, there is a natural incentive to keep car insurance as cheap as possible.

It is also important to keep in mind that not everyone can afford a significant amount of insurance. While most of us would like more insurance, we all have to decide what we can afford financially. Our elected officials understand this and when faced with creating a law they have to balance compliance with public good. If they pass a law that many people can’t comply with, those people won’t. Instead of having some insurance (even inadequate insurance) a large percentage of the population will simply go without insurance. This inevitably results in a less safe environment than if the politicians had lowered the compulsory limits. With this understanding, laws are often enacted at the lowest possible threshold.

Many laws are also passed without a provision for inflation. While $20,000 of personal injury protection may have been adequate in 1980, inflation erodes that coverage. A reasonably accepted rate of inflation means that $20,000 of coverage in 1980 is worth about $7,000 today. Obviously a law that doesn’t allow for inflation is going to quickly lead to inadequate liability coverage.

However, for some, the legal minimum is perfectly adequate. You may be in a situation where the legal minimum is exactly what you need. If you are a young driver or if you are struggling to just get by financially, paying for additional insurance may not make sense. Your state may also have an inflation provision and has taken a tougher stance on compulsory requirements. The legal minimum may be the right policy for you.

You can see by just looking at the requirements listed below that the liability amounts vary significantly by state. Why would Maine require $100,000 of total personal injury coverage, but Florida only $20,000? Medical costs certainly aren’t much more expensive in Maine than Florida (if at all), and it’s unlikely that there are fewer serious injuries in accidents between states. So, it’s up to you to decide whether the State law protects you to the extent you need protection. In the event of a serious accident involving multiple vehicles, medical costs can sky-rocket as can property damage. Are you comfortable assuming liability beyond the minimum coverage? Can you afford to purchase more coverage? Bankruptcy is always the option of last resort, and while it sounds drastic, it should be weighed against the chances of a serious accident as well as your ability to pay for more insurance.

In addition to requiring minimum levels of auto insurance, most states also support a regulatory organization (a “department of insurance” or “insurance commissioner’s office”) to monitor insurance companies operating in the state and to look out for the public’s well-being. If you have a concern about an insurance practice or a problem with your policy, be sure to contact your State’s institution for assistance. Your tax dollars supports them and they exist to make sure that you are treated fairly by your insurance company. If you search online for “insurance commission” for your State, the state-sponsored website will generally be readily identifiable toward the top of the search results.

Browse our directory of U.S. states to learn about the insurance requirements for each state.