Do auto insurance requirements vary a lot in the U.S, or are most
state minimums about the same? Also, are you obligated
to buy car insurance or are there other options?
By viewing our
interactive state requirement map
list of minimum state coverages
, you can see what all states and the District of Columbia require
in regard to auto insurance. You'll find that liability
requirements vary greatly from state to state.
For example, Alaska mandates drivers carry bodily injury
liability of $50,000 per person and $100,000 per accident along a
$25,000 property damage limit (referred to as 50/100/25). In
comparison, California requires bodily injury liability limits of
only $15,000 person, $30,000 per accident and just $5,000 for
property damage liability (15/30/5).
And then there are
that require you to carry personal injury protection (PIP) or
medical payments (MedPay), in addition to liability
coverages. For instance, New York requires drivers to carry
auto insurance liability limits of 25/50/10,
bodily injury of $25,000 per person, $50,000 per accident (25/50),
and PIP limits of at least $50,000.
The reason the mandated amount of auto insurance varies by state
is because state governments are in charge of making their own
financial responsibility laws in regard to motor vehicles.
For all states to have the same car insurance mandates there
would need to be a federal law on how to insure motor vehicles,
which there is not.
Generally you aren't obligated to buy car insurance if you don't
have a car. However, if you are registering a car, you'll
normally be asked for proof of financial responsibility. And
while car insurance is the preferred method of showing financial
responsibility by most drivers, there are other options beyond
buying car insurance - in some states.
There are laws in some states that specifically require that car
insurance be carried by car owners, while other states' laws are
written in a way that car owners and drivers are only required
prove to the state that they are maintaining an approved method of
financial responsibility on their vehicle.
Alternative methods allowed in such states typically include
bonds, deposits of cash or securities, or self-insurance.
For instance, Texas laws allow for car owners to show financial
responsibility with a car insurance policy with liability limits of
$30,000 per person and $60,000 per accident for bodily injury and
$25,000 for property damage (30/60/25) or alternative methods of
- Surety bond
- Deposit of cash or securities
- Deposit of cash or cashier's check
- Self-insurance certificate (must own 25 or more
- A certificate of financial responsibility should be issued in
lieu of an insurance card for the above options.
There are also a few states in which you can pay an uninsured
motorist fee to drive without car insurance, though we wouldn't
recommend this method since it leaves you personally on the hook
for any damages you cause to others (or your own car) if you're
at-fault in an accident. (See "Drive uninsured and legally for
And, then there is New Hampshire, whose law only requires that
after an accident you are able to provide sufficient funds to meet
the states' financial responsibility laws. If you can't, then
penalties will be handed down - such as having your driver's
license and registration suspended.
Even with the radically different financial responsibility laws
that are in place throughout the U.S., drivers usually choose to
buy a car insurance policy as a means to comply with the law
because it's the generally accepted way to show financial
responsibility - not to mention it's so easy to do.
Not only that, other types of financial responsibility
arrangements don't pay to fix your car. If you obtain
collision and comprehensive coverage, your car will be covered if
you are in an accident (regardless of fault) and for damages to
your vehicle as the result of hail, flood waters, wind, fire or
If you are looking for a way in which to comply with your states
financial responsibility law, you can comparison shop and buy a car
insurance policy online in less than a half-hour and, in many
states, the proof of insurance is electronically submitted to the
state. It's that simple.