Minimum Car Insurance Requirements by State [2023]

Whether you’re buying car insurance for your new car or looking to reduce how much you pay a month, understanding minimum insurance requirements in your state is crucial to finding the right policy. However, states require different amounts of coverage, so knowing how much you need can be a bit confusing.

Most states require a minimum amount of liability insurance, while many others require uninsured motorist or personal injury protection coverage. While minimum insurance is your cheapest option for coverage, it’s not always your best bet — many drivers benefit from buying more coverage.

Read on to learn about your state’s minimum insurance requirements and how much it might cost you. Then, compare rates with as many companies as possible to find the best minimum coverage prices.

What are the minimum insurance requirements in each state?

Most states require a minimum amount of car insurance before you can register your car or legally drive. Minimum car insurance requirements vary by state, but most drivers are required to buy at least liability insurance. Many states also include uninsured/underinsured motorist or personal injury protection insurance in their coverage requirements.

Check below for car insurance laws by state and how much you’ll need before you hit the road.

As you can see, there is a great deal of variation in insurance requirements between states. States like Michigan and Wisconsin have large insurance requirements, while some states like California are pretty lax.

When it comes to buying car insurance, the minimum amount your state requires is your cheapest option for coverage. It doesn’t offer the best protection for your car, but state minimum car insurance offers the lowest prices.

How much does minimum insurance cost in each state?

As you saw above, there’s significant variation between states when it comes to insurance laws. While minimum insurance is your cheapest option for a policy, the amount you’ll pay depends on where you live. States with higher insurance requirements typically have higher average insurance rates, though many other factors affect prices.

To see how much the average price for minimum insurance in your state is, check below.

Although minimum insurance is affordable, it comes with a few financial risks. First, minimum insurance doesn’t cover your car. If you cause an accident, you’ll have to pay for your repairs by yourself. The second risk is that most states don’t require very much insurance, and exceeding those limits is not difficult. If your insurance runs out before everything is paid for, you’ll be left with the rest of the bill.

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What types of insurance are required by states?

You saw that states require different types of insurance. The most commonly required type of insurance is liability insurance, but there are a few others some states require. The types of insurance your state might require include the following:

• Bodily injury liability: The first half of liability insurance pays for injuries you cause to other people, their passengers, and any pedestrians or bystanders.
• Property damage liability: The other half of liability insurance covers damage you cause to other people’s property, including vehicles and buildings.
• Uninsured/underinsured motorist: Although most states require car insurance, not everyone follows the law. Uninsured motorist insurance protects you from drivers without adequate coverage and is required in 20 states.
• Personal injury protection: Personal injury protection covers health care expenses for you and your passengers after an accident, no matter who was at fault. Personal injury protection insurance is required in 16 states.
• Medical payments: Medical payments insurance — or MedPay — is similar to personal injury protection insurance, but it doesn’t cover lost wages. Maine is the only state that requires MedPay insurance.

Although these are the only coverages required by state law, many other types of insurance are available. For example, many drivers choose to buy comprehensive and collision insurance to better protect their cars.

Which states don’t require car insurance?

Most states require car insurance, but there are a few that don’t. Currently, only two states don’t require car insurance before you can start driving:

• New Hampshire: New Hampshire drivers are only required to prove they can pay for the damage they cause in an accident. Drivers with a major violation, such as a DUI or at-fault accident, might be required to buy insurance. Compare New Hampshire car insurance rates here.
• Virginia: Virginia allows drivers to pay an annual $500 uninsured motorist fee instead of buying coverage. However, that leaves you completely responsible if you cause an accident. Since minimum insurance costs about $500 a year in Virginia, most drivers are encouraged to buy coverage. Compare Virginia car insurance rates here.

Many other states allow drivers to make a large cash deposit with the DMV rather than buy car insurance. Every state is different, but the deposit amounts are usually between $25,000 and $115,000. Due to the large deposit amount and the inconvenience of getting into an accident, most experts recommend getting insurance instead.

Find Affordable Insurance in Your State Today

No matter how much state car insurance you need, minimum coverage offers the lowest prices. While understanding how much insurance you need might be a bit confusing, you don’t have to figure it out by yourself — an insurance representative can help.

Although minimum insurance is your cheapest option for coverage, you should still compare as many rates as possible. You’ll see significant variations in rates between different companies, and you’ll likely overpay if you don’t compare rates.

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Case Studies: Understanding Minimum Car Insurance Requirements by State

Case Study 1: The Cost of Minimum Insurance in Michigan

In this case study, we follow John, a resident of Michigan, and examine the high insurance requirements in the state. John opted for minimum car insurance coverage to save on costs. However, when he caused an accident, he found himself responsible for covering the damages to his own vehicle, resulting in unexpected expenses.

Case Study 2: California’s Lax Minimum Insurance Requirements

Sarah, a driver in California, serves as the focus of this case study. With relatively relaxed minimum insurance requirements in the state, Sarah decided to stick with the minimum coverage. Unfortunately, she got into a collision with an uninsured driver, and her minimal coverage couldn’t fully cover the costs of her medical bills. We explore Sarah’s experience and discuss the limitations of minimum insurance in such situations.

Case Study 3: Alternatives to Car Insurance in New Hampshire and Virginia

In this case study, we introduce Mark, a resident of New Hampshire. Mark took advantage of the state’s alternative method by making a large cash deposit with the DMV instead of purchasing car insurance. However, Mark later faced challenges when he got involved in an accident that exceeded the amount of his deposit.

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