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Purchasing a new or new-to-you vehicle is often a life milestone and exciting event. When registering your vehicle, most states will require you to show proof of insurance. In some cases, this is liability insurance, which provides coverage for other vehicles if you are at fault. Although it does not include coverage for damages to your own vehicle, liability insurance is a good way to ensure you are not stuck in debt, or court, for years.
Read on to learn about the minimum car insurance requirements by state and to learn about the different types of insurance typically required.
What Insurance Is Required?
The majority of states have a basic requirement for drivers who register a vehicle to maintain coverage. The requirements for the type of insurance and the amount of coverage vary from state to state. You will have to follow the guidelines of the state where your vehicle is registered. Here are some standard coverage types that states can require drivers to carry:
- Bodily injury liability: Liability for bodily injury is needed in the event you cause an accident with another driver. The bodily injury liability coverage will help pay for the other driver’s medical expenses and may even cover legal fees.
- Property damage liability: This type of liability insurance pays for the damages to property and other vehicles if you are found at fault.
- Uninsured motorist: Uninsured and underinsured motorist coverage provides you financial protection for your vehicle if you are in an accident with another driver who has no insurance or not enough insurance to cover your losses.
- Medical payments coverage: While bodily injury liability covers the medical bills of the other driver, if you are at fault, medical payments coverage can help you pay for your own medical expenses.
- Personal injury protection: Certain states have something called no-fault laws. These states require drivers to have personal injury protection. It can help pay for your medical bills (like medical payments coverage), and it can also help supplement your income by covering lost wages and rehabilitation.
Minimum Car Insurance Requirements Per State
Each state’s minimum car insurance may vary. Here is a breakdown of the average monthly cost of car insurance per state:
- Alaska: $116
- Alabama: $108
- Arkansas: $142
- Arizona: $118
- California: $142
- Colorado: $152
- Connecticut: 129
- Washington D.C.: $119
- Delaware: $135
- Florida: $194
- Georgia: $128
- Hawaii: $90
- Iowa: $96
- Idaho: $105
- Illinois: $107
- Indiana: $99
- Kansas: $133
- Kentucky: $154
- Louisiana: $192
- Massachusetts: $109
- Maryland: $120
- Maine: $92
- Michigan: $211
- Minnesota: $117
- Missouri: $141
- Mississippi: $125
- Montana: $129
- North Carolina: $84
- North Dakota: $110
- Nebraska: $127
- New Hampshire: $80
- New Jersey: $125
- New Mexico: $106
- Nevada: $145
- New York: $141
- Ohio: $77
- Oklahoma: $129
- Oregon: $111
- Pennsylvania: $112
- Rhode Island: $156
- South Carolina: $122
- South Dakota: $120
- Tennessee: $105
- Texas: $125
- Utah: $109
- Virginia: $86
- Vermont: $88
- Washington: $101
- Wisconsin: $90
- West Virginia: $119
- Wyoming: $121
States Without Car Insurance Requirements
Some states do not require drivers to have traditional car insurance. Depending on your location, there may be options for coverage that provides an official proof of financial responsibility or obligation. This entails the option of placing money on hold with the state. In the event that you were to get in an accident and be proven to be at fault, the funds would be given to the other party as compensation for their property loss or damage. States that do not require basic liability insurance are:
- New Hampshire
- Virginia (with a $500 per year fee to the DMV)
California provides an option for drivers to place $35,000 in a cash deposit with the DMV or a surety bond in case of an accident. Florida drivers maintain the right to decline bodily injury insurance if they can give viable proof of a net worth of at least $40,000. Montana offers an option to post a bond or a value of $55,000 deposit of cash or securities. Traditional car insurance may be a better investment because it can save thousands of dollars in damages and gives drivers peace of mind.
Car Insurance FAQs
Many individuals have the same concerns when shopping for car insurance. Here are some answers to frequently asked questions about car insurance.
Is It Better to Get Full Coverage or Can I Just Get Minimum Coverage?
The answer to this depends on your individual needs, the age and value of your car, and whether or not there is a lease on your vehicle. If you are still making payments to a dealership or bank, it might benefit you to get full coverage. Additionally, a condition on many contracts requires drivers to get full coverage on vehicles they are still making payments on. This protects the bank’s or dealership’s investment if you are in an accident.
What Are Some Factors That Will Affect Insurance Rates?
The rates insurance providers quote a driver will depend on different factors, depending on your state and the insurance company you are working with. Typically, some factors that influence the price you will pay on your premiums include:
- Age
- Driving history
- Type of vehicle
- Credit history
- Gender
- Marital status
- Previous DUI convictions
Younger drivers are usually considered higher risk because they are less experienced and tend to be more reckless. The type of vehicle you drive, and sometimes the color, will influence the insurance quotes you receive and the premiums you will end up paying. Drivers with a low credit score may also be considered high risk by agencies that run a credit check, but not all do.
Does Insurance Cover Routine Maintenance?
No, insurance does not cover maintenance expenses. Properly maintaining your vehicle by rotating tires, checking the brakes, changing the oil, and making sure the other fluids are in good condition can help extend the life of your vehicle and keep you safe on the roads.
Does Minimum Coverage Car Insurance Cover a Driver and Vehicle When They Are in Another State?
Car insurance policies are typically valid anywhere in the United States. Some policies are also honored if drivers venture into Canada. A minimum policy must meet the coverage requirements in the state where the vehicle is registered.
Do Vehicle Insurance Agencies Offer Discounts?
Some vehicle insurance providers offer discounts. Although you’ll have to check with each agency, some typical discounts include senior citizen discounts, multiple vehicle discounts, and even an “honor roll” discount for young drivers. Some agencies provide discounts if you bundle car insurance and home insurance together. Certain professions, such as those who are civil servants, including officers, firefighters, and teachers, can often get additional discounts. Military families may also qualify for discounts.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
