In 48 of 50 states, you are required by law to have auto insurance.

What Auto Insurance Requirements Does Your State Have?

When trying to score really cheap auto insurance, you may be searching for the minimum state required by law so you can determine what type and how much auto insurance you really need.

Stop right there. Many people fail to realize is that what type and how much auto insurance you need has little to do with what is required by law.

Required vs. Right

Being smart about deciding on what kind of auto insurance you need and how much is not only the key to getting truly really cheap auto insurance, but also ensuring that you protect those savings in the long run. What brings you to that conclusion isn’t going by the specific legal requirements set by your state but rather by taking a look at your car, your assets and your driving history.

Bare Minimum

If you have no assets, drive an old clunker, have health and disability insurance and (if you support a family) carry a life insurance policy, the bare minimum auto insurance requirements may be for you.

In general, states require auto insurance liability coverage. The mentality behind requiring liability insurance is to make sure that even if you don’t mind being out on the road without protecting yourself, you can at least can cover the damages you cause to somebody else.

Legal requirements are very different from state to state.

Laws of Liability

Generally speaking, states fall into one of two categories:
Traditional tort liability: No restrictions on lawsuits. If there’s disagreement on fault and who pays for what, take it to court and settle it there. If you’re found at fault, you can be sued by the other driver and their passengers for the pain and suffering and out of pocket medical expenses.
No-Fault: Restricts the right to sue. Regardless of who caused the crash, your insurance company pays for your damages (up to a certain limit set in your policy). You can only take it to court when injuries and damages meet special conditions set by law. These conditions are called tort liability threshold and come in two types.

• Verbal Threshold: Conditions described in the law books verbally such as “death or significant disfigurement.”
• Monetary Threshold: Dollar amounts of medical bills.

As of October 2008, 12 states and Puerto Rico have no-fault auto insurance laws.

• Florida
• Michigan
• New Jersey
• New York
• Pennsylvania
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Minnesota
• North Dakota
• Utah

You Choose States

Even though New Jersey, Pennsylvania and Kentucky are listed above—if you are buying car insurance in those states you actually have a choice as to whether you go with no-fault of the traditional tort system.

Add-on States

In add-on states, drivers will be covered by their own insurance company just like they do in no-fault states—but there are no restrictions on law suits.

These are not true “no-fault” law states. In these states a provision to have your insurance pick up the tab regardless of fault was added on to the traditional tort liability system. But coverage may not be mandatory and the benefits may be lower than in true no-fault states.

• Arkansas
• Delaware
• Maryland
• New Hampshire
• Oregon
• South Dakota
• Texas
• Virginia
• Washington
• Wisconsin

STATE AUTO INSURANCE LAWS GOVERNING LIABILITY COVERAGE

First-party benefits
(PIP)
Restrictions on lawsuits
Thresholds for lawsuits

“True”
no-fault

Compulsory
Optional

Yes

No

Monetary

Verbal

Florida X X X
Hawaii X X X
Kansas X X X
Kentucky X X X (1) X (1)
Massachusetts X X X
Michigan X X X
Minnesota X X X
New Jersey X X X (1) X (1), (2)
New York X X X
North Dakota X X X
Pennsylvania X X X (1) X (1)
Puerto Rico X X X
Utah X X X

Add-on
Arkansas X X
Delaware X X
D.C. X X (3) X (3)
Maryland X X
New Hampshire X X
Oregon X X
South Dakota X X
Texas X X
Virginia X X
Washington X X
Wisconsin X X

(1) “Choice” no-fault state. Policyholder can choose a policy based on the no-fault system or traditional tort liability.
(2) Verbal threshold for the Basic Liability Policy, the Special Policy and the Standard Policy where the policyholder chooses no-fault. The Basic and Special Policies contain lower amounts of coverage.
(3) The District of Columbia is neither a true no-fault nor add-on state. Drivers are offered the option of no-fault or fault-based coverage, but in the event of an accident a driver who originally chose no-fault benefits has 60 days to decide whether to receive those benefits or file a claim against the other party.

PIP=Personal injury protection.
Source: American Insurance Association.

Everybody Else

The remaining 28 states that don’t have “No-Fault” systems fall unter the traditional tort liability system. In these states, there are no restrictions on lawsuits:

• Alabama
• Alaska
• Arizona
• California
• Colorado
• Connecticut
• Georgia
• Idaho
• Illinois
• Indiana
• Iowa
• Louisiana
• Maine
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Mexico
• North Carolina
• Ohio
• Oklahoma
• Rhode Island
• South Carolina
• Tennessee
• Vermont
• West Virginia
• Wyoming

What’s What and Where?

Below you will find a chart detailing the specific types of liability coverage required by your state and the minimum limits you must purchase by law.

Liability coverage is split into three numbers. When looking at the limits (the numbers separated by backslashes) – The first two numbers refer to bodily injury coverage while the third number refers to property damage coverage.
For example: 15/30/10 means $15,000 coverage for one person injured in an accident, $30,000 coverage for all persons injured, and $10,000 coverage for property damage.

State Liability required? Liability minimums (in thousands of dollars) PIP required? No-fault state? Uninsured motorist coverage required?

Alabama Yes, 25/50/25 No No No
Alaska Yes, 50/100/25 No No No
Arizona Yes, 15/30/10 No No No
Arkansas Yes, 25/50/25 Yes No No
California (1) Yes, 15/30/5 No No No
Colorado Yes, 25/50/15 No No No
Connecticut Yes, 20/40/10 No No Yes
Delaware Yes, 15/30/10 Yes No No
Florida (2) No, 10/20/10 Yes Yes No
Georgia Yes, 25/50/25 No No No
Hawaii Yes, 20/40/10 Yes Yes No
Idaho Yes, 25/50/15 No No No
Illinois Yes, 20/40/15 No No Yes
Indiana Yes, 25/50/10 No No No
Iowa Yes, 20/40/15 No No No
Kansas Yes, 25/50/10 Yes Yes Yes
Kentucky Yes, 25/50/10 Yes Yes No
Louisiana Yes, 10/20/10 No No No
Maine (3) Yes, 50/100/25 No No Yes
Maryland (4) Yes, 20/40/15 Yes No Yes
Massachusetts Yes, 20/40/5 Yes Yes Yes
Michigan Yes, 20/40/10 Yes Yes No
Minnesota Yes, 30/60/10 Yes Yes Yes
Mississippi Yes, 25/50/25 No No No
Missouri Yes, 25/50/10 No No Yes
Montana Yes, 25/50/10 No No No
Nebraska Yes, 25/50/25 No No No
Nevada Yes, 15/30/10 No No No
New Hampshire No, 25/50/25 No No Yes
New Jersey (5) Yes, 15/30/5 Yes Yes Yes
New Mexico Yes, 25/50/10 No No No
New York (6) Yes, 25/50/10 Yes Yes Yes
North Carolina Yes, 30/60/25 No No No
North Dakota Yes, 25/50/25 Yes Yes Yes
Ohio Yes, 12.5/25/7.5 No No No
Oklahoma Yes, 25/50/25 No No No
Oregon Yes, 25/50/10 Yes No Yes
Pennsylvania Yes, 15/30/5 Yes Yes No
Rhode Island (2) Yes, 25/50/25 No No Yes
South Carolina Yes, 25/50/25 No No Yes
South Dakota Yes, 25/50/25 No No Yes
Tennessee (2) Yes, 25/50/10 No No No
Texas Yes, 25/50/25 No No No
Utah (2) Yes, 25/50/15 Yes Yes No
Vermont Yes, 25/50/10 No No Yes
Virginia Yes, 25/50/20 Yes No Yes
Washington Yes, 25/50/10 No No No
Washington D.C. Yes, 25/50/10 No No Yes
West Virginia Yes, 20/40/10 No No Yes
Wisconsin No, 25/50/10 No No Yes
Wyoming Yes, 25/50/20 No No No

Source: Insurance Information Institute

• Low-cost policy limits for drivers in the California Automobile Assigned Risk Plan are 10/20/3.
• Instead of policy limits, policyholders can satisfy the requirement with a single combined policy. Amounts vary by state.
• In addition, policyholders must carry $1,000 for medical payments.
• PIP may be waived for the policyholder but it is compulsory for passengers.
• Basic policy (optional) limits are 10/10/5. UM/UIM coverage is not available under a basic policy but UIM is required under a standard policy.
• In addition, policyholders must have 50/100 for wrongful death coverage.