I started Insurance Blog by Chris™ because I have a passion for insurance. Here at the blog, our job is to educate and inform people about the best insurance for them. Since then, we have grown into national brands with a large team of researchers helping people understand all forms of insurance.

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Mar 19, 2021

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The quick answer is yes.

You need car insurance in America.

Not only do you need it, but having the right insurance and saving on your premiums are two of the most important financial decisions you can make in your life.

Click here to see the 10 best car insurance companies for you. 

We’ve done more than 2,000 hours of research in car insurance, so let’s dig a little deeper.

US Car Insurance Facts

  • Car insurance is regulated at the state level
  • Every state with the exception of New Hampshire and Virginia mandate car insurance (minimum amounts)
  • Minimum requirements vary per state
  • Most states require drivers to have proof of insurance at all times
  • About 50% of states require proof of insurance when registering a vehicle
  • Most states do set a minimum amount of liability protection
  • Each state has a penalty for driving uninsured
  • The penalty varies by state and can be as high as $5,000 or more
  • A few states accept different securities from traditional insurance, such as a bond or deposit or fees (we will review these states later in this post)

Huh? What is liability protection?

Let’s find out.

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Types of Automobile Coverage

car insurance in the US

The following are the types of automobile insurance coverage offered by insurers including liability insurance.

Keep in mind that each coverage is priced separately, each can have different coverage amounts, and some may carry a separate deductible.

Bodily Injury Liability

This covers you if you cause bodily injury to someone else. It also covers lawsuits and loss of income of the injured individual.

Personal Injury Protection (PIP)

This coverage pays for the medical treatments of injuries you cause to someone else as a result of an accident

Property Damage Liability

This covers damage you may cause to someone else’s property. That usually applies to someone else’s car, but it can also cover damage to a building or other structure you hit with your car

Collision

This covers damage to your vehicle from a collision with another car or object, even potholes. It carries a separate deductible from your policy.

Comprehensive

This covers you for loss due to theft or damage caused by a non-collision event such as fire, falling objects, hail, flood, among others. This coverage is sold separately with a separate deductible.

Uninsured or Underinsured Motorist Coverage

This covers you an uninsured or underinsured driver hits you

Note: Collision and comprehensive insurance is usually optional but may be required by some lenders especially if you are leasing a vehicle.

We recommend that you make sure you are getting the best coverage for you and your family members.

In other words, we do not recommend that you only purchase your state’s minimum car insurance amounts but the coverage you require.

That may include collision and comprehensive coverage as well as higher amounts of liability coverages.

Let’s look by state, shall we?

State Specific Regulations

As we said before, each state has its car insurance mandates.

It is best to check with your state’s consumer protection office to find out your state’s requirements.

With that said, let’s go over the few states that either has no insurance mandate or allow alternatives to traditional insurance.

New Hampshire Auto Insurance

 

Not mandated!

 

New Hampshire

Having car insurance is not a mandate in New Hampshire, but most residents do purchase some form of car insurance.

Click here to see the 10 best car insurance companies for New Hampshire drivers. 

Instead, the state requires all drivers to be financially responsible for any accidents or injuries that they cause while driving in the state.

New Hampshire’s minimum insurance requirements (if you choose to purchase):

  • Bodily Injury Liability: $25,000 / $50,000 Limit
  • Property Damage Liability: $25,000 Limit
  • Uninsured/Underinsured Bodily Injury: $25,000 / $50,000 Limit
  • Medical Payments: $1,000 Limit

Note: Most insurers will encourage you to purchase additional coverage, so you are adequately protected. We recommend the same.

Virginia Auto Insurance

 

Pay a Fee!

 

virginia car insurance

The state of Virginia allows you to pay a $500 fee to register an uninsured car, along with other standard registration fees.

The fee, which is valid for a 12-month period, is not insurance coverage.

Click here to see the 10 best car insurance companies for Virginia drivers. 

If you are involved in an accident, and you are at fault, then you are responsible for covering the bodily injury and property damage.

Virginias minimum insurance requirements (if you choose to purchase):

  • Bodily Injury/death of one person: $25,000
  • Bodily Injury/death of two or more persons: $50,000
  • Property damage: $20,000

Mississippi Auto Insurance

 

Post a Bond or Security Deposit

 

Like many states, Texas does have a compulsory automobile insurance law system.mississippi auto insurance

You can meet the state’s requirement through one of the following:

  • Buy Insurance: the state’s minimum auto insurance coverage includes:
    • Liability, single accident: $25,000 per person
    • Bodily injury, per accident: $50,000
    • Property Damage, per accident: $25,000
  • Post a bond with the state for the above-listed amounts.
  • Make a cash or security deposit with the state.

Most residents purchase car insurance instead of choosing one of the alternatives both of which are big cash layouts!

Note: Many other states offer cash deposits or bonds as alternatives to traditional automobile insurance. Be sure to check with your state’s DMV to see if you live in one of them!

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Populated States

As of 2016, California, Texas, and Florida are the three most populated states in the country.

California: 39 million and more

The state’s minimum automobile insurance amounts are as follows:

  • Bodily injury liability coverage: $15,000, $30,000 per accident
  • Property damage liability coverage: $5,000
  • Uninsured motorist property damage:  $3,500

Click here to see the 10 best car insurance companies for Californians. 

Texas: 27 million plus

The state’s minimum automobile insurance amounts are as follows:

  • Bodily Injury, per person: $30,000
  • Bodily Injury, per accident: $60,000
  • Property damage, per accident: $25,000

Click here to see the 10 best car insurance companies for Texas.

Florida: 20 million strong

The state’s minimum automobile insurance amounts are as follows:

  • Personal Injury Protection (PIP): $10,000
  • Property Damage, per accident: $10,000

Click here to see the 10 best car insurance companies for Florida drivers. 

Note: California and Texas both allow bonds or cash security deposits as alternatives to traditional car insurance!

Regardless of where you live in the U.S., check with your DMV office to get more details on your state’s automobile insurance requirements.

We also recommend you shop around and compare auto insurance providers licensed in your state!

Optional Coverages

Like with homeowner’s insurance, we can assume what is and isn’t covered under our auto insurance policy.

Rental Car Insurance

Before you rent a car, check it to see if your benefits extend to cover a rental car.

We know.

Reading your policy is not exciting. As an alternative, call your insurance agent or provider.

Bottom Line: Most car insurance policies do extend coverage when you rent a car in the 50 United States.

What you don’t want to do is end up paying double the amount of insurance.

Who needs that?!

Here are some circumstances where you DO want to purchase the rental car insurance:

  • You do not have collision insurance on your vehicle
  • You do not have automobile insurance
  • You do not own a car and therefore do not have auto insurance

Credit Cards and Auto Insurance

Who knew?

Did you know that many credit cards offer car insurance as a perk to its best customers?

Yes!

This can save you a lot of money when renting a car either in the United States or while you are traveling say in Mexico or Canada.

Check with your credit card companies to see if any of them offer this coverage and if so where (the U.S. only or abroad).

Note: You must decline the rental company’s collision coverage for the credit card coverage to kick in.

We hope this post has shed some light on car insurance in America.

Happy and safe driving!