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Understanding minimum car insurance requirements

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Most states mandate that you carry automobile insurance and have laws outlining the minimum amount of liability coverage you must purchase. This is the bare-bones coverage you need to drive legally.

Your state minimum liability requirements don't pay for your injuries or damage to your own car. Liability car insurance covers damage you cause to others and their property. If you want coverage for your vehicle, you need to add collision and comprehensive coverage to your car insurance policy.

What do those three auto liability insurance numbers mean?

Liability car insurance coverage is typically written out like this, for example, for North Carolina: 30/60/25. That means the minimum liability limits are:

  • $30,000 for injuries to one person in an accident
  • $60,000 for all injuries in an accident
  • $25,000 for property damage in one accident

Be sure to remember that  liability insurance  doesn't pay for damages to your own car. It also doesn't pay for your own medical expenses if you're injured in an accident. Instead, liability insurance covers damage you cause to other vehicles and property, as well as medical expenses for those you injure.

State minimum requirements are often not enough to cover even minor accidents. The Insurance Information Institute recommends that you carry at least $100,000 of bodily injury protection per person, $300,000 per accident and $100,000 for property damage (known as 100/300/100). 

Typically, increasing your liability limits doesn't cost much more. Consider the following, based on Insurance.com’s analysis of rates from up to six major insurers for nearly all ZIP codes:

  • The nationwide average cost for state minimum liability coverage is $526
  • Increasing that coverage to 50/100/50 averages only $561. So, you only pay another $35 a year by increasing your coverage.
  • If you increase that to 100/300/100 with comprehensive and collision and a $500 deductible, that average goes up to $1,350, which is $824 more per year or $69 per month.

Minimum liability car insurance requirements by state

StateMinimum car insurance limits
AlabamaLiability: 25/50/25
AlaskaLiability: 50/100/25
ArizonaLiability: 25/50/15
ArkansasLiability: 25/50/25
CaliforniaLiability: 15/30/5
ColoradoLiability: 25/50/15
ConnecticutLiability: 25/50/25
UM/UIM BI: 20/40  
DelawareLiability: 25/50/10
PIP: 15/30
District of Columbia Liability: 25/50/10
UM BI: 25/50
UMPD: $5,000

Liability: 10/20/10
PIP: $10,000
BI liability not required by Florida but many carriers require 10/20

Georgia Liability: 25/50/25
Hawaii Liability: 20/40/10
PIP or PPO: $10,000
IdahoLiability: 25/50/15
Illinois Liability: 25/50/20
UM BI: 25/50
IndianaLiability: 25/50/25
IowaLiability: 20/40/15
Kansas  Liability: 25/50/25
UM/UIM BI: 25/50
PIP: $4,500 medical/$900 work loss
KentuckyLiability: 25/50/25
PIP: $10,000  
LouisianaLiability: 15/30/25
MaineLiability: 50/100/25
UM/UIM BI: 50/100
Medical payments: $2,000
Maryland Liability: 30/60/15
UM/UIM BI: 30/60
UMPD: $15,000
PIP $2,500
Massachusetts Liability: 20/40/5
UM/UIM BI: 20/40
PIP: $8,000
MichiganLiability: 50/100/10
PIP: 6 choices $50,000 to unlimited medical
PPI: $1,000,000
Minnesota Liability: 30/60/10
UM/UIM BI: 25/50
PIP: $40,000
MississippiLiability: 25/50/25
Missouri Liability: 25/50/10
UM BI: 25/50
MontanaLiability: 25/50/20
Nebraska Liability: 25/50/25
UM/UIM BI: 25/50
NevadaLiability: 25/50/20
New Hampshire*Liability: 25/50/25
UM/UIM BI: 25/50
Medical payments: $1,000
*Insurance not mandatory in New Hampshire
New Jersey Liability: 15/30/5 (standard policy)
UM/UIM BI: 15/30
UMPD: $5,000
PIP: $15,000
New Mexico Liability: 25/50/10
New YorkLiability: 25/50/10
UM BI: 25/50
PIP: $50,000
North Carolina Liability: 30/60/25
UM BI: 30/60
UMPD: $25,000
North Dakota Liability: 25/50/25
UM/UIM BI: 25/50
PIP: $30,000
OhioLiability: 25/50/25
OklahomaLiability: 25/50/25
Oregon Liability: 25/50/20
UM BI: 25/50
PIP: $15,000
PennsylaniaLiability: 15/30/5
First party benefits (PIP): $5,000
Rhode IslandLiability: 25/50/25
South CarolinaLiability: 25/50/25
UM BI: 25/50
UMPD: $25,000
South Dakota Liability: 25/50/25
UM/UIM BI: 25/50
TennesseeLiability: 25/50/15
Texas Liability: 30/60/25
Utah Liability: 25/65/15
PIP: $3,000
Vermont Liability: 25/50/10
UM/UIM BI: 50/100
UMPD: $10,000
Virginia Liability: 25/50/20
UM/UIM BI: 25/50
UMPD: $20,000
WashingtonLiability: 25/50/10
West VirginiaLiability: 25/50/25
UM BI: 25/50
UMPD: $25,000
WisconsinLiability: 25/50/10
UM BI: 25/50
WyomingLiability: 25/50/20

Source: Insurance Information Institute

Key to acronyms:

  • UM: Uninsured motorist coverage
  • UIM: Underinsured motorist coverage
  • UM BI: Uninsured motorist bodily injury coverage
  • UMPD: Uninsured motorist property damage coverage
  • PIP: Personal injury protection
  • PPI: Property protection insurance (applies only to Michigan)
  • BI liability: Bodily injury liability

Understanding auto insurance liability coverage across state lines

What happens if you hold the minimum amount of automobile insurance coverage required in your state and you're involved in an accident in another state that requires higher minimum coverage? Will your auto policy's coverage automatically increase to meet the other state's minimum coverage requirements?

For example, say you live in Ohio and hold the minimum amount of coverage, which is 25/50/25. This means that the minimum liability limits in this state are $25,000 for injuries to one person, $50,000 for all injuries incurred and $25,000 for property damage for one vehicle in an accident. What happens if you then travel to Maine for a vacation (where the limits are 50/100/25) and are involved in an accident that requires higher minimum coverage?

Fortunately, most policies cover an accident in another state that requires higher minimum coverage, says Penny Gusner, senior consumer analyst for Insurance.com. Your policy will typically automatically increase to meet that state's minimum coverage. It's important to read your policy to determine if that is true, she says. Some low-cost policies exclude this "broadening" coverage.

What's the definition of no-fault car insurance?

A dozen states -- including Florida, New Jersey, Kansas, New York, Minnesota and Michigan – have no-fault automobile liability insurance laws. No-fault car insurance limits your ability to sue the other driver in the event of an accident. If your state has a no-fault auto insurance law, your policy must pay medical bills for you and your passengers regardless of who caused the accident.

True no-fault states require drivers to purchase minimum levels of personal injury protection (PIP) coverage. The amount of coverage required varies by state, as does the nature of the coverage. Depending on the state, PIP coverage may reimburse the policyholder for medical and other accident-related expenses as well as lost wages. (See: "Learn about no-fault auto insurance.")

No-fault coverage does not mean that a driver is not found at fault. A driver can still be found at fault and claims places against that person's liability coverage. No-fault is meant to just have those injured in an auto accident turn to their PIP or Medical payments coverage first. You still need to exchange information if in an accident in a no-fault state.

No matter what coverages your state requires, you should examine your needs and buy a policy that is right for you. It may be a state minimum one as that is all you could afford, or if you have assets to protect and a car you want covered, then raise your liability limits and add comp and collision to your vehicle. Also, shop around with multiple car insurance companies. That is the only way to get the best priced policy.