Car insurance changes for 2025

Most states require drivers to carry a minimum amount of liability insurance to cover bodily injuries and property damage caused in an accident. However, with rising repair and medical costs, the minimum isn’t enough to cover most claims. In response, California, North Carolina, Virginia, and Utah are increasing liability limits in 2025.

Drivers in states with new insurance limits can expect increased rates, especially in California, where limits have doubled. Drivers in Utah may only see a nominal increase since liability limits are only slightly increasing.

Drivers with more than minimum coverage are unlikely to see a difference in their car insurance rates.

California car insurance changes in 2025

Drivers can expect a California auto insurance rate increase in 2025. California requires drivers to carry at least a minimum amount of liability car insurance, and those minimums increase on Jan. 1, 2025.

In 2024, California car insurance minimums included:

  • $15,000 in bodily injury for one person
  • $30,000 for bodily injuries to multiple people
  • $5,000 for property damages

Starting Jan. 1, 2025, California minimum insurance requirements increase to:

  • $30,000 in bodily injury for one person
  • $60,000 for bodily injuries to multiple people
  • $15,000 for property damages

The car insurance increase in California is the first in almost 60 years. However, drivers who already have more than minimum coverage will not see a change in coverage.

North Carolina car insurance changes in 2025 

A car insurance increase is on the way in North Carolina. Effective July 1, 2025, North Carolina's minimum insurance requirements will increase significantly. Although this is the first increase in minimum coverage in over 20 years, the new minimum coverage limits are among the highest in the country.

Previous North Carolina car insurance minimums included:

  • $30,000 in bodily injury for one person
  • $60,000 for bodily injuries to multiple people
  • $25,000 for property damages

Starting July 1, 2025, North Carolina minimum insurance requirements increase to:

  • $50,000 in bodily injury for one person
  • $100,000 for bodily injuries to multiple people
  • $50,000 for property damages

“The new automobile liability insurance minimums, which go into effect July 1, 2025, will not affect motorists who already had this higher amount of coverage. Because of the increased cost of car repairs, many automobile insurance agents have advised their clients to increase their coverage to protect themselves from potential liability,” says Barry Smith, deputy director of communications for the North Carolina Department of Insurance. 

“We recommend that motorists carrying the current minimum coverage contact their agent so they can prepare for potential premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. increases when this new law takes effect in July,” he says.

North Carolina's new car insurance law for underinsured motorist coverage will also go into effect. Previously, if an underinsured driver injured you, your insurance company did not have to pay out all your underinsured coverage.

For example, let’s say you are hit by a driver with only $30,000 in bodily injury liability. You carry $100,000 in underinsured motorist coverage, and your medical bills are $100,000. Before 2025, you would receive $30,000 from the other driver’s insurance and only $70,000 from your insurer, to a total of $100,000. However, under the new changes, you would receive $30,000 from the other insurer and $100,000 from your insurer, a total of $130,000.

While these changes offer drivers more protection, drivers can expect a North Carolina auto insurance rate increase in 2025. 

Virginia car insurance changes in 2025 

Virginia's new car insurance laws have significantly affected drivers. Until July 1, 2024, Virginia drivers could choose not to carry car insurance by paying a $500 fee. Then, a new law requiring all Virginia drivers to carry at least a minimum liability coverage went into effect, removing the option to go without insurance.

Virginia's minimum car insurance coverage will increase on Jan. 1, 2025. These coverage increases offer drivers more protection if they are injured or their property is damaged in an accident.

Previous Virginia car insurance minimums included:

  • $30,000 in bodily injury for one person
  • $60,000 for bodily injuries to multiple people
  • $20,000 for property damages

Starting Jan. 1, 2025, Virginia minimum insurance requirements increase to:

  • $50,000 in bodily injury for one person
  • $100,000 for bodily injuries to multiple people
  • $25,000 for property damages

With these changes, drivers can anticipate a Virginia auto insurance rate increase in 2025, especially if they previously went without coverage.

Utah car insurance changes in 2025

By comparison, Utah's new car insurance law regarding minimum required coverage includes minor changes. There is only a slight increase in bodily injury and property damage liability limits in Utah.

In 2024, Utah car insurance minimums included:

  • $25,000 in bodily injury for one person
  • $65,000 for bodily injuries to multiple people
  • $15,000 for property damages

Starting Jan. 1, 2025, Utah minimum insurance requirements increase to:

  • $30,000 in bodily injury for one person
  • $65,000 for bodily injuries to multiple people
  • $25,000 for property damages

Utah drivers must also carry at least $3,000 in personal injury protectionPersonal injury protection (PIP) pays for your medical, hospital and funeral expenses resulting from a car accident, regardless of who's at fault.. As a no-fault state, each driver’s insurance company covers their injuries no matter who caused the accident.

Although drivers can expect a Utah auto insurance rate increase in 2025, increases should be slight as limits did not change significantly. 

Will car insurance rates increase with the changes?

Drivers in affected states with minimum coverage will likely see an increase in their car insurance rates. Although some limit increases are minor, such as in Utah, others, like North Carolina, have significant increases. More coverage equals higher rates, although increases will vary.

However, your rates are unlikely to be affected if you already carry more than the minimum coverage.

PEOPLE ASK

Is car insurance going up in California?

For drivers in California, new car insurance law requires an increase in liability coverage. The new mandatory minimum liability coverage goes from 15/30/5 to 30/60/15 and will likely increase car insurance rates.

Why are states changing their auto insurance limits?

Insurance costs and claims payouts have increased dramatically in the last few years. Rates have increased significantly to keep up with claims-related expenses. However, many states have not increased the minimum coverage amounts in decades. 

Some states are trying to keep up with rising costs by requiring drivers to carry increased minimum liability coverage.

Reasons for increasing liability coverage limits include:

  • Increased repair costs. As vehicle technology advances, the cost of repairs or replacement increases. Instead of just replacing a bumper, advanced systems such as lane-keeping assist and adaptive cruise control may also have to be replaced.
  • Increased medical costs. Emergency room visits, ambulance rides, and prescription costs have skyrocketed. Loss of wages, doctor visits, and diagnostic testing also increase medical costs.
  • Decreased debt. If you don’t carry enough car insurance to cover injuries and damages that you cause, you may have to pay out of pocket. Increased liability limits mean the insurance company pays more, so you pay less.

How do I increase my car insurance limits to the new minimum?

Your insurance company will automatically increase coverage limits in California, North Carolina, Virginia and Utah when your policy renews after Jan. 1, 2025, or July 1, 2025, in North Carolina. The new minimums will be included if you obtain a new car insurance policy.

If you want to increase your liability limits before renewal, contact your car insurance company to make changes to your current policy.

States with minimum car insurance requirement changes: FAQ

Will the car insurance limit changes affect a non-owners policy?

Non-owner car insurance provides at least the minimum required liability coverage when you drive a vehicle you don’t own. The coverage limit changes will affect a non-owner policy to accommodate the increased liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people. required.

Will the changes to car insurance limits benefit me?

Increased liability limits are beneficial because they provide more protection for you and your vehicle in an accident. With the increased costs of repairs and medical expenses, higher limits mean fewer out-of-pocket expenses since insurance covers more costs.

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