Q

Do I need car insurance?

A

Yes, car insurance is legally required in nearly every state. However, the type and amount of insurance you need depends on where you live.

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In nearly every state you must have car insurance to drive legally. Besides New Hampshire and Virginia, where coverage is optional, states require drivers to carry some form of auto insurance or risk fines, license suspension, or jail time.

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Bodily injury and property damage liability coverage is almost universally required by law. Drivers may also be legally required to carry personal injury protection and uninsured motorist protection, or waive their coverage in writing. 

Key Takeaways

  • You need car insurance in every state except for New Hampshire and Virginia, but the type of coverage and the amount you need depend on where you live.

  • You're usually required to have bodily injury and property damage liability coverage, but in some states you may also have to purchase personal injury protection and uninsured motorist protection.

  • It's a good idea to get more liability insurance than what's legally required in your state, and adding more is relatively inexpensive.

  • While it's not legally required in any state — though is required by lenders and lessors — adding comprehensive and collision coverages to your policy is a good idea for most drivers.

What car insurance do I need?

The type of car insurance you need depends on where you live. In most states drivers are required to carry liability insurance. There are two types of liability coverage: bodily injury and property damage liability. One covers the cost of injuries you’re responsible for after a car accident and the other covers the cost of property damage you’ve caused, like if you total someone else’s car or crash into their fence.

Besides liability coverage, drivers may have to purchase personal injury protection (PIP), which is required in no-fault states, and uninsured/underinsured motorist coverage. In some states drivers can waive these types of coverage in writing.

If you don't want to get car insurance, some states will allow you to insure yourself. You may deposit a minimum amount of cash or post a surety bond to prove that you have enough money to cover expenses after an accident. It's usually easier and cheaper to pay for insurance conventionally, though. Self-insuring yourself means committing to a large upfront cost, usually tens of thousands of dollars — more than what you'd pay after years for insurance.

→ Learn about the insurance coverage needed in your state

Is it illegal to drive without insurance?

Yes, it's illegal to drive without insurance. If you're caught driving uninsured, you could face a series of legal penalties depending on where you live, including:

  • Fines

  • A suspended license

  • Possible jail time 

If your license is suspended, you will have to pay a fine to reinstate it. You will also pay higher auto insurance premiums if you're caught, since you will be viewed as a high-risk driver.

Being involved in an accident as an uninsured driver is particularly dangerous. In addition to facing possible fines, a license suspension, and jail time, you will also be liable for the cost of the other driver's injuries and property damage if you're responsible for the accident. 

After a serious accident, you could face mounting expenses if the other driver doesn't have uninsured motorist protection, and may even have to declare bankruptcy.

Do you need insurance for a new car?

You can't drive a new car away from a dealership without having auto insurance. Fortunately, you can compare car insurance quotes and purchase coverage for a vehicle ahead of time. If you already have insurance and your company offers a grace period for new vehicles, you can add your new car to your existing policy after you drive it home.

→ Learn more about what happens if you drive without car insurance

How much liability insurance do I need?

You're not required to get any liability insurance in New Hampshire or Virginia. New Hampshire recommends that drivers get insurance coverage, but as long as you don't have to get an SR-22 or FR-44 due to a history of accidents, DUI/DWIs, or a suspended license you don't have to carry proof of insurance.

Auto insurance in Virginia isn't mandatory, either. Drivers can pay $500 to the state's Department of Motor Vehicles to legally operate a vehicle at their own risk. However, if you opt not to pay this fee, you must get a policy with $30,000 of bodily injury coverage per person and $60,000 per accident, along with $20,000 of property damage coverage per accident.

While drivers are required to carry at least $10,000 of property damage liability coverage in Florida, it's one of three states that doesn't require any bodily liability coverage. However, drivers required to file an SR-22 or FR-44 form do have to buy bodily injury coverage.

What other kinds of insurance do you need?

Besides liability insurance, states can require drivers purchase a minimum amount of coverage for medical expenses. Personal injury protection (PIP) and medical payments coverage pay for medical expenses that are caused by an accident. Personal injury protection is required in no-fault states — where injured drivers make claims with their own providers after an accident, regardless of fault. 

Personal injury protection (or MedPay in Maine) are required in the following states:

  • Delaware

  • Florida

  • Hawaii

  • Kansas

  • Maine

  • Massachusetts

  • Michigan

  • Minnesota

  • New Jersey

  • New York

  • North Dakota

  • Oregon

  • Pennsylvania

  • Utah

Some states also require uninsured and underinsured motorist protection. If you're involved in an accident with another driver who doesn't have enough coverage to pay for the damage they were responsible for, your un/underinsured motorist policy would help you cover your expenses.

You may also have to get comprehensive and collision coverage if your car is leased or financed with a car loan. These forms of insurance pay for damage to your own car from an at-fault accident as well as damage that's not caused by a collision with another driver — including from weather, animals, vandalism, and falling objects.

Finally, you may also have to get gap insurance coverage if you're leasing or paying off your car. After a total loss, gap insurance covers the difference between money you owe on a lease or loan and the amount an insurance company pays out for the loss.

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While you only need enough car insurance to meet your state's minimum required coverage limits, Policygenius recommends you get more insurance protection if you can afford it. Typically, we recommend at least:

  • $100,000 of bodily injury coverage per person/$300,000 per accident

  • $100,000 of property damage liability

  • Matching level of uninsured motorist protection

It's a good idea for many drivers to add comprehensive and collision coverage, too, especially if your car is new or its value is greater than your deductible amount. 

When making decisions about how much coverage to buy, you should ask yourself whether you could afford to replace your vehicle if it were completely totaled. If you couldn't, it's best to consider getting more coverage. It's generally cheaper to buy more insurance than it is to replace your car.

→ Learn about the benefits of a full-coverage auto insurance policy

Can you ever drive without insurance?

While you can't drive without auto insurance, there are special cases when you may already be covered by an existing form of coverage or may not always need to purchase a separate policy, such as if you:

  • Are a licensed driver but don't own a car: You don't need your own insurance policy if you don't own your own car. Even if you occasionally use rental or carsharing services, these companies have to insure their vehicles up to the minimum amount required by law. However, a non-owner policy may be a better option for basic protection if you ever plan to own a vehicle again as you'll likely face higher rates in the future because of a lapse in coverage.

  • Borrow someone else's car: When driving someone else's car, damage is already covered by that vehicle's auto insurance (although sometimes up to a limited amount). Remember, car insurance follows the car, not the driver. If you're a frequent driver of another person's car, though, getting a non-owner policy can decrease the risk of having to use the car's owner's policy after an accident. 

  • Own a car that you don't drive: You don't need insurance for a car you don't drive, but getting car-storage insurance is a better option in most cases — especially if you plan to drive again in the future. Your vehicle would still be protected from damage like vandalism, weather, and falling objects. You'd also be able to avoid a lapse in coverage and the higher-than-average premiums that follow.

Frequently Asked Questions

Why is car insurance mandatory?

Requiring car insurance helps protect drivers from unforeseen expenses that crashes can cause. By mandating a minimum coverage level, states ensure that drivers won't have to bear the entire cost of recovering from injuries and replacing damaged or destroyed property.

What information is needed to buy car insurance?

If you don't already have auto insurance, you can get quotes and purchase coverage as long as you have the names and ages of all of a car's drivers, vehicle information numbers (VIN) of the cars you want to insure, and your address. You may also be asked about how often you drive and details about your insurance history.

What are typical amounts of auto insurance coverage?

In most states drivers have to purchase at least $25,000 of bodily liability insurance for an individual that's injured in a crash, or $50,000 for a single accident. Additionally, drivers are often required to get $15,000 to $25,000 of property damage coverage. Fewer than half of states require personal injury protection or uninsured motorist coverage. Where mandated, however, at least $10,000 of PIP and enough uninsured motor vehicle coverage to match up with your liability coverage is usually required.

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