Driving requires liability insurance to cover damages you may cause to others, and the amount of coverage you need depends on your state and whether you own, lease, or finance your car. If you’re leasing or still making payments, you’ll generally need higher levels of insurance than if you own your vehicle outright.
Why is Car Insurance Mandatory?
Car insurance is mandatory in most U.S. states to ensure drivers can cover costs if they cause an accident. This coverage protects other parties on the road and reduces the financial burden of crashes on individuals and the public.
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Reviewed By Mark Friedlander
Edited By Beth Swanson
Is car insurance required in the United States?
Car insurance is sometimes expensive, often confusing, and almost always mandatory in the U.S. Car insurance laws are set and enforced at the state level, and 49 of the 50 states in America require all drivers to carry an active car insurance policy. New Hampshire is the only state in which you are not legally required to have car insurance, as long as you can show proof of financial responsibility.
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Why is auto insurance required?
The primary reason car insurance is required is because of your liability, i.e., responsibility, for any damage you cause. Although you may carry optional comprehensive and collision coverage to cover your vehicle, the coverages required by most states' laws are bodily injury and property damage insurance. These coverages — through state-specific coverage limits — provide financial relief for victims of damages you cause in an accident. Since your vehicle has the potential to cause physical or material harm, you need to carry enough insurance to cover the costs of these damages.
To legally register and drive your vehicle, you need to maintain at least your state's minimum level of liability insurance. If your vehicle is leased or financed, you may need to go above and beyond, carrying comprehensive and collision coverage with low deductibles and gap insurance. This is because the third party — usually your dealership or bank — wants to protect its investment with a higher level of coverage.
The only state in which car insurance is not required is New Hampshire. New Hampshire allows you to forgo liability insurance if you can prove you’re financially able to pay for the damages you might cause in an accident. However, you are still responsible for any and all damage you cause — so car insurance is still a sound investment.
Car Insurance Rates by State
Use The Zebra to find and compare auto insurance rates by state.
How much car insurance is mandatory?
If your vehicle is legally registered and will be driven on public roads, you need to carry your state’s minimum liability coverage. Because car insurance is regulated at the state level, the best way to confirm requirements is checking with your state’s insurance department.[1]
Some states require more comprehensive insurance coverage than others. No-fault states require higher levels of coverage. These states require every driver to file a bodily injury claim with their insurance company after an accident, which raises insurance costs.
No-fault states require you to carry Personal Injury Protection (PIP) coverage as well as bodily injury and property damage coverages. PIP covers the cost of medical bills for you and your passengers in the event of an accident. The level of required PIP coverage varies by state.
Comprehensive Insurance Claims
A comprehensive claim raises auto insurance rates by $5 per month. Learn more about how to reduce those costs in the event of a claim.
How much will insurance cost in my state?
There are many factors that go into an insurance rate: credit, driving history, the specific vehicle - and, of course, where you live. Just as rates for city residents vary from the rates in rural areas, insurance premiums can change from one zip code to the next, as well as from one state to another.
Your best option for finding affordable insurance that meets your needs is to compare multiple companies  and quotes to make an informed decision. The table below outlines the average cost of insurance by state per month and annually, for both full coverage and the minimum required liability coverage.
Source: The Zebra
State required insurance
You need the state-required minimum amount of insurance coverage to legally drive your car on public roads. Insurance benefits both you as well as others that may be involved in an accident involving your car.
Car insurance doesn’t need to be confusing or expensive. If you’re looking for a quote, enter your ZIP code below and get started today. Still looking for more information? See our additional resources below!
Insider knowledge, trusted guidance
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Mandatory car insurance FAQs:
Sources
Insurance Departments. NAIC
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.