Why You Need More Than State Minimum Car Insurance in 2024

State minimum liability coverage doesn’t offer enough financial protection for most drivers, making it a risky choice.
Written by R.E. Fulton
Edited by Jessica Barrett
All states set legal minimum coverage limits for drivers who purchase car insurance. These minimum limits typically cost 33% less than full coverage, but sticking to state minimums comes with serious risks. 
  • State minimum car insurance typically includes bodily injury liability and property damage liability insurance. 
  • Some states require drivers to buy uninsured/underinsured motorist coverage, personal injury protection (PIP), and/or medical payments coverage (MedPay). 
  • State minimum coverage costs an average of $1,510 per year—33% less than full coverage. 
  • Only buying state minimum coverage leaves you open to significant financial and legal risks.

Minimum car insurance required in your state

* Coverage may be rejected in writing. 
** Some drivers may choose a lower level of coverage with the Basic Policy or Special Automobile Insurance Policy. 
*** Drivers who purchase more than the state minimum liability limits must also purchase uninsured/underinsured motorist coverage.  

Understanding your state’s minimum coverage

The most important type of car insurance required by law in nearly every state is
liability car insurance
, which falls into two categories: 
  • Bodily injury liability (BIL):
    If you’re responsible for a car accident that injures someone else, they can file a BIL claim with your insurance company to cover their medical costs. 
  • Property damage liability (PDL):
    If you’re responsible for an accident that damages someone else’s property, including their vehicle, they can file a PDL claim with your insurance company to cover the cost of repairs. 
Basic liability insurance won’t pay for your medical bills or vehicle repairs—it only protects you from lawsuits if you’re at fault in an accident. 
Most states require drivers to carry liability coverage limits of 25/50/25—that is, up to $25,000 for bodily injury to a single person, up to $50,000 for bodily injury from a single accident, and up to $25,000 for property damage costs from a single accident. 
Depending on where you live, your state minimum insurance coverage might also include: 
  • Uninsured motorist coverage:
    If you’re in an accident caused by an uninsured motorist or someone whose liability coverage isn’t enough to cover all your costs, UM/UIM coverage kicks in. In most states that require it, UM/UIM is only available for bodily injury, but a few states require uninsured motorist property damage insurance. 
  • Personal injury protection (PIP):
    No-fault states require all drivers to carry personal injury protection, which pays for medical costs including rehabilitation expenses, funeral benefits, and lost wages for you and your passengers after an accident. 
  • Medical payments (MedPay):
    MedPay is similar to PIP, but it only covers medical costs and not lost wages. It’s required for all drivers in Maine, and for drivers in New Hampshire who choose to buy car insurance. 

Optional types of coverage

Collision coverage
comprehensive coverage
are never required by state law but they’re not necessarily optional coverage. If you have a car loan or lease, your lender will require you to maintain collision and comprehensive coverage until you’ve paid off your vehicle. 

Which states don’t require car insurance? 

All 50 states and Washington, D.C. require all drivers to demonstrate financial responsibility to legally drive. 
Purchasing car insurance is the easiest way to do this—and in almost every state, it’s mandatory. But a few states have legal loopholes that offer alternatives to buying car insurance: 
  • New Hampshire
    is the only state that doesn’t officially require all drivers to purchase car insurance—but it still sets legal requirements for drivers who choose to buy coverage. 
  • Virginia
    permits drivers to pay the Department of Motor Vehicles an annual $500 uninsured motorist fee instead of paying for car insurance. 
  • California
    drivers can substitute a cash deposit or surety bond for $35,000 for a motor vehicle insurance policy.
  • Florida
    allows drivers with a net worth of at least $40,000 to apply for a certificate of self-insurance for vehicles registered in Florida.
  • Texas
    law permits individuals to prove financial responsibility through a surety bond, cash deposit, or self-insurance certificate.
  • Mississippi
    allows drivers to post a bond or make a dash deposit equal to the required liability limits.
  • Missouri
    drivers can get around the state’s insurance requirements with a cash deposit, certificate of deposit, bond, or negotiable securities equal to $75,000.
  • South Carolina
    law permits drivers to register as uninsured motorists in exchange for a $600 annual fee.
  • Nebraska
    accepts surety bonds or certificates of deposit for $75,000 in lieu of car insurance.
In almost every case, purchasing car insurance is cheaper and simpler than trying to satisfy your state’s financial responsibility requirements without proof of insurance. Unless you have a very high net worth, you’ll save both time and money by buying a policy that meets your state’s minimum car insurance coverage limits. 

You probably need more than state minimum coverage

State minimum car insurance is
the cheapest option available
in every state—but it rarely offers enough protection for your vehicle, your family, and your finances. 
Take the most common state liability limit: 25/50/25. This provides up to $50,000 of coverage for injuries caused in a single at-fault accident and up to $25,000 for property damage. But the average hospital stay following a car accident costs $60,000 and the average car on the road today is worth around $45,000. That’s not even taking into account ongoing medical expenses, lost wages, or the pain and suffering another driver could sue you for after an accident! 
In other words, if you’re responsible for a single accident with state minimum insurance, you could face tens of thousands of dollars of out-of-pocket costs. If you’re unable to pay, you’re vulnerable to personal injury lawsuits and all of your assets will be fair game. 
On top of these serious risks, state minimum coverage doesn’t include either collision or comprehensive coverage—which means you’ll have no way to file a claim if your own vehicle is stolen, damaged in an at-fault accident, or harmed by severe weather or animals. 
The bottom line: Most drivers should opt for a
full-coverage auto insurance policy
that includes at least 100/300/50 of liability coverage, along with collision and comprehensive coverage to pay for repairs to their vehicle. 

Find cheap minimum coverage auto insurance in your state

Not sure you can afford to buy more than the minimum amount of coverage required by your state? You might be surprised. 
Approximately 50% of drivers never
compare car insurance quotes
, which means that 50% of drivers are likely to overpay for insurance without realizing it. 
To see if you can afford more than state minimum coverage, download the Jerry app. Jerry is a licensed insurance broker backed by a team of 100+ licensed insurance agents—and it’s the quickest way to compare multiple quotes from top-rated companies. Once you create a profile, you’ll see
real car insurance rates
and coverage options from
the best insurers
in your state. 


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