When Did Car Insurance Become Mandatory?

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Alex Healey
Updated on Apr 27, 2022 · 3 min read
Car insurance
has been mandatory for most American car owners since the ‘70s, and today, 48 states and the District of Columbia require you to have it.
But when did
auto insurance
become a legal requirement in your state? And which states are still holding out?
Car insurance has been required for a long time | Twenty20

A brief history of car ownership in America

There is no denying that America was the first country to embrace the automobile. While German engineers were ahead of us with the invention of the first
model in 1901,
and General Motors caught up quickly. By 1913, the U.S. produced 485,000 of the world’s 606,124 motorized vehicles.
At the time, Americans were enjoying a higher per capita income than Europeans, and the necessity of owning a car was greater here, due to the vast distances between American towns and cities. As a result, American car ownership took off, especially after Ford’s rollout of the Model T.

Car insurance comes to America

By 1927, 15 million units of the Model T had been sold.
became the first state to mandate car insurance the same year. But according to the
Ryan Agencies
, the first place to offer
liability insurance
was actually Connecticut.
Under Connecticut law, drivers were to be held financially responsible for motor accidents resulting in injury, death, or property damage. However, while forward thinking Connecticut drivers could buy liability insurance as early as 1925, they did not have to. It was completely optional.
Massachusetts took the concept a step further, mandating all drivers to have car insurance in 1927. It remained the only state to have mandatory car insurance for almost thirty years!
The New York legislature passed a compulsory insurance law in 1956, and North Carolina followed suit in 1957. By the 1970s, 48 states had mandatory car insurance, with just New Hampshire and Virginia leaving it up to personal choice.

Car insurance today

Because it is mandatory in almost every state, almost every driver in America purchases a car insurance policy these days. But times have changed.
Liability insurance is no longer the only coverage available. There are now 13 different
types of auto insurance
, from traditional options like collision coverage, to new ones like rideshare insurance.
Every state has its own mandatory minimums when it comes to how much insurance you need. Even in Virginia and New Hampshire, where car insurance is not required, insurance alternatives exist to ensure drivers can afford to pay up if found to be at-fault for an accident.

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