Minimum Requirements for Car Insurance

Each state has different minimum car insurance requirements, although most require liability coverage for all drivers. The average minimum car insurance rates are $68.42/mo.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 20, 2021

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Here's what you need to know...

  • The average annual cost for car insurance is $821
  • There are minimum coverage requirements for each state
  • Minimum liability usually requires liability coverage
  • If you are caught driving without insurance, you can face hefty fines, a license suspension, and even jail time

When did vehicle insurance coverage become compulsory? Keep reading to learn about compulsory car insurance — including its history, as well as current laws and requirements.

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History of Car Insurance

The very first auto insurance policy was sold in Buffalo, NY to Dr. Truman J. Martin on February 1, 1898.

The purpose of the policy was to protect him and his finances in the event of an accident with the gentleman’s horse. Being that there were 18 million horses in use at the time, this was a potential necessity.

The policy was not intended to cover anyone but Dr. Truman or any other vehicle, such as automobiles. The doctor was given $5,000 of liability coverage for a grand total amount of $12.25.

Since then, the number of cars on the road has greatly increased, as have the number of accidents and injuries.

In 1927, Massachusetts lawmakers made liability insurance mandatory. This started a trend, and by the early 1950s, insurance had become a way of life for most Americans.

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What is the minimum car insurance coverage?

There are only a few states that do not require minimum liability coverage. These are New Hampshire, South Carolina, Tennessee, and Virginia.

These states don’t impose specific levels of liability insurance coverage; however, they do address the issue in their laws.

For example, Virginia and South Carolina charge uninsured drivers a fee, Tennessee demands proof of fiscal accountability, and New Hampshire demands uninsured motorist coverage.

Liability auto insurance covers third party bodily or vehicular damage, rather than the main driver or their vehicle. The most important factor when speaking of liability insurance coverage is the “liability limit.”

The liability limit is the greatest amount an insurance company will payout in the event of an accident.

The individual is held legally responsible for any damage that exceeds this amount covered by the auto policy. Many states insist on a minimum of $20,000 to $25,000; this may not be sufficient in the event of an accident.

Minimum Car Insurance by State

The requirement for minimum coverage per state — in thousands — for liability per accident/liability per person/liability for property damage is as follows:

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  • Alaska 50/100/25
  • Colorado 25/50/15
  • Idaho 20/50/15
  • Iowa 20/40/15
  • North Dakota 25/50/25
  • Alabama 20/40/10
  • Arizona 15/30/10
  • Connecticut 20/40/10
  • Hawaii 20/40/10
  • Arkansas 25/50/15
  • Florida 10/20/10
  • Illinois 20/40/15
  • California 15/30/5
  • Indiana 25/50/10
  • Kentucky 25/50/10
  • Kansas 25/50/10
  • Maine 50/100/25
  • Delaware 15/30/5
  • Georgia 15/30/10
  • Louisiana 10/20/10
  • Massachusetts 20/40/5
  • Minnesota 30/60/10
  • Maryland 20/40/10
  • Montana 25/50/10
  • Michigan 20/40/10
  • Nebraska 25/50/25
  • Mississippi 25/50/25
  • New Hampshire 25/50/25
  • Missouri 25/50/10
  • New Mexico 25/50/10
  • Nevada 15/30/10
  • New Jersey 15/30/5
  • Ohio 12.5/25/7.5
  • New York 25/50/10
  • North Carolina 30/60/25
  • Pennsylvania 15/30/5
  • Oklahoma 10/20/10
  • Rhode Island 25/50/25
  • Oregon 25/50/10
  • Tennessee 25/50/10
  • South Carolina 25/50/25
  • Texas 20/40/15; Utah 25/65/15
  • South Dakota 25/50/25
  • Washington 25/50/10
  • Wyoming 25/50/20
  • Virginia 25/50/20
  • West Virginia 20/40/10
  • Vermont 25/50/10
  • Wisconsin 25/50/10

What happens if you don’t have compulsory car insurance?


Penalties for disobeying prescribed laws vary from state to state, just as insurance requirements do.

The punishment can range anywhere from a $500 fine to months of jail time, including license suspension or vehicle impoundment.

Each state’s Department of Motor Vehicles (DMV) governs over motorists and related driving issues. States will sometimes give the first-time offending drivers a mere (but expensive) slap on the wrist, while others will suspend driving privileges.

In Delaware, anyone caught driving without minimum coverage is subject to 6 months license suspension, up to a $1,500 fine, and $3,000 for any subsequent fines.

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How to Save Money on Compulsory Car Insurance

Today, Dr. Truman J. Martin’s historical auto insurance policy would have cost $316.25 per year. However, $821 is the average annual cost of a present-day auto insurance policy.

Of course, the state you live in, the type of car insurance you need, and your personal driving factors will all impact this number.

Online auto insurance quote tools make it easier than ever to compare quotes. The data is provided in an obvious and thorough mode, which spells out how various companies compare to one another.

Enter your ZIP code and get FREE car insurance quotes from multiple companies today!

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Average Monthly Car Insurance Rates by State