Do I have to have auto insurance?

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Here's what you need to know...

  • Car insurance is required in nearly every state
  • Even in New Hampshire, where it’s not required, if you’re at fault in an accident, you are liable to pay for the damages
  • Insurance will protect you financially as well as make it legal for you to drive

In most states, some type of car insurance is required in order to drive. In fact, 49 states and the District of Columbia require that a driver of a vehicle show financial responsibility of some kind, usually in the form of liability insurance.

Even though there is one state that does not require car insurance, it is still a smart idea to have insurance to cover your liability.

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Car insurance, especially liability insurance, is important to have if you drive a car. If you are in an accident, your out-of-pocket expenses will be high without it, and if there are bodily damages, you could also be sued by the other party.

Insurance helps protect your finances.

Which state does not require car insurance?

New Hampshire state sign

Although 49 of the 50 states require drivers to have a minimum amount of insurance, New Hampshire is currently the only state that does not require liability insurance or another form of financial responsibility.

Virginia is a state is a state that requires financial responsibility in one of two forms. Drivers can either purchase liability coverage or they can pay an uninsured motor vehicle fee of $500 when they register their vehicle.

What are the minimum requirements for liability insurance in the states that require car insurance?

Every state is different in regards to the minimum requirements that are needed for your vehicle.

For most states, there are minimum required amounts for liability coverage, medical payments, and uninsured motorists, although not all states require all three.

Under liability coverage, you need limits for bodily injury to one individual, bodily injury for each accident, and property damage.

Again, each state varies in their requirements, but the normal requirement is:

  • $25,000 is often the minimum needed for individual bodily injury
  • $50,000 for each accident bodily injury
  • $25,000 the minimum needed for property damage

If the state requires a minimum limit for medical payments, $1,000 for each occurrence is about average. For uninsured motorist coverage, states may require the same amounts that are required for liability coverage, but each state is different.

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If I have the minimum required limits, is it necessary to purchase higher limits?

It is not legally required to have higher limits if you are already carrying the minimum amount. However, depending on the individual, many will choose higher limits to decrease the amount for which they are liable.

Keep in mind that if you are in an accident, once your limits have been reached, you are personally responsible for the amount over and above that.

If there is a lot of property and/or bodily damage, the cost may be a lot higher than the limits you have on your policy, which means you will owe a lot out of pocket.

This is a good reason why you may consider raising the limits on your policy, so you will not owe as much, if any at all.

If I live in a state in which car insurance is not required, why should I buy it?


Although car insurance may seem expensive on a yearly or monthly basis, not having it can be way more costly in the end. Even if your state does not require you to carry insurance, it is a smart thing to purchase it anyway for the benefits it provides.

If you do not have insurance and happen to be in an accident that is your fault, you are responsible for all damage, to the vehicles involved as well as any bodily damage to everyone involved.

These expenses add up quickly and will be a lot of money that you are responsible for paying. You may even be sued for compensation, which will cost you even more money.

Also, for most uninsured drivers who are in a car accident, they will be required to purchase car insurance after the accident as well as file for an SR-22 that has to stay in place for three years.

This, plus the cost of damages, is usually much more expensive than driving without insurance for a period of time.

If you are concerned about insurance costs, there are many companies out there that can get you basic insurance for a good price, which is usually worth it.

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